The end of parallel FDI regimes in Hungary: targeted filing duty replaces Second FDI Regime under First FDI Regime framework, but questions remain

What changes

(i)    One regime instead of two: If adopted, the repeal of the Second FDI Regime ends the parallel screening track under which the existing regime captures acquisitions by EU/EEA and Swiss investors, as well as third-country investors, across a broad range of sectors and at low thresholds. Going forward, all screening will be conducted exclusively under the First FDI Regime.

(ii)   Industry sectors taken over from the Second FDI Regime: Certain industry sectors currently covered by the Second FDI Regime will be moved under the First FDI Regime. This means that acquisitions in Hungarian target companies operating in one of the following six NACE divisions – coke and refined petroleum (19), chemicals (20), pharmaceuticals (21), basic metals (24), fabricated metal products (25) and electricity, gas and steam supply (35) – will also fall under the First FDI Regime if the investor comes from a state outside the EU, the EEA and Switzerland, and acquires direct majority control (within the meaning of the Civil Code) over the Hungary-seated company.

(iii)  High financial thresholds regarding the newly inserted sectors: In the above industries, the notification obligation will apply only if the target's net revenue in its last closed financial year is at least HUF 180bln (approx. EUR 500m), or the transaction value is at least HUF 10bln (approx. EUR 27m). The existing notification, procedural and sanction rules of the First FDI Regime will apply to the new filings mutatis mutandis.

Significance

For most deals the planned reform is a clear liberalisation. Once the Bill is adopted, in the industry sectors moved to the First FDI Regime, investors directly acquiring Hungarian companies or assets would no longer face a general Hungarian filing duty outside the first regime, and minority stakes and mid-sized deals would generally fall outside the new test. What remains is a concentrated scrutiny of large non-EU investments in energy, heavy industry, chemicals and pharma. At the same time, the existing scope of the first regime (security-sensitive activities) remains unchanged.

The Hungarian state's pre-emption right to acquire photovoltaic power plants in the course of an approval proceedings under the Second FDI Regime will also vanish. 

The transition gap

The bill does not contain transitional provisions for the repeal of the Second FDI Regime. Several questions therefore remain open:

• Pending notifications: If a filing submitted in 2026 has not been decided by 31 December 2026, will the procedure lapse, continue under the previous rules, or need to be terminated? The general administrative principle that pending cases are decided under the law in force at the time of the decision would suggest termination, but it remains unclear how the Ministry will proceed.
  
  
• Signing in late December 2026: An SPA signed on 19 December 2026 triggers the old filing duty, which typically runs from signing and has a 10-day deadline. With the repeal effective at year-end, it is unclear whether a filing must still be made, whether failure to file could still be sanctioned, and whether an "FDI approval" condition precedent is satisfied, waived or impossible.
  
  
• Closing after 1 January 2027: Deals signed but not closed under the previous rules may need a fresh assessment under the new rules, and potentially a new filing after 1 January 2027.
  
  
• Pending sanctions: Whether proceedings for failures to file before 2027 can continue is also unclear.

Practical takeaways

Until the bill is finalised and adopted, parties to deals spanning year-end should build flexible FDI conditions into their SPAs, with alternative wording covering both the old and new regimes and long-stop dates that account for either outcome. They should monitor the legislative process, since transitional rules may still be added. Deals involving non-EU buyers in the six identified industry sectors should already be assessed against the new thresholds to ensure that any notification obligation arising after 1 January 2027 does not come as a surprise.

Authors: Kinga Hetényi, Márk Kovács