M&A Lawyers Hungary 2026: FDI Screening, Notification Thresholds and Merger-control Timelines

Hungary’s foreign-direct-investment screening regime has undergone its most significant overhaul in years, creating urgent compliance questions for every cross-border deal touching Hungarian targets. Act L of 2025 made the formerly temporary Special FDI Regime permanent, while Act XCIII of 2025 refined notification thresholds, clarified the state pre-emption right and adjusted review timelines. For general counsel, PE sponsors and M&A lawyers Hungary is now a jurisdiction where deal certainty depends on mastering two parallel regulatory tracks, FDI notification and merger-control clearance, and sequencing them correctly. This guide provides the step-by-step decision framework, practical timelines and SPA drafting triggers that in-deal teams need in 2026.

Executive Summary, At a Glance

Hungary’s reworked FDI screening rules demand attention at the earliest stage of any inbound acquisition. The regime, anchored in Act L of 2025 and amended by Act XCIII of 2025, imposes mandatory foreign investment notification obligations on transactions that meet nationality, sectoral and value-based tests. Failure to notify within the statutory deadline can result in fines, structural remedies and, in the most sensitive sectors, the exercise of a state pre-emption right that allows the government to step in as buyer.

Key points every deal team should know:

• Thresholds. Foreign investors acquiring ownership or voting rights in designated strategic-sector companies above statutory HUF value thresholds must notify the Minister responsible for FDI screening before closing.
• Timelines. The notification must be filed within ten days of the conclusion of the legal transaction; statutory review windows then run from the date of complete filing, with extensions possible in complex cases.
• State pre-emption. In specified sectors, the Hungarian state holds a right of first refusal that it may exercise within defined statutory deadlines after notification.

Separately, the Hungarian Competition Authority (GVH) retains its own merger-control regime with distinct turnover-based thresholds and a pre-closing clearance requirement. Many cross-border acquisitions trigger both regimes simultaneously, making coordination essential. Consult an experienced Hungary M&A adviser through the Global Law Experts lawyer directory to assess your deal’s exposure before signing.

Why Hungary’s FDI Regime Changed, Act L of 2025 and Act XCIII of 2025

Hungary first introduced emergency FDI screening measures during the COVID-19 pandemic to prevent opportunistic acquisitions of strategically important companies at distressed valuations. Those temporary measures, extended multiple times, were eventually replaced by a permanent legislative framework. Act L of 2025 codified FDI screening Hungary obligations on a standing basis, removing the sunset clause that had required periodic renewal. Later in 2025, Act XCIII of 2025 amended the new permanent regime to address implementation gaps, refine the sectoral scope and introduce clearer procedural rules for the state pre-emption right.

Legislative Timeline

What Changed, Permanentisation Versus Emergency

The shift from temporary emergency measures to a permanent statutory framework has several practical consequences. Deal teams can no longer rely on expiry dates to argue that the regime will lapse before closing. The permanent regime also broadened certain sectoral definitions and introduced more granular threshold tests. Industry observers expect the permanentisation to encourage a more structured enforcement approach by the competent Ministry, replacing the ad hoc reviews that characterised the emergency phase. For M&A lawyers Hungary’s FDI landscape is now a standing feature of every cross-border acquisition checklist.

Which Transactions Trigger FDI Notification?, Decision Framework

The FDI screening regime does not apply to every foreign investment in Hungary. Whether a specific transaction triggers a foreign investment notification obligation depends on a sequential test that evaluates the investor, the target and the nature of the transaction. Practitioners should work through the following decision steps before signing any share-purchase or asset-purchase agreement.

Step-by-Step Decision Test

1. Investor nationality or control chain. Is the direct or ultimate acquirer a non-Hungarian entity, or is the acquirer a Hungarian entity controlled by non-Hungarian persons? If yes, proceed to Step 2.
2. Target activity. Does the Hungarian target company operate in a designated strategic sector as defined in the Act and implementing decrees? If yes, proceed to Step 3.
3. Transaction type. Does the transaction involve the acquisition of shares, voting rights, business units or assets, a merger, or the grant of a concession or operating right in the target? If yes, proceed to Step 4.
4. Threshold test. Does the acquisition meet or exceed the applicable statutory HUF value threshold and/or result in the acquirer reaching defined ownership or voting-rights percentages? If yes, the transaction is notifiable.

If the answer to any step is “no,” the transaction falls outside the FDI notification regime, though it may still require GVH merger-control clearance if turnover thresholds are met.

Covered Sectors, Key Examples

The legislation designates a broad range of strategic sectors. While the full list is set out in Act L of 2025 and its implementing decrees, the most frequently encountered sectors in cross-border M&A include:

• Defence and dual-use. Companies manufacturing or distributing arms, military equipment or dual-use goods.
• Critical infrastructure. Energy generation and distribution, water supply, telecommunications networks and data-centre operators.
• Financial services. Banks, insurers and payment-service providers where the acquisition crosses defined ownership thresholds.
• Health and pharmaceuticals. Manufacturers of certain essential medicines and medical devices.
• Technology and data. Companies handling critical personal data sets or operating in cybersecurity.
• Agriculture and food supply. Certain large-scale food processing and agricultural enterprises.

Exceptional Cases and Exemptions

Act XCIII of 2025 introduced targeted exemptions for specific transaction types. Intra-group restructurings where no change in ultimate beneficial ownership occurs may be exempt from the notification requirement, provided the restructuring can be documented to the satisfaction of the competent authority. Similarly, certain de minimis acquisitions falling below the lowest statutory thresholds are excluded. Deal teams should not assume an exemption applies without confirming against the current text of the legislation and any ministerial guidance in force.

M&A Lawyers Hungary, Thresholds, Covered Sectors and the State Pre-Emption Right

The notification thresholds combine an ownership-percentage test with HUF value-based tests. The specific thresholds vary depending on the type of entity being acquired and the sector in which it operates. The table below provides a structural overview; practitioners should verify exact figures against the current text of Act L of 2025 as amended by Act XCIII of 2025 on the Nemzeti Jogszabálytár portal.

Threshold Overview Table

State Pre-Emption, Right of First Refusal

One of the most consequential features of Hungary’s FDI regime is the state pre-emption right. In designated sectors, when a notifiable transaction is filed, the competent Minister may refer the transaction for a pre-emption assessment. If the state elects to exercise its right of first refusal, it steps into the position of the buyer on substantially the same commercial terms as the notified transaction.

The mechanics operate as follows:

• Trigger. The state pre-emption right is activated by the filing of the FDI notification itself. The competent authority assesses whether the target falls within a sector where pre-emption is available.
• Decision window. The state must decide whether to exercise its right within a defined statutory period following notification. If no decision is communicated within the deadline, the right lapses and the transaction may proceed (subject to any other conditions).
• Commercial terms. The state acquires on the terms agreed between the parties in the notified transaction. Sellers receive the agreed purchase price; the buyer is displaced.
• Valuation disputes. Where the parties dispute whether the agreed price reflects fair value, the legislation provides for valuation mechanisms, though the practical application of these provisions remains untested in most sectors.

The likely practical effect of the pre-emption right is that deal teams must factor in the possibility of state intervention when structuring pricing, conditionality and break-fee mechanisms. Sellers in particular should be aware that signing with a foreign buyer does not guarantee closing if the target operates in a pre-emption-eligible sector.

Review Timelines, Statutory Versus Practical for M&A Lawyers Hungary

Timing is one of the most critical variables in any Hungarian cross-border deal subject to FDI screening. The statutory framework establishes mandatory filing deadlines, review windows and extension mechanisms that directly affect deal execution calendars.

Sample Timeline

Expedited Options and Practical Suspensions

The legislation does not formally provide for an “expedited track,” but industry observers note that straightforward transactions in non-sensitive sectors tend to receive faster clearance in practice. Pre-filing engagement with the competent Ministry, including informal consultations and submission of draft filing materials, can reduce the effective review period by addressing information gaps before the formal clock starts. Conversely, cases involving defence-sector targets or potential state pre-emption can take significantly longer than the statutory minimums suggest, particularly where inter-ministerial coordination is required.

Coordination with Merger-Control Timelines

Where a transaction also triggers GVH merger-control obligations, the two review tracks run in parallel unless the parties choose to sequence them. Since GVH merger-control clearance is a pre-closing requirement (the transaction cannot be consummated without it), while FDI notification is a post-signing obligation (filed within ten days of signing), the practical sequencing often sees the FDI filing submitted first with the GVH filing following shortly after, or simultaneously. Deal teams should build both timelines into their closing calendar and ensure that SPA longstop dates accommodate the longer of the two review windows.

Merger-Control Filing Rules in Hungary and Overlap with FDI Screening

The GVH operates Hungary’s merger-control regime independently of the FDI screening framework. Transactions that result in a change of control and meet the GVH’s turnover-based thresholds require pre-merger notification and clearance. The two regimes serve different policy objectives, merger control Hungary focuses on market competition, while FDI screening targets national-security and strategic-sector concerns, but they frequently apply to the same transaction.

Comparison: FDI Notification Versus Merger Control

Practical Coordination, Data Rooms, Conditionality and SPA Drafting

When both filings are required, deal teams should prepare a unified information package that can serve both the Ministry and the GVH, while tailoring submissions to each authority’s specific requirements. Coordination points include:

• Data-room management. Ensure that competition-sensitive data shared with the GVH is ring-fenced appropriately, while strategic-sector information required by the Ministry is presented with national-security framing.
• SPA conditionality. The SPA should include separate conditions precedent for FDI clearance and GVH merger-control clearance, with distinct longstop dates if the review timelines are expected to differ materially.
• Parallel filing strategy. Filing both notifications as close to simultaneously as practicable reduces the risk of one approval expiring before the other is granted.

Penalties for Non-Notification, Remedies and Retrospective Filing

The consequences of failing to comply with Hungary’s FDI notification regime are severe and can undermine the commercial rationale of an acquisition. Act L of 2025, as amended by Act XCIII of 2025, empowers the competent authority to impose a range of penalties for non-notification or for consummating a transaction before receiving clearance.

Penalty Framework

• Fines. Monetary penalties may be imposed on both the acquirer and, in certain cases, the target company. The amount is calculated with reference to the transaction value and the degree of non-compliance.
• Nullification. Transactions completed without the required notification may be declared null and void, requiring the parties to unwind the acquisition.
• Structural remedies. The authority may impose conditions such as mandatory divestment of the acquired stake or operational restrictions on the target.
• State pre-emption (retrospective). In the most serious cases involving pre-emption-eligible sectors, the state may exercise its right of first refusal retrospectively, displacing the buyer even after closing.

Enforcement Authorities and Typical Outcomes

Enforcement sits with the competent Minister, supported by sector-specific advisory bodies. Early indications suggest that the authorities are taking a pragmatic approach to inadvertent non-compliance where investors file retrospectively and cooperate fully, particularly in sectors where the state pre-emption right is not engaged. However, deliberate evasion or failure to file in sensitive sectors is expected to attract the full range of penalties. Retrospective notification, filing after the ten-day deadline has passed, is possible but does not guarantee favourable treatment. Deal teams that discover a missed filing obligation should seek immediate legal advice and file without delay to mitigate enforcement risk.

Deal Execution Playbook, SPA Drafting and Negotiation Checklist for M&A Lawyers Hungary

The interaction between FDI screening, merger control and commercial deal mechanics demands careful SPA drafting. The checklist below captures the key action items for counsel on both sides of a Hungarian cross-border transaction.

Pre-Signing Due Diligence Triggers

• Sector mapping. Confirm whether the target’s activities fall within any designated strategic sector under Act L of 2025 and its implementing decrees.
• Investor chain analysis. Trace the acquirer’s ultimate beneficial ownership to determine whether the nationality/control-chain test is met.
• Threshold assessment. Calculate whether the transaction value and post-acquisition ownership percentage meet or exceed the statutory thresholds.
• Dual-filing analysis. Assess whether GVH merger-control thresholds are also met, and if so, prepare a parallel filing strategy.

SPA Clause Templates

The following sample clause concepts illustrate how practitioners are addressing FDI risk in Hungarian SPAs. These are structural concepts only, final language must be adapted to each transaction.

Condition precedent, FDI clearance:

“Completion shall be conditional upon the Buyer having received unconditional clearance (or deemed clearance through expiry of the statutory review period without a decision) from the competent Minister under Act L of 2025 (as amended) in respect of the Transaction, and the state pre-emption right not having been exercised within the statutory deadline.”

Longstop date with FDI extension:

“The Longstop Date shall be [date], provided that if FDI clearance has not been obtained by such date solely due to the competent Minister having extended the review period, the Longstop Date shall be automatically extended by a period equal to the statutory extension, up to a maximum of [number] days.”

Break fee, pre-emption trigger:

“If the Transaction is not completed solely because the Hungarian state has exercised its pre-emption right under Act L of 2025, the Seller shall pay to the Buyer a break fee of [amount/percentage] as the Buyer’s sole remedy in respect of such non-completion.”

Interim Covenants and Escrow

• Interim operating covenants. Between signing and closing, the SPA should restrict the target from undertaking material actions (asset disposals, new indebtedness, key-employee changes) that could affect the FDI or merger-control assessment.
• Escrow for penalty risk. Where there is uncertainty about whether a retrospective filing may attract penalties, parties may agree to escrow a portion of the purchase price pending final clearance confirmation.
• Termination rights. Both parties should have the right to terminate if clearance is not obtained by the longstop date, with clear allocation of costs and break-fee mechanics.

Practical Annexes, Checklists, Timelines and Filing Resources

Effective compliance with Hungary’s FDI and merger-control regimes requires disciplined use of checklists and calendars throughout the deal lifecycle. The resources below are designed to support in-deal teams from pre-signing assessment through post-closing confirmation.

• FDI notification checklist. A step-by-step checklist covering investor identification, sector classification, threshold calculation, filing preparation and deadline tracking. This checklist will be published as a standalone downloadable resource on the FDI notification checklist Hungary 2026 page.
• Sample deal timeline. A calendar template mapping Day 0 (signing) through final clearance, incorporating both FDI and GVH milestones, extension scenarios and longstop-date triggers. This timeline will be published as a standalone downloadable resource on the sample timeline and calendar page.
• Filing form guidance. A redacted example of the information fields required for a complete FDI notification, including investor identification, target description, transaction structure summary and supporting documentation requirements.

For tailored guidance on any aspect of Hungary’s FDI or merger-control regime, connect with an experienced M&A adviser through the Global Law Experts lawyer directory.

Sources

1. Nemzeti Jogszabálytár, Hungarian Legislation Portal
2. Hungarian Competition Authority (GVH), Merger Control Guidance
3. CMS Hungary, Hungary Eases FDI Notification Requirement for Strategic Companies
4. Lexology, Changes to the FDI Notification Regime
5. DLA Piper, Recent Updates on FDI Screening in Hungary
6. CEE Legal Matters, Considerations for Investors Regarding FDI Notification in Hungary
7. RSM Hungary, Sale of a Hungarian Company to a Foreign Investor
8. Eversheds Sutherland, Notification Requirements for Foreign Direct Investment (FDI)
9. Horizons Alliance, Comparative Guide: Merger Control and FDI