As of 24 June 2025, Hungary amended FDI rules, broadening state pre-emption right and adding longer review periods.
Broadened Scope of State Pre-Emption
The new legislation expanded the Hungarian state’s pre-emption right to cover all sectors governed by the FDI Decree, not just the energy industry. Whereas the right previously applied primarily to electricity producers, particularly solar power companies, it now extends to any strategic business segment. Per existing rules, the term “strategic” is used in a very broad manner, and covers a wide range of activities, including wholesale and retail in general, certain manufacturing activities, IT and hospitality services, to mention a few. If the Minister of National Economy prohibits a transaction, the state may acquire the target company on the same terms offered by the foreign buyer. This right must be exercised within 90 days following a prohibition decision.
Significantly Extended Review Periods
The revised regime also introduces considerably longer review timelines. The Minister of National Economy now has 45 business days (previously 30) for initial review. This period may be extended up to three times, each by an additional 30 business days.
These changes provide the authorities with increased flexibility but also introduce greater unpredictability for transaction timelines.
Key Implications for Investors
The new framework creates several legal and commercial challenges for foreign investors. Sensitive deal terms disclosed during review could be leveraged by the state. As an unwanted outcome for parties, prohibited transactions may still result in state acquisition on pre-agreed terms. Extended screening may delay closings, disrupt financing, and complicate integration strategies.
These factors highlight the need for early-stage risk assessment and tailored structuring in cross-border M&A transactions.
Immediate Applicability and Future Outlook
The amendments apply with immediate effect to both newly submitted and pending FDI filings. No transitional provisions or grandfathering rules apply. The current regime is scheduled to remain in force through 31 December 2026.
The revised framework strengthens the state’s oversight of acquisitions by foreign entities, underscoring the importance of regulatory strategy in deal planning.