UPDATE - Hungarian Foreign Investment restrictions extended to 30 June 2021

UPDATE - Hungarian Foreign Investment restrictions extended to 30 June 2021

As we reported in May new foreign investment restrictions (“New Hungarian FDI Regulation”) were introduced by a Government Decree during the Covid 19 state of emergency (in addition to the already existing FDI rules on sectors closely related to national security). We also reported at the end of June that the Parliament has refined and slightly modified those rules in an Act and e.g. it exempted indirect transactions from mandatory FDI screening. Now the Parliament has made only two minor but undoubtedly significant changes to the New Hungarian FDI Regulation.

What is the substance of the New Hungarian FDI Regulation?


Under the New Hungarian FDI Regulation a notification and the acknowledgement of the Minister of Innovation and Technology is required as a precondition to implementing foreign investment into Hungarian companies operating in a large number of sectors.

What are the new rules?


The first modification is that the duration of the new Hungarian FDI Regulation is extended until 30 June 2021, which means that transactions signed until that date are subject to FDI screening and to the acknowledgement of the competent Minister.

The other amendment to the existing regulation is investor friendly, as it provides that the New Hungarian FDI Regulation shall not apply if the transaction happens between affiliates (e.g. intra-group restructurings).

These modifications are effective as of 30 October 2020.

Continuing uncertainty


Unfortunately the Parliament has not made any clarification to the other existing uncertainties relating to the New Hungarian FDI Regulation (like what happens if the Minister remains silent or the interpretation of the criteria for refusal), so it seems that these will live on together with the regulation.

Where can I find a detailed summary on the New Hungarian FDI Regulation?


Please check out our previous newsletters on this topic to get the full picture of the New Hungarian FDI Regulation:

The original rules

The refinements of June

Who to contact?


If your business may be affected by the New Hungarian FDI Regulation, please do not hesitate to contact any member of our team:

Péter Lakatos
Péter Köves
Iván Sólyom
Richard Lock
Pál Rahóty

To download this newsletter, please click here.

We at Lakatos, Köves & Partners will be producing Updates to our COVID19 Newsletters as the situation develops. If you would like to receive those Updates please write to us at subscribe@lakatoskoves.hu and we will send you Updates as they are issued.

More news

All news

Related lawyers