Operating Foreign Banks in Hungary: A Summary

Introduction

Foreign banks can operate in Hungary either through their Hungarian branch or on a cross-border basis. To ensure compliance with local regulations, foreign banks must navigate various requirements and restrictions.

Cross-Border Operations

• Foreign banks can provide financial or auxiliary financial services on a cross-border basis without the need for a domestic license.
• If a credit institution registered in another European Union or European Economic Area Member State intends to pursue activities in Hungary, it must notify its home regulator in advance.

Branch Establishment

• The notification process for establishing a branch typically lasts approximately two months.
• Hungarian law recognizes the possibility for a foreign bank to operate based on its domestic license either through its Hungarian branch or on a cross-border basis.

Restrictions on Ownership

• Foreign banks are subject to restrictions on ownership, including:
  • Transparency in business connections and ownership structure
  • Requirement that the acquirer of a qualifying holding must have a good business reputation and be capable of maintaining reliable and diligent leadership and control of the bank

Conclusion

This summary provides an overview of the key requirements for foreign banks operating in Hungary. By understanding these regulations, foreign banks can ensure compliance and successfully establish their presence in the Hungarian market.