An overview of life in Latvia vs. Hungary: living costs, healthcare, education, cities, and language.
Latvia and Hungary offer similar benefits to their citizens and residents. Both are EU countries with a robust standard of living, and both countries offer a route for obtaining a residency through an investment program, which eventually provides a pathway to EU citizenship if the requirements are met.
Latvia is in Northeastern Europe, while Hungary is in Central Europe; hence, their cultures differ. The countries’ day-to-day living experiences and social infrastructures also vary.
For investors considering relocating, now or in the future, to either country, the finer details matter. In this piece, we take a closer look at some of the most important factors to consider.
How Living Costs Vary Between Latvia and Hungary
The living costs in Latvia and Hungary are relatively low compared to other European countries. Latvia’s official currency is the Euro (EUR), while Hungary’s is the Hungarian Forint (HUF), so considering the currency fluctuation is essential for investors.
Both countries offer an affordable cost of living, giving investors the opportunity to get greater value for their money, especially retirees who rely on their pensions as their primary source of income.
Latvia vs. Hungary: Healthcare System Index Score
Latvia has a healthcare system index score of 62.64%, while Hungary’s score is 54.01%. Although Latvia has a higher healthcare index score, the quality of both healthcare systems is similar.
Hungary’s lower healthcare index score results from higher average waiting times for non-emergency procedures.
This is not surprising considering that Hungary’s population is over five times more than that of Latvia.
Private healthcare is readily available in both countries and private health insurance, while more costly than public coverage, is still highly affordable.
Both countries offer solid healthcare systems, and healthcare is unsurprisingly better in bigger cities with better-equipped hospitals.
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Is Education System Advanced in Latvia or Hungary?
Latvia operates a 12-year general education system comprising a free and compulsory 9-year basic education and three years of upper secondary education.
Tertiary education in Latvia costs €5,000 per year for citizens and €17,000 for international students (non-EU). In some cases, Latvian citizens or resident students can qualify for public financial support.
Hungary provides free and compulsory basic education to its citizens aged 3-16. Students can then complete their upper secondary education in a regular, vocational, or technical school.
Tertiary education in Hungary costs €4,000 annually for citizens and permanent residents in public institutions.
The Hungarian Government started a scholarship scheme in 2013 – the Stipendium Hungaricum Programme – to attract international students to its tertiary institutions.
The program offers tuition-free university education to qualifying students from five continents. The students will also receive free medical insurance, monthly stipends, and accommodation support.
Latvia’s tertiary education costs €5,000/year for citizens, while Hungary offers it for €4,000/year. Hungary’s Stipendium Hungaricum Programme provides tuition-free education and support for international students.
What is the Spoken Language in Latvia and Hungary?
Latvian is Latvia’s official language, while Hungary’s is Hungarian. However, most of the younger generation of Latvians and Hungarians speak English fluently, thanks to the influences of the travel and entertainment industries. About 37% of Latvians also speak Russian.
Both countries have a hub of internationalized expats and locals, meaning that integrating into the community now is much easier than it was a decade ago.
However, it’s essential for those who want to eventually qualify for naturalization to learn the native language.
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How Much Tax Will You Pay in Hungary vs. Latvia?
Latvia charges 20% personal income tax (IT) on annual earnings less than €20,004, 23% on incomes between 20,004 and €78,100, and 31% on incomes above €78,100. The standard VAT rate is 21%, but there are reductions for specific goods.
Corporate income tax is 20%. No taxes on wealth, capital duties, inheritance, or financial transactions exist.
Hungary charges a flat rate PIT of 15% and 9% corporate income tax (one of the lowest in the OECD). The standard VAT rate is 27%. Real estate transfers, financial transactions, and estates are also taxed based on the value, location, and more variables.
Overall, taxes in Latvia are slightly lower than the EU average, but Hungary’s friendly tax regime has been a major attraction for investors and corporations alike.
In general, tax rates in Latvia are marginally below the EU average, whereas Hungary’s favorable tax system has significantly appealed to both investors and businesses.
Cities in Latvia vs. Hungary
Both countries have several beautiful cities expats can settle in. However, Hungary has more because it’s larger than Latvia.
Popular destinations for expats in Latvia are Riga, Liepaja, Daugavpils, Jurmala, Rezekne, Valmiera, Sigulda, Kudilga, and Ventpils. Jelgarva and Ceisis are perfect destinations for those who want to stay away from the bustle of city life yet be close to Riga.
Budapest is Hungary’s most popular and populated city. However, there are over 50 other cities in Hungary where you can settle. The popular ones include Debrecen, Miskolc, Szeged, Pecs, Gyor, Keskerment, Nyiregyhaza, Serkesferheva, Veszprem, and Sopron.
Which Country has a Strong Economy Latvia or Hungary?
Latvia’s economy has shown resilience in recent years with stable growth rates. The country’s GDP has been on a positive trajectory, with estimates showing a consistent increase from $41.17 billion to $57.46 billion over a span of years.
The growth rates have been moderate, with an annual percentage change in GDP at constant prices showing a steady performance. Latvia’s general government gross debt as a percentage of GDP has been on a decline, indicating a strengthening fiscal position.
The inflation rate has seen fluctuations but is projected to stabilize, and the unemployment rate has been gradually decreasing. Latvia’s economy benefits from a diversified industrial sector, including agriculture, which contributes 4.1% to the GDP, and industry, which contributes 19.9%.
The services sector is the largest, making up 63.7% of the GDP. The country’s strategic geographical location and membership in the EU have facilitated robust trade relationships, especially within the European market.
Hungary’s economy has also demonstrated solid growth and a favorable business environment. The country has a highly educated and skilled labor force, which has attracted significant foreign direct investment (FDI).
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Hungary’s strategic location in Central Europe, membership in key international organizations like the EU and OECD, and competitive corporate tax rates have made it an attractive destination for multinational companies.
The government’s efforts to modernize industries and boost economic growth have resulted in a cumulative FDI stock exceeding $104 billion, focused on sectors like automotive, IT, and electronics.
Hungary’s GDP growth has been robust in recent years, although it faced challenges from the COVID-19 pandemic and geopolitical tensions. The services sector is a significant contributor to the GDP, and the country has seen a marked increase in the ICT sector’s contribution to the economy. Despite facing challenges like labor shortages and a reliance on Russian energy imports, Hungary’s economy is expected to continue growing, driven by domestic demand and increasing net exports.
Both Latvia and Hungary present promising opportunities for business and investment, supported by their strategic locations, skilled workforces, and favorable economic policies. However, they also face challenges that require careful navigation, such as labor market dynamics and external economic pressures.
Latvia exhibits steady growth and a diversified economy, while Hungary attracts substantial foreign investment with its strong growth and favorable policies.
The Residency Cost of Latvia and Hungary
Both Latvia and Hungary have simplified routes to obtaining residency through their Golden Visa and Guest Investor Visa, respectively.
The Latvian Golden Visa program offers several investment routes for obtaining residency, starting with a minimum investment of €50,000 in a Latvian company, plus a €10,000 donation and additional fees.
This Golden Visa program provides a five-year residency permit, renewable every five years, with the possibility of applying for permanent residency after five years and citizenship after ten years of residence.
The program is popular for its affordability and offers visa-free travel within the Schengen area. Family members, including spouses and children under 18, can be included in the application, and there are no minimum stay requirements to maintain residency.
Hungary recently announced its new Guest Investor Visa, which allows investors to obtain a renewable 10-year residency permit through investing €250,000 in real estate development funds or €500,000 in property.
Both programs are simplified residency by investment programs that provide a straightforward route to relocation to Latvia or Hungary, making the transition process smooth and quick.
To know more about relocation to Latvia or Hungary, contact us today to book a comprehensive consultation with one of our experts.
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Choosing between Hungary & Latvia
As you plan your next migration investment, consider looking into Hungary and Latvia as solid options that will lead you to obtaining residencies and eventually citizenship. However, it is important to consider various life aspects such as education, tax systems, and lifestyle in each country to make an informed decision based on the best interests of you and your family.
Finally
Need more guidance on how to choose the best residency program for you? While both countries offer more than one type of residency program, the differences might be very subtle. Learn more about different programs and what each type offers before you make your decision. Contact us today for a comprehensive consultation with our experts.
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