The Hungary Golden (Guest Investor) visa program is open to American investors. US citizens can apply for the Hungarian Golden Visa by investing a minimum of €250,000 in a real estate fund or making a €1,000,000 donation to a public higher education institution.
US citizens must be careful of tax consequences arising from foreign investments. US citizens are advised to use alternative passport (other than US) when applying for Hungary Golden visa.
FATCA
Plan properly to use open a bank account with a FATCA complaint bank in Hungary
PFIC
US citizens who invest in the Hungarian real estate fund may be subject to PFIC “Passive Foreign Investment Company” rules for tax purposes in the United States.
Self directed IRA
US citizens can direct their 401k using Self directed IRA to invest in the Hungarian investment fund. The Self-Directed IRA or a Solo 401(k) plan (if you are self-employed) gives you the freedom to invest in alternative assets, including those outside the United States via US LLC.
Restrictions
Some real estate investment funds may restrict US citizens from investing due to
- Burdensome U.S. tax and financial reporting regulations
- Complex U.S. Tax Rules for Foreign Funds (PFIC)
- trigger U.S. securities registration requirements
- Increased Administrative Cost: To comply with FATCA
It is highly recommended to consult with a tax advisor who specializes in international tax law before investing to understand the possible implications