New immigration law in Hungary – Will it affect your business setup?

New immigration law in Hungary and its effects on business setup

Hungary has introduced a new immigration law that came into force on 1 January 2024. It will not affect Hungarian company setup, which will remain available to all nationalities. However, it will affect residency applications for the managing director, the employees, and their family members.

Company formation and residency

In Hungary, anyone can open a company within just 4-5 business days, regardless their nationality, on their own, without a local partner. You do not need to be a Hungarian resident to open your company, but you may become eligible for residency through company setup. This will give you visa-free entry to the European Union and the Schengen zone, while it will also greatly facilitate administrative procedures in Hungary, including bank account opening.

New residency options under the new immigration law

Under the new immigration law, some old residence permit categories are discontinued while new categories have been added. Of course, residence permits issued under the old law remain valid until expiry (they are not being revoked and there is no need to apply for a permit in one of the new categories). Residency applications submitted last year, when the old law was still in force, are being processed and issued in line with the old regulations, and will provide the same privileges as promised.

Residency for managing directors

Residency for gainful activity, which was most relevant to company formation under the old immigration law, is now replaced by a handful of categories from which company managers may choose:

  • Guest self-employed residence permit: valid for one year, may be extended for another two. Family unification available starting from the second year.
  • Hungarian Card: available only if you have “high qualifications” relevant to your business operation. Valid for three years and may be extended. Family unification is available from the start.
  • Corporate Card: available to executives and other employees to some government approved companies (details to be announced later). Valid for up to four years and may be extended. Family unification is available from the start.

Unfortunately, it is not yet clear what will be considered high qualification. Our expert team is following the developments, and we will provide updates as they become available.

Residency for employees

Until the end of 2023, there was only one “work permit” (or rather, residency for employment purposes) available to third-country nationals to be employed in Hungary. Starting from 2024, however, the category is split, and now there are several types of residence permits to choose from based on the qualifications of the employee, the term of employment, and the person of the employer. They offer different privileges, so not all of them may be extended, and family unification is not available for each either. The most important types of residency are the following:

  • Residence permit for seasonal employment
  • Residence permit issued for the purpose of implementing an investment (if you want to work at your own business or on specific investment projects)
  • Residence permit for the purpose of employment
  • Guest worker residence permit
  • Intra-Corporate Transfer (ICT)
  • Hungarian Card
  • EU Blue Card
  • Corporate Card
  • National Card: for Serbian and Ukrainian nationals

You can learn more about these options here, or if you contact us on the below link.

New residency applications

Currently, the Immigration Office is closed while they prepare the new workflows for the new types of permits. It is supposed to open again on 1 March, by which time more details about the new residency applications should become available.

Other options for international investors

With the introduction of the new immigration law, Hungary has also started a so called golden visa program that lets investors and their close family members gain residency for ten whole years in exchange for one investment in real estate bonds or residential real estate, or for one donation to a designated higher education institution. You can learn more about the program here.

Residency remains an option with company setup

If you intend to set up a company in Hungary in order to expand your business in the EU, Hungarian residency is still not a requirement, but an excellent option to compliment your access to the EU markets with visa-free travel in the EU. However, the available residency options have recently changed, so make sure to consult an expert like the Helpers Team if you are interested in residency for yourself, your employees, or your family members.

Helpers Hungary offers comprehensive assistance with business and immigration, covering various aspects such as company setup, residence permit applications, family unification, and accountancy: everything you might need if you are interested in moving your business or your family to Hungary. Let us handle the paperwork so you can concentrate on growing your business.

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