Hungary FDI control
Hungary FDI control

The following Competition practice note provides comprehensive and up to date legal information covering:

  • Hungary FDI control
  • 1. What is the applicable legislation?
  • 2. Which government or other body (or bodies) reviews foreign investments?
  • 3. What is the scope of the foreign investment regime? Does it only apply to specific sectors or types of investors (eg foreign or non-EU / non-WTO)? Are there specific rules for certain types of investors (eg state-owned enterprises)?
  • 4. What are the triggers or thresholds for the regime to apply? What types of transactions are caught? Is there a minimum level of shareholding or a control test that applies?  Are there any other thresholds that need to be met (e.g. based on turnover or market shares)?
  • 5. Are there any exceptions that may apply?
  • 6. Is there any discretion to review transactions that do not meet any thresholds for review?
  • 7. What are the grounds for review, eg public or national security or other grounds?
  • 8. What level of discretion do the relevant authorities have to approve or reject transactions? Is there scope for any other body to intervene?
  • 9. Where a transaction is caught by the regime, is notification mandatory and must closing be suspended pending clearance?
  • More...

A conversation with Aniko Kircsi, partner, and Dora Czegledi, senior associate in the Budapest office of international law firm CMS on key issues on foreign direct investment (FDI) control in Hungary.

1. What is the applicable legislation?

The applicable legislation on the control of foreign investments in Hungary is Act LVII of 2018 on the Supervision of Foreign Investments Violating the National Security Interests of Hungary (the Act) and the relating implementation decree, Government Decree 246/2018 (XII.17) (the Governmental Decree), which came into force on 1 January 2019.

Additionally, temporary measures for foreign investments also apply in Hungary until 31 December 2020 pursuant to Act No LVIII of 2020 on the temporary measures applicable in connection with the termination of the state of emergency and on the preparedness for pandemics (Temporary Act) and the related new governmental decree (Supplementary Decree).

2. Which government or other body (or bodies) reviews foreign investments?

Investments falling within the scope of the applicable legislation are reviewed by the Minister of Interior Affairs. As part of the review procedure, the Minister of Interior Affairs will decide either (i) to approve the investment or (ii) to prohibit it.

The Constitution Protection Office (in Hungarian: Alkotmányvédelmi Hivatal) is responsible for the enforcement of the legislation and monitoring whether investors comply with the relevant provisions.

3. What is the scope of the foreign investment regime? Does

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