Hungary grants permits to Residency Bond sellers – Cayman Islands not offshore
From Portfolio.hu
Hungary’s Residency Bond is becoming available in an increasing number of countries, local daily Magyar Nemzet reported over the weekend. Up to data three businesses have been granted permit to provide the related services for applicants, one in the Cayman Islands, one in Cyprus and one in Malta. The company registered on the Cayman Islands asks 40,000 euros per applicant as “immigration consulting fee”.
The Economic and IT Committee of Hungary’s Parliament has so far granted permit to sell the Residency Bond and provide related services to three businesses. The Government Debt Management Agency (ÁKK) may sign a contract with a single company per country. Those given the green-light are the following: Hungary State Special Debt Fund registered in the Cayman Islands; Discus Holdings Ltd. established in Malta and Cyprus-based Innozone Holdings Ltd., which will deal with residency applications filed from China, Vietnam, South Africa, Indonesia, Kenya, Nigeria, Cyprus and India.
The Residency Bond Program allows third country nationals (non-European Union citizens) to acquire Hungary’s residency permit through investing in Residency Bonds with a minimum 5-year maturity issued by the ÁKK. Investors who are granted residency permit can apply for permanent residency permit (and ultimately citizenship) and their applications will be subject to preferential treatment.
Under this programme, Residency Bonds must be purchased through intermediate enterprises approved by the Hungarian Government. The minimum initial investment by each subscriber is 250,000 euros. The shares will be 100% redeemable (i.e., the entire investment amount) when the 5-year lock-up period ends.
Antal Rogán, head of the parliamentary committee said the company registered in the Cayman Islands, a well-known tax haven, is not an offshore firm because its owners are known. He reiterated that the main owners are Simon Mu, head of China’s Wanhua, Attila Boros, Lian Wang and Jonathan Chan.
The website of the Fund is already up and running, showing that a EUR 40,000 immigration advisory service fee is also payable by the applicants. The rejected applicants will be refunded the entire amount of this fee, while the fee becomes non-refundable for those with approved residency applications.
The intermediator also wins by buying the Residency Bond at a discount price from the debt manager (for around EUR 221,000 at current yields), whereas the applicants will pay EUR 250,000 for the company. This means the total profit on a single investor is around EUR 70,000, cc. HUF 20 million.
Hungary residency bond to be sold by Cayman Islands-registered company
Rogán said they had let the businesses decide what margin they will apply, noting that there are expenses related to attorneys, marketing and other issues. He added that there is a huge competition between counties, with Hungary being head to head with Bulgaria, Greece, Spain, Canada and Portugal. Rogán said the Hungarian programme is especially attractive because owing a real estate in the country is not a condition of residency.
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