Bill would require disclosure of acquisitions by ‘foreign’ investors

EU

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The government submitted a bill to Parliament late Tuesday that would require foreign investors from outside of the European Union, the European Economic Area (EEA) and Switzerland to disclose to the authorities certain acquisitions in Hungary.   

The bill specifies that the term "foreign" investors may also apply to companies already established in the EU, EEA or Switzerland, if they are controlled by a foreign national who is a citizen of a country outside of the EU, EEA or Switzerland, reported state news wire MTI.

Such defined foreign investors would be required to disclose to the authorities acquisitions conveying either direct or indirect control over a 25% stake in a Hungarian company.

The disclosure threshold would be 10% in the case of a public company limited by shares (Nyrt).

The bill would also require disclosure if any acquisition raises the combined stakes of foreign investors in a company over 25%.

Disclosure would also be required if a foreign investor establishes a branch in Hungary or acquires operating rights over a company.    The authority to whom foreign investors would be required to report such acquisitions would be a minister mandated by a government decree.

The billʼs authors noted that a number of other EU members have a variety of regulations and systems of oversight for investments by foreigners from outside of the EU, EEA and Switzerland.

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