FOREIGN DIRECT INVESTMENTS IN HUNGARY – PART IV – NOTIFICATION

dec 3, 2024

In the previous parts of this series of articles, we have described the cases in which a foreign investor, investing in Hungary, may be subject to a notification obligation under General and/or Temporary FDI screening regime. However, what should be included in such notification? Which information shall be provided, and which annexes shall be attached to the notification?

 

Smartlegal Schmidt&Partners reports from Hungary:

 

1           NOTIFICATION OBLIGATION

Under the General Regime, the acquisition of ownership or the right to operate must be notified to the Hungarian Government in Hungarian language within ten days as from the conclusion of the contract, pre-contract or agreement for the acquisition or the acquisition of the right to operate, the registration of the newly registered activity in the Company Registry shall be notified within ten days as from the registration.

In case of the Temporary Regime, similar rules shall be applied as to the General Regime.

2           THE CONTENT OF THE NOTIFICATION

2.1       In general

In the notification, the Foreign Investor must describe its past economic activity and attach documents concerning its ownership structure and the legal entities holding shares in the Foreign Investor, as well as the beneficial owner as defined in the Hungarian Anti-Money Laundering Act.

The notification shall include, among others,

  1. the Foreign Investor’s details, e.g., citizenship, address or registered seat;
  2. the contact details of the Foreign Investor’s representatives;
  3. ownership structure of the Foreign Investor;
  4. approximate volume of the planned FDI etc.

2.2       Attachments

The notification must be accompanied by the documents relating to the transaction, e.g.: contract, pre-contract, documents relating to the registration of the newly registered activity etc.

The original or a certified copy of all documents shall be attached and, unless otherwise provided by law, a certified Hungarian translation of non-Hungarian documents.

The content of the notification is illustrated in the following figure:

The article was written by dr. Péter Korózs.

SMARTLEGAL is a team of agile business & litigation lawyers in Budapest, Hungary, helping international corporate clients and individual entrepreneurs doing business in Hungary. For more information please visit our website at Smartlegal.hu