In Hungary, adherence to regulatory requirements is pivotal for the operations of domestic legal entities or businesses. Recently, there have been discussions regarding the significance of possessing a domestic bank account as mandated by Hungarian law, and the implications for companies failing to meet these criteria.
According to the prevailing legal framework, a company registered in Hungary must maintain a domestic bank account in line with the specifications outlined by the law. Failure to comply with this regulation may result in a judicial supervisory proceeding carried out by the competent court of registration.
It is crucial to note that simply having a foreign bank account does not meet the above requirement (i.e., having a foreign bank account does not exempt a company from failing to meet the prescribed obligation of maintaining a domestic (Hungarian) bank account).
Moreover, instances where domestic financial institutions deny opening a bank account for a company can pose significant challenges. Despite such refusals, the competent court of registration cannot intervene or alter the practices of these financial institutions. This underscores the importance of proactive measures by businesses to ensure compliance and address issues related to domestic financial accounts.
In essence, while the regulations surrounding domestic bank accounts for companies registered in Hungary might seem stringent, they are designed to uphold financial transparency and regulatory compliance. It's imperative for companies to be aware of and adhere to these legal requirements to avoid potential legal repercussions and maintain a seamless operational status.
By Akos Mates-Lanyi, Head of Transactions and M&A, Noerr
