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61 New Articles

EU businesses are free to cross borders and relocate their headquarters to another Member State. The amended EU directive and the corresponding new Hungarian rules aim to help companies doing so. In order to make it easier for companies to establish themselves in another Member State and to make cross-border operations more attractive, especially for small and medium-sized enterprises, the European Union decided back in 2019 to amend the EU directive on cross-border mergers, divisions and mergers.

The amendments to the execution government decree of the Land Registry Act entered into force on 1 May 2022, which introduced a new definition of parking space. A parking space is an area serving for the placement of a motor vehicle created in the motor vehicle storage room of a building, one side of which is connected to the access road to the parking spaces and the other three sides of which are delimited by a permanent physical marking or wall on the floor of the room. The definition also specifies the size of the parking space. This is important, since as a result, a parking space in a car storage room of a condominium may be registered as an independent property in the land registry. This only requires a proof of existence of a car storage room in the building.

As legal professionals and human beings with empathy, we keep reflecting on recent developments in Ukraine. Our heart goes out to our fellow people, and we trust that history will show us again: an imagined order cannot be sustained by violence. “You can do many things with bayonets, but it is rather uncomfortable to sit on them,” Charles Maurice de Talleyrand-Perigord insightfully pointed out. I’d like to believe that violent actions in Ukraine will come to an end or will have already ended by the time of the publication of this issue. Will, however, the impact of this war simultaneously also come to an end? As a result, how will the legal practice in CEE evolve and what developments should we expect?

On June 30, 2022, CEE Legal Matters hosted the fifth edition of the CEELM Budapest Law Firm Bowling Challenge: A competition of four-person teams from leading law firms in Hungary, with all proceeds going to the previous winner’s charity of choice. A total of 13 law firms competed for the trophy – and the bragging rights that go along with it.

On 31 May 2022 the EU’s securities markets regulator, the European Securities and Markets Authority (ESMA), published its supervisory briefing to ensure convergence in the supervision of investment funds with sustainability features, and in combating greenwashing by investment funds.

The Budapest Chamber of Commerce (“BCC”) in May 2022 proposed the change of the system of the itemised tax of small businesses (“KATA”). The main goals of the change are to keep the advantages of the system, but also to prevent and eliminate unlawful tax avoidance.

In 2019, two EU directives were adopted which must be transposed into Hungarian labour law within a short deadline. In order to comply with EU Directive 2019/1152 on transparent and predictable working conditions and EU Directive 2019/1158 on work-life balance for parents and carers, the modifications of the Labour Code should be adopted by the beginning of August 2022. According to the current information, no substantive work has been started by the Hungarian legislator to modify the Labour Code in order to ensure the compliance with the provisions of the EU Directives.

At the end of April 2022, the Commission proposed the digitalization of the Schengen visa process, replacing the visa sticker, and introducing the ability to submit visa applications online through a visa platform. This way, applying for a Schengen visa will become easier and the visa itself will be more secure and less vulnerable to theft and fraud.

The Hungarian Trade Union Confederation (Magyar Szakszervezeti Szövetség, “MASZSZ”) put together in a ten-point manifesto its long-standing demands accumulated over the past few years. The president of the Confederation announced the manifesto on 27 April 2022. As soon as possible after the formation of the new Hungarian government, the Confederation sends its manifesto to all decision-makers and the leaders of the parliamentary parties.

In 2021, the green financial markets substantially increased according to the Green Finance Report of the Central Bank of Hungary (MNB). Credit institutions launched green lending, and four banks are taking advantage of the MNB's green capital requirement discount for housing. Among green financing products, the green bonds are very popular both at public and corporate level, and green lending has also been launched on the corporate side. In the investment segment, ESG products are already available, but only to a limited extent.

At the initiative of the Ministry of Justice, the Hungarian National Bank and the Hungarian Bar Association, the Government adopted a Government Decree in April 2022 regulating in detail the payment of lawyers' deposits at financial institutions in the event of liquidation and winding-up proceedings. The Government Decree provides that in the event of the winding-up and liquidation of a financial institution, the provisions of the Bankruptcy Act, the Company Registration Act, the Act on Credit Institutions and Financial Undertakings and the Investment Firm Act shall apply with the additions and derogations included in the Government Decree.

In its recommendation issued at the end of March 2022, the European Commission urges Member States to immediately end their investor citizenship schemes and ensure strict controls to address the security, money laundering, tax evasion and corruption risks of investor residence programs.

The Hungarian tax authority published its annual tax audit guidelines with the clear aim of supporting compliant taxpayers and take firm actions against intentional tax evasion by utilizing various data sources available in the process. E-commerce, real estate industry, data-based risk analysis remain key elements.

From 1 April 2022, substantial changes were made to the provisions of the government decree on the construction and construction-related profession exercising activities, i.e. designers, construction technical supervisors, responsible technical leaders and construction experts.

The Hungarian Government adopted a decree on 24 February 2022 that allows people fleeing the Russian-Ukraine war to enter Hungary and guarantees ‘temporary protection’ for them. This temporary protection applies to all Ukrainian citizens and refugees who lived in Ukraine and their relatives. The temporary protection, at this stage, is available for one year. In order to get the temporary protected status, after entering Hungary, people must register at the Immigration Authority or at one of its sub-offices at the reception centres located near the Ukraine border. With the temporary protected status Ukrainian citizens are entitled to get accommodation, food, medical care, also dental treatment, maternity care, vaccinations and education for children. They are also entitled for monthly cash allowance for the duration of their protection. The monthly amount of the allowance is HUF 22,800 (approx. EUR 62).

The Hungarian register of ultimate beneficial owners contains the data of the data providers falling under the scope of the act ruling the register of ultimate beneficial owners, for instance limited liability companies, public limited companies, associations, foundations or notary offices.

KCG Partners at a Glance

KCG Partners is a Hungarian business law firm providing a comprehensive range of legal services to international and local clients seeking local knowledge and global perspective. The firm comprises business-minded lawyers with sector-specific expertise, creating value for clients by applying a problem-solving approach and delivering innovative solutions.

The firm has a wealth of knowledge in corporate law, M&A, projects and construction, energy, real estate, tax, employment, litigation, privacy and forensics, securitization, estate planning and capital markets.

To address clients’ regional and international concerns, the firm maintains active working relationships with other outstanding independent law firms in Central and Eastern Europe, whilst senior counsel Mr. Blaise Pásztory brings over 40 years’ of US capital market and fund management experience.

KCG Partners Law Firm is the result of the teamwork of passionate and talented lawyers guided by the same principles and sharing the same values: 

  • Our most valuable asset is our people. They are the engine of our business and the key to our success.
  • We push boundaries by looking for innovative solutions that can empower our clients to achieve greater results.
  • We place our experience, commitment and professionalism to your service.
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Firm's website: http://www.kcgpartners.com