ANNOUNCEMENT 11 Nov 2018

In October 2018, Hungarian Parlament approved the establishment of an investment screening regime of foreign acquisitions of local companies operating in certain sectors. The Law was issued in 11 November 2018. 

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

Government of Hungary, 2018. évi LVII. törvény a Magyarország biztonsági érdekét sértő külföldi befektetések ellenőrzéséről, issued on 11 November 2018: http://njt.hu/cgi_bin/njt_doc.cgi?docid=210606.359458
Government Office of the Capital City Budapest (Office), Magyarország biztonsági érdekét sértő külföldi befektetések ellenőrzése, Tájékoztatjuk tisztelt ügyfeleinket, hogy 2019. január 1. napján hatályba lépett a Magyarország biztonsági érdekét sértő külföldi befektetések ellenőrzéséről szóló 2018. évi LVII. törvény, illetve a végrehajtásáról szóló 246/2018. (XII.17.) Korm. rendelet, issued on 10 Janaury 2019: https://mkeh.gov.hu/news/2019/01/10/magyarorszag-biztonsagi-erdeket-serto-kulfoldi-befektetesek-ellenorzese

Inception date: 01 Jan 2019 | Removal date: open ended
Still in force

FDI: Entry and ownership rule

On 11 October 2019, the Hungarian authorities issued Law on the Control of Investments Detrimental to the Interests of Hungarian National Security thereby establishing an investment screening regime related to companies operating in sectors of national security importance. Such sectors include manufacturing of military or dual-use goods; utilities i.e. the gas, electricity and water sectors; electronic and/or public communication systems; cryptography; and financial services. 

Under the regime, governmental prior approval has to be obtained for:

  • Foreign acquisitions of 25% of the shares of companies operating in sectors important to national security (the threshold is 10% of the company's shares when being a publicly-traded) or certain influence is aquired of such companies
  • A branch office is established in Hungary which operates in such aforementioned sectors  
  • A foreign entity acquires the right to operate or utilise specified sensitive assets or infrastructure

The foreign investment screening mechanism enters into force on 1 January 2019.

AFFECTED SECTORS

 
N/A

AFFECTED PRODUCTS

 
N/A