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Attila Kisbenedek / AFP - Getty Images, file
Fireworks burst over the Danube River in Budapest on August 20, 2012 during a celebration marking Hungary's national day.
BUDAPEST - Lawmakers in indebted European Union member Hungary are waving the prospect of a passport at well-heeled foreign investors.
Proposed legislation listed on parliament's website would grant permanent residency and ultimately Hungarian citizenship to outsiders who buy at least 250,000 euros ($322,600) worth of special government bonds.
Hungarian passport holders are entitled to live and work throughout the European Union.
The move, backed by the ruling government party, is designed to attract new investors, especially from China.
Hungary has billions of euros worth of foreign currency debt maturing in the next few years and has explored a variety of ways to refinance.
Chinese investors targeted
Its plans include selling euro-denominated bonds to domestic buyers and trying to attract major new investors from Asia. Selling debt in western bond markets would happen only after tricky talks with international lenders wrap up, the government has said.
Budapest has asked for a financing backstop from the EU and the International Monetary Fund, but talks are dragging on and analysts see only a 50 percent chance of a deal.
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The proposed legislation calls for the debt management office to issue special "residency bonds" to foreigners. Holders of at least a quarter of a million euros' worth of the bonds would get preferential immigration treatment.
"The goal of the modification is to create the institution of 'investor residency' in Hungary," the lawmakers who put forth the legislation wrote in their proposal.
"The proposal ties gaining citizenship to buying bonds because it intends to aid state financing this way," they wrote. "Other investments from those applying for such residency could boost the real estate, retail and investment markets."
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One of the authors of the proposal said Chinese investors were specifically targeted.
"The Chinese have articulated repeatedly that we should help their Hungarian investments," ruling party lawmaker Mihaly Babak told the daily Nepszabadsag. "If someone is a Hungarian citizen they have more (investment) opportunities."
"The condition of a preferential process is the purchase of 250,000 euros worth of bonds with a five year maturity ... We can attract capital from the so-called Third World this way and also finance reducing state debt."
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I would seriously consider buying the requisite number of bonds. My brother would too. We are both american citizens, but he is planning on doing a lot of business in the european union, and I'd like to be able to work there. What is the yield?
probably a bit better than flushing your cash down the toilet. no guarantees though!
It's an incredibly risky proposition. If you've got $300K to throw away then have at it.
Could be cheaper to just buy a home in Hungary and transfer citizenship.
Huh??? YOu mean like transferring title to a car? Sorry, it don't work like that.
ouch
hmm
hahahahaha - I'd rather flush my $$ down the toilet in great big wadded up rolls; you'd get better payback when the system overflows.
and to live there - with all the Euro-trash and gypsies???? with no economy for the next 20 years and austerity measures?
the country would be better off with civil was and genocide practices - ahhh, memories of the 90's
Euro-Trash?????
You are just a fool, no problems in the States eh.
Obviously, you never traveled anywhere in the world, PatseChi.
PatseChe
You are so ignorant it almost physically hurts? Hungary is one of the most beautiful countries in the entire world, not just Europe, and if you haven't been there I strongly recommend going. You don't know what you are missing out...
Also, at least the Hungarians are straightforward about their offer. The same can't be said about a lot of other countries, who are much deeper in debt than Hungary. I hope you get some education about Hungary and realize your comments were not justified. The vast majority of Hungarians have absolutely nothing in common with gipsies, they are the descendants of Huns, and their only linguistic relatives are the Finnish people. Most Hungarians have blue or green eyes and are light-haired or blonde. The gipsy romantic was one of the ill-fated PR stunts of a communist regime in Hungary - now thankfully gone - to bring in tourist dollars for gipsy music and Hungarian grown paprika. Gypsies live all over Europe, even in Germany, Sweden or the UK. Good grief. Why do some people have to make comments about something they know nothing about? You probably think the capitol of Hungary is Bucarest.
Hey Dumbass PatseChi, we have Gypsies living here too. A lot of them. Obviously, you've never heard of Murphy Village, South Carolina. I think your picture is under the phrase 'Ugly American' in the dictionary...
Sounds too much like another tax-avoidance scam wealthy US millionaires will jump at. Mitt Romney probably already got one...
You're right. Anyone evacuated from a womb onto US soil should be a slave to America forever, never to be allowed to leave or decide this country doesn't represent their interests.
Why make it a bond? They should simply say that for EUR 250k, you can buy a passport. That is a better deal for the country and it is more transparent.
That approach already exists in two (soon to be three) countries in the Caribbean. It's more controversial and the US shut most of the others down a decade ago.
With an EU passport you can live and do business anywhere in the EU... you wouldn't just be stuck in Hungary.
Sounds like an idea worth investigating in the US. Now I can hardly wait for the snarky comments.
Might be news to people but plenty of governments offer the same. Both U.S. and Canada have immigration through investment.