The Treaty of Rome of 1957 establishing the European Economic Community (hereinafter: Treaty of Rome) was designed to provide for the free movement of workers inside the Community, that is to ensure the right of free entry and residence in the territory of another Member State and to gradually abolish discrimination based on nationality between workers of the Member States with regard to employment, remuneration and other working conditions. Similarly to the other Member States of the Union, Hungary complied with its obligations undertaken in the Accession Treaty and provides the same treatment to citizens of the Member States of the European Union and the EEA countries as to its own citizens.
Pursuant to the Article of the Treaty of Rome on the right of residence, Hungary abolished all restrictions related to the residence of Community enterprises and citizens, thus according to the principle of national treatment Hungary provides the same conditions for residence and operation to natural persons from other Member States and the agencies, branches or subsidiaries founded by those persons.
Residence of Foreigners in Hungary for Economic Purposes
In Hungary the investments of foreigners and residence for economic purposes enjoy full protection and security. In Hungary, foreign citizens may freely found businesses and other associations and public-benefit organisations whose purpose is an activity aiming at or resulting in the acquisition of income and profit. In Hungary, an enterprise registered abroad may establish a branch office or commercial representation through company registration or found an independent enterprise or subsidiary.
Certain economic activities specified by law may be performed without a branch office or the foundation of an independent enterprise, such as:
- educational activities in educational and training institutions or higher education institutions;
- performing arts;
- activities requiring expertise (with the exception of auditing, accounting and bookkeeping services and legal services);
- business activities if they may be performed in Hungary without the presence of the foreign person and his/her permanent equipment;
According to the freedom of services the foreign persons may supply cross-border services in Hungary without establishment in Hungary for an economic purpose, within the limits of EU law and international agreements.
Residence and Employment of Foreigners in Hungary
As in EU law, domestic immigration rules classify foreign citizens into two groups: EEA nationals with the right of free movement and residence and third-country nationals.
The entry and residence of EEA nationals enjoying the right to free movement and residence
EEA nationals may enter the territory of Hungary and stay there for a period not exceeding three months with a personal identification document or a valid travel document.
An EEA national has the right of residence for a period longer than three months if he/she:
- is residing in the country for the purpose of gainful employment;
- has the necessary financial resources to keep himself/herself and his/her family members during the period of residence and certifies that he/she has insurance or ensures cover for the use of health-care services;
- arrives for the purpose of following a course of study and satisfies the conditions in the previous point.
The EEA national is required to register in person with the relevant regional immigration authority according to his/her future domicile within 93 days of the time of entry and provide his/her personal data. The applicant must certify compliance with the conditions of residence by presenting the necessary documents to the immigration authority. The immigration authority may only exempt the applicant from being present in person on the basis of his/her health condition. The EEA national receives a registration certificate (card) certifying registration and the date of registration.
An EEA national who has resided legally and continuously within the territory of Hungary for five years receives permanent residence status. Such status is certified by a permanent residence card issued by the relevant regional directorate of the Office of Immigration and Nationality according to the domicile of the EEA national. Under certain conditions an EEA national engaging in gainful employment is entitled to permanent residence before the end of the five-year residence period (e.g. upon reaching the age of the old-age pension or in the case of incapacity to work due to accident or illness).
Third-country nationals
Third country nationals may enter the territory of Hungary for the purpose of residence for a period not exceeding three months with a personal identification document or a valid travel document according to the conditions set out in the Schengen Borders Code . Compliance with the conditions of entry and residence must be certified at the time of crossing the border. A third-country national holding a valid residence visa or national visa is authorised to remain in the territory of Hungary after the period of residence authorised in the visa expires with a residence permit.
The most common purposes of residence exceeding three months are: studies, research, official purposes, visits, medical treatment, humanitarian purposes. A residence permit for the purpose of gainful employment issued by the Hungarian immigration authority is necessary for the employment of a third-country national in Hungary.
In addition to personal identification documents, the following documents, among others, must be attached to the application for the residence permit:
- a work permit issued by the competent labour authority;
- the work contract;
- a document certifying accommodation in Hungary;
- certification of the qualifications required for the job etc.
The period of validity of the residence permit for the purpose of gainful employment is a maximum of three years and it may be extended for another three years. In the case of activities requiring a work permit, the period of validity of the residence permit corresponds to the period of validity of the work permit.