New Immigration Law Could Pose Challenges for Business Leaders

Analysis

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Many domestic companies are facing the problem that their foreign colleagues in leading or senior positions are treated in the same way as guest workers under the new immigration law, because they lack a documented qualification, which could put them at several legal disadvantages. According to an expert from BLS-CEE Law Firm, companies employing foreign workers need to find tailor-made legal solutions to the new challenges created by the amendment.

The new immigration law published in December 2023 has changed the immigration regulations in Hungary fundamentally. The new legislation came into force on January 1, which means that those, who are affected have to adapt faster than expected. In addition to the changes, all procedures related to residence permits have been suspended between January and February 2024, creating additional administrative hurdles and issues for foreigners, the law firm notes.

According to Réka Dancsa-Nábráczky, a specialist at BLS-CEE Law Office assisting several large companies in the region in relocating their employees, the new legislation may bring challenges for those who wish to take up a higher position typically not held by guest workers, without a specific higher or professional qualification. Under the previous legislation, regardless of the qualification level, it was possible to apply for a residence permit for work purposes (in Hungarian: “munkavállalási célú tartózkodási engedély”) for management positions if the applicant otherwise had the knowledge and experience required for the position.

One of the most significant changes in the new law is that it distinguishes between the employment of individuals with and without tertiary qualifications for senior positions, categorizing the latter in the same group as guest workers. As a result of the new law, many workers who meet the job market requirements for a given high-level position, based on their skills, knowledge, and practical experience, will be treated in the same way as guest workers without a "paper" (e.g. diploma, degree, certificate) certifying higher education. This has several disadvantages: they cannot hold certain positions, they are not entitled to apply for a permanent residence permit, their family members are not entitled to apply for a family reunification permit, which is a simpler procedure (i.e. the joint relocation of the family is in doubt).

They are also only allowed to hold a permit for a maximum of 3 years (as opposed to a maximum of 3 years for a professionally qualified person, which can be extended for a further 3 years), and the number of permits that can be issued each year is limited. Such cases can be dealt with through specific legal solutions, according to the BLS-CEE expert: legal advisers have to find the most favorable type of residence permit by taking into account several aspects (immigration, labor law, taxation) at the same time, in addition to guiding the company through the complex process of applying for a permit.

Based on the law firm's experience, it is of utmost importance for large companies to ensure that the relocation of high-level employees to Hungary remains smooth, despite legislative changes and procedural novelties. The change in legislation will also place a significant burden on applicants and the National Directorate General of Immigration (OIF) and is expected to lead to major changes in the way procedures have been conducted in the past.

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