Hungary to Phase Out Pandemic-era FDI Screening Rules by 2026
Ending Hungary foreign investment rules
Hungary is preparing to phase out the broad foreign direct investment screening rules introduced during the coronavirus pandemic, portfolio.hu reported.
After six years of parallel regimes, the emergency measures that captured transactions down to 350 million forints are slated to expire at the end of 2026, leaving a single, higher-threshold framework built on the 2018 national-security screening law.
The impending shift dismantles a duplicate system that forced even medium-sized corporate sales to undergo separate FDI analysis and notification procedures. Under the proposed legislation published for social consultation, the temporary pandemic regime will close, leaving the original 2018 screening rules supplemented by a much narrower notification requirement for high-value acquisitions in six designated sectors.
Two parallel FDI systems
Hungarian foreign direct investment has operated under two distinct tracks since 2020. The first framework, established in 2018 and applied from 2019, targets national-security-sensitive industries such as the defense sector, as well as certain utility, financial and telecommunications activities.
The second system was introduced in 2020 during the Covid pandemic, extending notification requirements across industry, trade and food production. Under these provisions, a transaction valued at 350 million forints involving a 10 percent stake could trigger the procedure, capturing routine corporate restructuring even when sensitive operations appeared only as secondary activities.
portfolio.hu noted that because the two systems differ in scope and procedure, even the ordinary sale of a medium-sized company could require separate FDI analysis, an authority notification and postponement of the closing.
Higher thresholds for six core sectors
The draft legislation replacing the expiring regime narrows regulatory oversight to direct majority acquisitions by investors from outside the European Union, European Economic Area, and Switzerland. To trigger a mandatory filing under the new rules, the target company must operate in one of six designated fields as its primary activity.
| Regulated Sector | Financial Thresholds (Net Revenue or Deal Value) |
|---|---|
| Crude petroleum processing and coking | 180 billion forints revenue OR 10 billion forints deal value |
| Chemical manufacturing | 180 billion forints revenue OR 10 billion forints deal value |
| Pharmaceutical manufacturing | 180 billion forints revenue OR 10 billion forints deal value |
| Basic metal manufacturing | 180 billion forints revenue OR 10 billion forints deal value |
| Fabricated metal products manufacturing | 180 billion forints revenue OR 10 billion forints deal value |
| Electricity, gas, steam, and air conditioning supply | 180 billion forints revenue OR 10 billion forints deal value |
portfolio.hu reported that meeting either the 180 billion forint net annual revenue threshold or the 10 billion forint transaction value threshold will suffice to trigger the filing requirement. Once investors receive confirmation that authorities acknowledge the notification, they may proceed to close the majority acquisition.
Future EU regulatory changes
The social consultation period for the legislative draft runs until November 12, meaning the final text could still undergo adjustments before enactment, portfolio.hu reported. Open questions remain about what exactly counts as “transaction value”, how indirect acquisitions through holding companies are treated, and which rules apply to deals signed in 2026 but closed in 2027.
Further legislative adjustments are already expected by 2028 due to upcoming European Union FDI regulatory updates, ensuring that the legal environment for cross-border mergers and acquisitions will continue to evolve.