A Hungarian company that fails to update its constitutional documents before the applicable deadline risks having its corporate resolutions challenged and its registrations suspended. Hungary's legislative authorities have introduced a series of amendments to the country's corporate legislation, with effect from early 2025. The changes touch core governance structures that international businesses operating through Hungarian entities cannot afford to overlook.
Hungary's reformed corporate legislation introduces revised requirements for company registration, the content of articles of association, and the composition and duties of the board of directors. The amendments apply to all commercial entities registered in Hungary, with a compliance deadline falling within the 2025 calendar year for existing companies. International businesses must audit their current constitutional documents and shareholder resolution procedures against the new standards without delay.
This alert summarises the key changes, identifies which business categories are most directly affected, and sets out the immediate actions required to maintain compliance.
What changed – the regulatory developments and their effective date
Hungary's corporate legislation has undergone significant revision. The amendments entered into force in early 2025 and address several distinct governance areas.
First, the rules governing company registration have been tightened. The cégbíróság (Hungarian Company Registry Court) now applies stricter documentary standards when processing incorporation applications and structural changes. Submissions that previously met a lower threshold may now be returned for correction. This affects newly formed entities and those undergoing transformation, merger, or demerger.
Second, mandatory minimum content requirements for articles of association have been expanded. Hungarian corporate legislation now prescribes additional clauses that must appear in the governing documents of limited liability companies (korlátolt felelősségű társaság, or Kft.) and joint-stock companies (részvénytársaság, or Zrt./Nyrt.). Existing articles of association that predate the reform may now be deficient. Companies have a transitional period – ending within the 2025 calendar year – to bring their constitutional documents into conformity.
Third, the rules applicable to the board of directors have been updated. Disclosure obligations for directors have been strengthened. Residency and eligibility criteria for board members in certain company categories have also been clarified. The reforms further address the process by which a shareholder resolution may authorise or ratify board-level decisions, setting out stricter procedural conditions for such ratification to be effective.
Fourth, registered office requirements have been revised. A Hungarian entity must now maintain a registered office that meets updated physical presence criteria. Domiciliation arrangements that rely solely on a virtual address provider may no longer satisfy the revised standard in all circumstances.
Companies incorporated under the previous rules have a transitional window to adapt. However, that window is finite. Entities that miss the deadline face suspension of registry services and potential invalidity of corporate acts taken without compliant constitutional documents.
Who is affected – business categories and threshold criteria
The reforms apply broadly to all commercial entities registered in Hungary. Certain categories face the most immediate exposure.
Foreign-owned Hungarian subsidiaries are directly in scope. Many international groups established a Kft. or Zrt. in Hungary as their Central European operating vehicle. If the articles of association were drafted under the pre-reform regime, a review and amendment are likely required.
Joint ventures with Hungarian partners face added complexity. The shareholder resolution procedures that govern deadlock, reserved matters, and board appointment rights must now be re-examined against the new legislative requirements. Provisions that were enforceable before the reform may require re-drafting to remain effective.
Companies undergoing M&A transactions in Hungary face heightened due diligence obligations. Acquiring entities – and their advisers – must verify that the target's constitutional documents comply with the reformed standard before closing. For a detailed perspective on transaction structuring in this market, see our analysis of M&A in Hungary.
Newly incorporating entities must comply with the new standards from day one. There is no transitional period for companies formed after the effective date of the reform.
The threshold criteria for immediate action are straightforward: any entity with articles of association drafted before early 2025, any company that has not reviewed its board composition against the new eligibility rules. Additionally. Any business relying on a registered office arrangement that has not been verified against the updated criteria should treat compliance as urgent.
To receive an expert assessment of your Hungarian entity's compliance position, contact us at info@ferrazwhitmore.com.
What to do now – immediate actions for international companies
The following steps should be initiated without delay by any international business with a Hungarian corporate presence.
- Audit the articles of association. Compare the existing constitutional documents against the mandatory minimum content requirements introduced by the reform. Identify any clauses that are now absent or non-compliant.
- Review board of directors composition and disclosures. Confirm that each director meets the revised eligibility criteria. Ensure that disclosure obligations – particularly for directors who are foreign nationals – have been satisfied under the new rules.
- Verify the registered office arrangement. Confirm that the current registered office meets the updated physical presence standard. If the company relies on a domiciliation provider, obtain written confirmation of compliance with the revised criteria.
- Update shareholder resolution procedures. Review the internal governance documents – including any shareholders' agreement – to confirm that the process for passing a shareholder resolution remains valid under the reformed legislation.
- File amended constitutional documents before the deadline. Where the audit identifies deficiencies, prepare and file amended articles of association with the Company Registry Court before the transitional period expires.
Engaging a lawyer in Hungary with cross-border corporate experience is advisable at the earliest stage. Errors in reformed documentation are not merely administrative – they can render board decisions and shareholder resolutions vulnerable to challenge. For a comprehensive overview of the corporate governance environment, visit our page on corporate law in Hungary.
Companies facing parallel reform obligations in other EU jurisdictions may also find it useful to review our alert on corporate law reforms in Portugal, which addresses comparable governance updates in the Portuguese market.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our team combines Portuguese civil law expertise with English common law tradition to deliver cross-border corporate law solutions. This includes company registration. Governance restructuring. Additionally, compliance work for international entities operating in Hungary and across Central Europe. The firm's corporate law practice covers entities operating under both civil law codified systems – such as Hungarian corporate legislation – and common law regimes. Our attorneys have advised on company formation, board restructuring, and constitutional document reform across European markets. As a law firm in Hungary-related matters, we support international groups, institutional investors, and in-house legal teams who require coordinated advice across multiple legal systems. To discuss how these reforms affect your Hungarian entity, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.