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Hungarian residency bonds sold well in China

A real boom started on the residency bonds market after the Hungarian government stated its intention to stop the program in the future.

According to the right-wing daily newspaper Magyar Nemzet the Chinese agencies can hardly manage the huge amount of new applications. Statistics for November and December are going to show this development. Scandals about the residency bonds business might have given a good reason for the government to end selling the bonds but the interest of foreigners in buying the bonds also went down before the latest boom. During the first ten months of this year 675 bonds were sold which is a 33 per cent drop in the sales compared to the same period in 2014.

Information has appeared on a Russian-language website that claims the deadline for applying for Hungarian residency bonds is December 27, 2016. The information, which comes before any formal decision has been made to end the program, appears on immigrantinvest.com, where services are offered to assist investors in applying for the program.
All signs indicate that Hungary's controversial settlement bond program will be discontinued at the end of this year. Prime Minister Viktor Orbán reportedly discussed ending the program, whereby foreigners can acquire the right to reside within Hungary and move freely about the EU, with Fidesz party elites as early as September. Recently, Jobbik chairman Gábor Vona conditioned his party's support of a Fidesz proposal to amend the constitution on the Orbán government putting an end to the scheme. Orbán called Vona's demand "blackmail" but vowed to eliminate the program anyway.
However, no formal decision has been made concerning precisely when the program might be eliminated. The specific date appearing on the Russian website suggests offshore brokers peddling the bonds may already have information about when the program will end, reports 24.hu.
Interestingly, if the December 27 date proves to be accurate, it will be precisely 4 years after the program was launched in 2012.
The program provides residency permits to foreign citizens purchasing some EUR 300,000 worth of bonds issued by certain designated brokerage companies, which, in turn, purchase the residency bonds from the Hungarian treasury. For their efforts the mostly offshore companies charge successful applicants around EUR 60,000 apiece. In addition to their "fees" the brokerage firms pocket the interest paid by the treasury after the bonds.
To date some 4,000 bonds totaling EUR 1.1 billion have been sold, according to the Government Debt Management Center (ÁAK), enabling its brokers to collect over EUR 200 million in fees for doing little more than ferrying paperwork and documents between applicants and Hungarian authorities. Because bond holders may obtain residency permits for immediate family members as well, the total number of permits issued to date exceeds 18,000, according to the Ministry of the Interior.
The Socialist Party will resubmit its bill seeking to eliminate the government's residency bond scheme, group leader Bertalan Tóth said. Under the bill, a special, 70% tax would be levied on companies selling residency bonds to foreigners, Tóth said, adding that the companies concerned have so far collected nearly 100 billion forints (EUR 323 million). Those funds should go to the central budget rather than to cronies, attorneys or cafe circles associated with ruling Fidesz, he said. On another subject, he said the Socialists did not support Jobbik's constitutional amendment proposal, and added that the Socialists had worked out a proposal of their own to ensure security of the Hungarian people.
Zsolt Molnár, head of Parliament's national security committee, urged that the EU should build a common secret services system, and argued that Schengen visas were issued without sufficient coordination between member states, Interpol and the FBI. He also proposed that an independent border control directorate should be established, complete with logistics facilities and refugee services. He insisted that EU member states could not provide individual solutions to border protection nor could they fight terrorism on their own. Tóth added that neither the October 2 referendum nor a constitutional amendment are suitable for managing the migrant crisis.
Hungary's largest opposition party,far-right Jobbik, will propose an amendment to the constitution, the Fundamental Law, identical in every way to the amendment that failed to pass last week but which would constitutionally forbid the sale of residency bonds.
Jobbik was the first party to propose the Fundamental Law be amended in response to waves of migrants arriving to Hungary in the spring of 2015. At that time the Fidesz-controlled parliament refused to take up the issue, only for Fidesz chairman, Prime Minister Viktor Orbán to propose his own migration-related amendment in the wake of the October 2 failed referendum.
Jobbik reacted by conditioning its support of the proposed amendment on the elimination of the residency bond program, which critics say has diverted hundreds of millions of euros from the Hungarian treasury to offshore companies, even as it has enabled thousands of non-EU citizens to settle in Hungary without being properly vetted by Hungarian authorities for possible terrorist ties.
Fidesz responded to Jobbik's demands by saying it would not respond to "political blackmail," and that it had planned to end the program next year anyway, prompting Jobbik to deny Fidesz the three parliamentary votes needed for the amendment to pass.
Now Jobbik has taken Fidesz's proposal and will submit it to parliament verbatim, with the addition of a single sentence making it unconstitutional for the government to engage in the practice of selling residency bonds. It remains to be seen how many Fidesz MPs will vote for the proposal.

Source: MTI, budapestbeacon.com

Last Updated on Friday, 18 November 2016 04:51

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