Hungarian Courts Crack Down on Businesses Without Domestic Bank Accounts

Operating a business in Hungary comes with strict legal requirements, and failing to meet regulatory compliances can result in severe consequences. One such requirement is having a domestically based bank account for companies registered in Hungary. In this article, we speak with Akos Mates-Lanyi, Head of Transactions and M&A at Noerr, about the importance of this regulation.

The Significance of Legal Compliance

Maintaining legal compliance is crucial for any business operating in Hungary. Failure to meet requirements can lead to judicial supervisory proceedings, which can interrupt operations and result in fines or other penalties. Among these regulations, having a domestic bank account is a non-negotiable requirement for companies registered in Hungary.

The Requirement of a Hungarian Bank Account

According to Hungarian law, a company must keep a domestic bank account, meaning a foreign account is not an acceptable substitute. The legal consequences for not complying with this regulation can be severe, including potential proceedings by the competent court of registration.

Challenges of Opening a Domestic Account

Opening a domestic bank account for a company in Hungary may not always be a straightforward process. Foreign financial institutions may decline the opportunity to open a bank account, leaving businesses to find alternative solutions. The competent courts cannot intervene in these practices, leaving it to companies to find other banking solutions.

The Importance of Adhering to Regulations

Mates-Lanyi, from Noerr, emphasizes the importance of adhering to these regulations, “These regulations serve to uphold financial transparency and regulatory compliance within Hungary’s business landscape. The importance of implementing proactive measures to maintain a domestic financial account for a company cannot be overstated.”

Consequences of Non-compliance

The potential repercussions of non-compliance range from legal action to operational disruptions. To avoid these issues, businesses should familiarize themselves with Hungary’s banking regulations and plan accordingly.

In Conclusion

Maintaining a domestic bank account for a business in Hungary is essential. The benefits of a local banking presence far outweigh the challenges, providing operational stability and financial transparency. Be aware of the legal requirements and proactively ensure your business meets them to avoid potential legal issues.