Temporarily tightens FDI screening

26 May 2020

On 26 May 2020, Governmental Decree no. 227/2020 entered into force in Hungary. It introduced a temporary foreign investment screening mechanism applicable to investors from both inside and outside the European Union and will be effective until 31 December 2020. Prior governmental approval is needed in 21 industries, including health care, pharmaceutical, medical device manufacturing, but also some non-medical industries. Approval will be denied, if an investment violates or threatens public security or order, in particular security of supply of basic social needs.

Hungary established its main FDI screening regime in 2018 (effective 1 January 2019) and the new temporary mechanism will operate in parallel as a response to economic challenges posed by the COVID-19 pandemic.

  • Type:
    • Entry and establishment (Approval and admission)
  • Industry:
    • Primary (Agriculture, forestry and fishing, Mining and quarrying)
    • Manufacturing (Manufacture of food products, beverages and tobacco products, Manufacture of coke and refined petroleum products, Manufacture of chemicals and chemical products, Manufacture of basic pharmaceutical products and pharmaceutical preparations, Manufacture of basic metals, Manufacture of fabricated metal products, except machinery and equipment, Manufacture of computer, electronic and optical products, and electrical equipment, Manufacture of machinery and equipment n.e.c., Manufacture of transport equipment)
    • Services (Electricity, gas, steam and air conditioning supply, Water supply, sewerage, waste management and remediation activities, Construction, Wholesale and retail trade, Accommodation and food service activities, Telecommunications, Financial and insurance activities, Public administration and defence; compulsory social security, Human health activities)
  • Sources: