Hungary introduces national security review of foreign investments
11 Oct 2018
On 11 October 2018, the Law on the Control of Investments Detrimental to the Interests of Hungarian National Security has been published in the official Hungarian gazette. It introduces a national security-related screening mechanism for national security. Prior ministerial approval is required, when:
1) 25% of the shares (10% in publicly traded companies) are acquired in companies important to the national security;
2) decisive influence over such companies is acquired;
3) a branch office is established in Hungary, or
4) a right to use/operate a sensitive infrastructure or asset is acquired.
Companies, whose activities are important to the national security, include those active in arms and dual-use object manufacturing, cryptography, utilities (gas, water, electricity), financial sector, electronic communication and public communication systems.
The FDI review is obligatory not only for all investors from outside the EU, Switzerland or EEA member states, but also for those companies, whose major shareholders or shareholders exercising decisive influence are from outside the EU, the EEA or Switzerland.
The law will enter into force on 1 January 2019.
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Type:
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Entry and establishment (Approval and admission)
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Industry:
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Manufacturing (Manufacture of machinery and equipment n.e.c., Other manufacturing)
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Services (Electricity, gas, steam and air conditioning supply, Water supply, sewerage, waste management and remediation activities, Telecommunications, Financial and insurance activities, Other professional, scientific and technical activities, Public administration and defence; compulsory social security)
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