Hungary has a complex FDI screening system, consisting of two parallel and independently
functioning regimes, as summarized in the chart below. Transactions caught under either
regime require the acknowledgement of the relevant authority as a precondition of
The first regime, the so called „General FDI Regime”, was introduced on 1 January 2019 to
basically implement EU Regulation no. 2019/452. It has a relatively narrow scope regarding the
sectors covered (defense, national security, public utility services, certain financial services, IT
security, telecommunications and insurance). The declared aim of the FDI review is to protect
Hungary’s security interests.
The second effective FDI regime is the “Special FDI Regime” originally adopted because of the
Covid-19 pandemic. It currently applies with slightly amended rules under Ukraine war related
emergency regime (the amendments are currently applicable until 25 November 2023). It covers a wide scope of sectors and activities. The declared aim of the FDI review is to
protect Hungary’s sovereign interest in (a) the security and functionality of networks and systems
not governed by sectoral legislation, (b) supply security related public interest and (c) public interest
relating to fundamental economic interests from a national economy perspective.
FDI screening rules are very complicated (below is a simplified summary only), and screening
under both regimes is non-transparent. There is no public register on FDI filings and decisions, and
there are no published statistics.
The Special FDI Regime leaves some room for maneuver in transaction structuring to avoid FDI
screening. Based on our practice, most transactions pass the review. Increased scrutiny is
expected if natural resources are concerned by a transaction, and where the energy sector or
national security linked activities are concerned. Veto decisions known to us concerned an
acquisition where the target owned a mineral water spring, and the acquisition of Aegon insurance
business by Vienna Insurance Group. The legality of the Hungarian FDI regimes has been
challenged by the European Commission and by market players (Xella, pending before the CJEU).
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