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Controversial Residency Bonds Good Springboard for Chinese, Russians, Middle-Easterners

Ábrahám Vass 2019.01.18.

Economic investigative site G7 reported that 81% of those granted residency through the Hungarian government’s controversial residency bond scheme were Chinese, according to data requested from the Immigration and Asylum Office (BMH) by corruption watchdog Transparency International.

In total, 6,543 people—along with their 13,300 family members—coming from 59 countries were granted residency through the scheme. Among them, 81% were Chinese (15 754), followed by Russians (1265), Iranians (305), Pakistani (241) Iraqi (222), etc.

G7 also notes that only 64 applicants (0,3%) were rejected in contrast to the 6,4% rejection rate seen in normal residency procedures.

The scheme was initiated by Cabinet Minister Antal Rogán in 2013 but was suspended in 2017 amid great controversy. According to critics, contrary to the Fidesz-led government’s rigorous attitude towards migration and immigrants, it has quietly offered residence permits to wealthy foreigners who were willing to pay a deposit of approximately €300,000. This amount, however, was later returned to the new Hungarian resident.

No New Hungarian Residency Bonds to be Issued From April 2017

Critics also note the “superficial” background checks applicants underwent, meaning there may have been some who posed potential security risks. While the government insists that applicants underwent a four-step background check, according to the Director of TI, Miklós Ligeti, “the sale of residency bonds is one of the greatest security threats the Hungarian government poses for the country.”

Critics often cite the example of a Russian citizen sentenced for fraud that was able to bypass Hungarian authorities and obtain residency thanks to a pure Certificate of Good Conduct issued in St. Kitts and Nevis.

Transparency vs Govt On Residency Bond Loss

In addition, while the companies (four out of five having had offshore background with an unknown owner) who were in charge of the sales and management of the applications have booked profits totaling €494 million, the scheme generated an approx. €2.800 loss per bond for the Hungarian government and its taxpayers.

Controversial Residency Bond Scheme Generated Loss for Hungarian State, New Investigation Shows