The new law that controls foreign investments in certain sectors will come into force on 1 January 2019 in Hungary. Pursuant to this regulation prior approval from the relevant minister will be required for the acquisition of foreign ownership (including acquisition of operating rights of infrastructure and establishment of a domestic branch ) in Hungarian companies active in sectors considered sensitive to national security.
In addition to the information communicated earlier in our previous Newsflash, further detailed rules have become available on 17 December 2018 in a governmental decree that has been published under no 246/2018 (XII.17) in Magyar Közlöny, the official gazette of the Hungarian Government:
- Nomination of the Minister of Defence as the Minister in charge of conducting the filing procedure and the approval process;
- Definitions of exact activities of sensitive industries deemed to be effected by the Act became specified;
- Details of the approval submission procedure (e.g. deadlines, scope of company data to be submitted, documentation to be provided) are defined. The legal transaction concerning the acquisition of property must be reported in Hungarian language within 10 days of the acquisition.
- Official communication with foreign investors is the responsibility of the Minister in charge;
- Data reporting obligations of the foreign investor are specified in relation to the submission process;
- Procedure requirements of the justification for refusal are defined;
- Detailed rules of the government’s control mechanism and relevant penalties in case of non-compliance with the Act are specified.