“The most important thing right now is that the state of emergency was terminated,“ says Peter Berethalmi, Partner at Nagy es Trocsanyi in Budapest.
Berethalmi says that the legislative focus of Hungary's Parliament recently was "on dealing with all the government decrees that were passed during the state of emergency, as the government gave the Parliament back its full legislative power following the end of the state of emergency.“ It is now up to Parliament to decide which decrees should be kept in effect and which rejected.
"A long piece of legislation was adopted by the Parliament already," Berethalmi reports, implementing “almost word by word“ the May 25 Government decree restricting investments into Hungary from non-EU countries in order to “protect strategic entities deemed vulnerable to takeovers by foreign investors during a time of crisis.“ Berethalmi calls this “probably the most important thing for us as lawyers,“ and explains that the law is “not very clear, and strangely it affects some EU investments” as well."
“Still,” he says, "the government has loosened some conditions for investment, which previously warranted notifications and approval, likely to avoid being overwhelmed by applications.“ Berethalmi reports that the law “probably catches even intra-group corporate restructurings,“ and that, especially with the recent Brexit, there are cases that are “quite complicated.“
Turning to another subject, Berethalmi reports that a new Bankruptcy Code is in the works. “There is draft legislation, which the government filed just last week, so that will definitely be a change.“
Finally, speaking of the COVID-19 crisis, he says that Hungary “cannot suffer any more lockdowns.” According to him, “the governmental measures proved to be appropriate to save lives and protect the economy, which is not in a bad state at the moment,“ but he says that if another wave of the virus comes, leading to another lockdown, more serious problems could arise. “At first, people wanted more straightforward and clear incentives from the government,” he says, "but they came around and accepted that everything that was passed was adequate and timely. Small businesses expected more, but because of the lockdown being relatively short, the economy didn’t suffer that much and they were not hit badly. If another lockdown is to be, however, I’m sure that most businesses will expect more to be done than this time around.“
In the meantime, he says, “the automotive and tourism industries have been hit the most. On the other hand, retail is booming, especially via the Internet.“ Of course, the pharmaceutical sector is going strong too, he says, especially in areas that are directly related to vaccine efforts.