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Everything You Need to Know About Hungarian Golden Visa Real Estate Funds · IMI Podcasts

• 0:00
  SPEAKER_00: This episode first appeared as an article titled Everything You Need to Know About Hungarian Golden Visa Real Estate Funds and authored by Tsaba Magyar on IMIDaily.com.
• 0:11
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• 0:28
  SPEAKER_00: IMI Pro Saba Magyar provides an in-depth overview, including the requirements of how real estate fund investments work for Hungary's new guest investor program, which allows third country citizens to obtain residency in Hungary if they invest at least 250,000 euros in a Hungarian real estate investment fund registered with the Central Bank of Hungary.
• 0:52
  SPEAKER_00: Hungarian real estate investment funds are a type of alternative investment fund, or AIF, with legal personality but no independent operations or decision-making capacity.
• 1:04
  SPEAKER_00: For this reason, they must be represented by a licensed fund manager.
• 1:08
  SPEAKER_00: Real estate funds can be established for a fixed or indefinite term.
• 1:12
  SPEAKER_00: They can be open-ended, allowing continuous investment and redemption, or closed-ended with no redemptions during the term.
• 1:20
  SPEAKER_00: They can be public funds offered to anyone or private funds for a predetermined group.
• 1:25
  SPEAKER_00: The fund's assets must consist of at least 40% Hungarian residential real estate, with the rest allowed in other real estate, real estate company shares, property rights, securities, derivatives, and necessary movables.
• 1:40
  SPEAKER_00: At least 15% must be in liquid assets like cash and government bonds.
• 1:46
  SPEAKER_00: The fund manager is responsible for investing the fund's capital per its management policy.
• 1:52
  SPEAKER_00: Managers must be licensed by the Central Bank of Hungary and have minimum capital of€300,000 plus potential increases based on assets under management over 250 million euros.
• 2:06
  SPEAKER_00: An independent custodian, usually a bank, must safeguard the fund's assets, manage accounts, and supervise the manager.
• 2:14
  SPEAKER_00: Investors' ownership is represented by investment certificates, which are transferable securities with details like the fund type, term, nominal value, rights, and issue date.
• 2:25
  SPEAKER_00: They can be printed or dematerialized and are produced through licensed printing houses with ISIN security codes from Kieler, Hungary's central securities depository.
• 2:36
  SPEAKER_00: Investment certificates give investors a claim on the fund's assets proportional to their units, as well as rights to information, but typically no voting rights.
• 2:47
  SPEAKER_00: Newly issued units have a 180-day minimum redemption period.
• 2:52
  SPEAKER_00: Advantages of investing in a real estate fund include professional management of acquisitions, financing, operations and sales by the fund manager based on appraisals.
• 3:03
  SPEAKER_00: Risks include liquidity challenges in redemptions, profitability of rental operations, and valuation difficulties.
• 3:11
  SPEAKER_00: The central bank prioritizes transparency by requiring investment service providers to report customer balances and securities monthly for online verification.
• 3:22
  SPEAKER_00: The Investor Protection Fund ensures accounts up to€100,000 per investor against provider insolvency.
• 3:30
  SPEAKER_00: While funds are not taxed, investors pay 15% withholding tax on yields from the fund classified as dividends, as well as interest income from selling units, unless tax treaties apply lower rates.
• 3:44
  SPEAKER_00: So, in summary, the program allows residency through a minimum investment of€250,000 in regulated Hungarian real estate funds operated by licensed managers and custodians, with investment certificates representing proportional investor ownership and rights in residential and other real estate assets within Hungary.
• 4:06
  SPEAKER_00: Thanks for joining us today on IMI Podcasts.
• 4:10
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• 4:16
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