Hungary has significantly strengthened its foreign direct investment (“FDI”) screening framework through extended review periods and broader state acquisition powers by adopting Gov. Decree 163/2025. (VI. 23.) (“Gov. Decree”). These changes, which took effect on 24 June 2025, apply to both new and ongoing transactions under review. However, the latest legislation seems to erase the restrictions from 19 August 2025.

I. Enhanced Review Timeline and Information Gathering

The Hungarian government has substantially expanded the timeframe available to the Minister for National Economy for reviewing FDI transactions. The initial review period has been extended from 30 to 45 business days from the date of submission. 

More significantly, the Minister for National Economy may now request up to three separate extensions of 30 business days each, providing authorities with up to 135 business days to complete their assessment when additional information is required.

II. Comprehensive State Pre-emption Authority

Another major amendment is the introduction of universal pre-emption rights for the Hungarian state. In case the Minister for National Economy blocks any transaction under the new FDI regime, the state automatically gains the right to complete the transaction itself within 90 days of the blocking decision.

The state may exercise this right directly, through the Hungarian National Asset Management Inc., or delegate the acquisition to other third-party entities. This mechanism effectively allows Hungary to acquire strategic assets that it deems unsuitable for foreign ownership.

III. Strategic Implications for M&A Activity

Unlike previous updates, these amendments also apply to ongoing FDI clearance processes that were already underway when the changes took effect on 24 June 2025. This retroactive application means that parties with pending FDI applications must recalculate their transaction timelines and prepare for potentially extended review periods.

These developments underscore the increasing importance of carefully structuring transactions involving Hungarian targets as the risk of losing investment opportunities after committing due diligence and structuring costs may significantly increase.

Notwithstanding, all the above may change soon. A recently passed bill repeals the Gov. Decree with all its constraining provisions as of 19 August 2025. We are not aware of any new provisions addressing the same subject matter, leading to seem that the restrictions have been adopted only temporarily. However, we cannot exclude that a completely new FDI may be introduced by that date. Only one thing is certain: the current situation brings ambiguity to Hungarian transactions. 

If you need more information or further guidance in this area, please contact Gabor Kutai and Kinga Kálmán.

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