Hungary eases FDI notification requirement for “strategic companies”

Hungary has consolidated aspects of its foreign direct investment (FDI) screening framework introduced during the state of emergency declared in response to the armed conflict in Ukraine. Act XCIII of 2025 on the amendment of certain laws to reduce administrative burdens for enterprises modifies Act L of 2025 on elevating specific emergency decrees to statutory level. Within this framework, the amendment to Section 37(4) refines the scope of notifiable dealings concerning “strategic companies” and introduces an explicit exclusion for security granted for bank financing.

This amendment went into effect on 17 December 2025.

Legislative background

Hungary declared a nationwide state of emergency by Government Decree 424/2022 (X. 28.) on 1 November 2022 in response to the armed conflict and humanitarian crisis in Ukraine and to address and manage the domestic impact of this war. Since then, elements of the emergency FDI screening rules applicable to strategic sectors have been progressively maintained and integrated into legislation. The latest changes were introduced by the Act XCIII of 2025, which amended Act L of 2025 that elevated select emergency provisions into law.

When no notification is required

The two scenarios in which notification is not required includes:

• Financing security exclusion (new in the amendment to Section 37(4)): a new clarification where indispensable infrastructure, equipment or assets of a strategic company are provided as security in connection with bank financing, ministerial notification and acknowledgment are not required for those security interests.
• Group‑level carve‑out (unchanged; Section 37(5)): an existing carve-out that remains unchanged in Section 37(5) whereby the associated Chapter does not apply where a transaction occurs directly at the level of a foreign‑seated parent and only indirectly produces the outcomes otherwise covered for its subordinated affiliate that qualifies as a Hungarian strategic company. In other words, certain upstream foreign transactions that have only indirect effects at the Hungarian strategic subsidiary do not require notification.

Outside of the above, the notification framework for strategic companies continues to apply, as summarised below.

What still requires notification

Under Section 37, notification to the Minister of Economy is required in connection with the following categories of dealings concerning a strategic company:

• transfers of ownership interests in whole or in part, whether free of charge or for consideration, and including contributions in kind;
• capital increases;
• corporate transformations, mergers and demergers;
• bond issues that are convertible, exchangeable, or carry subscription rights; and
• the creation of usufruct rights over shares or quotas.

These events are treated collectively as transactions that trigger a filing obligation when they concern a strategic company.

Operational rights over critical assets

Section 37(4) provides that the transfer, granting of use or operating rights, or pledging of infrastructure, equipment or other assets indispensable to the strategic company’s activities (i.e. “operational rights”) require both notification and acknowledgment by the Minister of Economy when such rights are acquired by a foreign investor or by an entity in which a foreign investor holds majority control. As amended, this obligation does not extend to security interests granted in connection with bank financing.

Practical implications for investors and dealmakers

For cross‑border M&A, joint ventures, restructurings and financing arrangements affecting Hungarian strategic companies, the amendment provides targeted relief while maintaining a robust filing perimeter. Parties should test whether the group‑level carve‑out or the financing security exclusion applies.

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