Hungary to end sales of residency bonds

History

The Hungarian government plans to stop selling residency bonds, Cabinet Chief János Lázár said today, according to reports, as the program is no longer needed since the countryʼs upgrades by rating agencies. Radical nationalist party Jobbik made its support for a proposed constitutional amendment by Fidesz conditional on the cessation of sales of the bonds.

Jobbik leader Gábor Vona said a few days ago that his party would only vote in favor of Fidesz-initiated changes to Hungary’s Fundamental Law (Constitution) - setting down in law rejection of the EU’s planned refugee settlement quotas despite the failed referendum on October 2 - if residency bonds were to be abolished in Hungary. Vona argued in Parliament that if the Hungarian government is closing its borders to “poor migrants,” it should not let “rich migrants” enter the country either.

The government needs additional support in Parliament to achieve the two-thirds vote it requires to change the constitution, press reports note.

The Hungarian government has been selling residency bonds for non-EU citizens, granting them a “permanent residence card in one step,” as well as the buyer’s “dependent children” and “dependent parents,” with no Hungarian address requirement, according to the programʼs website residency-bond.eu, which offers information for those interested in investing in the program.

“Hungarian Residency Bond Program is getting popular: number of residence permits issued increases constantly. While only 430 bonds were sold by the end of 2013, more than 2,210 bonds were sold by the end of 2014,” the website says. The vast majority of those purchasing the bonds so far have been Chinese citizens, online news portal index.hu noted.

Lázár said today that the residency bonds are no longer needed as the country has been upgraded by investment rating agencies. He said the government began re-evaluating the program half a year ago, insisting that the government’s decision to abolish the bonds is unrelated to the Jobbik ultimatum, index.hu reported.

Index.hu recalled that the system of residency bonds, which was established and launched by Antal Rogán, head of the Prime Ministerʼs Cabinet Office, has received widespread criticism for the involvement of offshore companies and opaque constructions, with numerous questions over who ultimately benefits from the bond sales - charges which the governing party Fidesz has rejected.

Lázár said the investment type would be phased out of the country by 2021 if sales of the bonds halt by the end of this year, though already sold bonds will be left intact, index.hu reported.

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