Residency bond business: profit in offshore hands

As we reported, the residency bond program was organized by shady offshore companies all having strong connections with Head of Cabinet to the Prime Minister, Antal Rogán. In addition, according to Magyar Nemzet, their 165 billion HUF (approx. 0.5 billion EUR) gain exceeded expectations. However, profit landed in offshore hands mostly, on the bank accounts of a firm founded on the Cayman Islands.

Profit landed in offshore hands close to cabinet minister

As we wrote before, approximately 20,000 people received a national permanent residence permit based on data of the Immigration and Asylum Office (IAO). They had to register state bonds worth of 300 thousand EUR and pay further 45-60 thousand EUR service charge. However, the Hungarian state guaranteed a 29 thousand EUR yield to all investors after 5 years.

Thus, opposition parties strongly criticized the bond program before. To their mind, it gave a perfect opportunity for even potential terrorists to come to Hungary and gain free movement within Schengen if they pay the required money. In addition, the program was organized by

offshore companies all having strong connections to Head of Cabinet of the Prime Minister, Antal Rogán.

With one exception, all of these companies are in tax havens. Their altogether profit was 155 billion HUF (approx. 0.5 billion EUR) in the program. Additionally, the lawyer’s office of Kristóf Kosik gained 10 billion HUF because they took permanent residency permits for 5,000 EUR each. This is not surprising since he has strong connections to minister Rogán and Hungarian media mogul Árpád Habony. Thus,

residency bond business produced a 165 billion HUF (approx. 0.5 billion EUR) profit to some Fidesz-close interest groups.

Offshore companies everywhere

In fact, 78% of the foreigners came through Hungary State Special Debt Fund, a company founded in the Cayman Islands. This is because Parliament’s Committee on Economics gave only this firm permission to sell bonds to Chinese customers. Of course, members of the government parties have a majority in this committee.

However, the company gave over its permission to Hungary State Special Debt Management, a company registered in Hongkong. Nobody knows the answer to the why question. But we know that the owners of the company are three offshore firms registered on the British Virgin Islands.