Working Activity of Foreigners in Hungary

The main principle of the regulation of performing a working activity by foreigners in Hungary is, that apart from the concrete legal relation an authority permission is necessary.

There is no need for permission among others
  • in case of  a different regulation of an international agreement
  • if the foreigner is employed as leader of a branch or representation in Hungary founded by a foreigner
  • if the activity of the foreigner is performed in frame of a private law contract such as setting, warranty or service activity, not longer than 15 days at every time
  • if the foreigner is acting as general manager or supervisery board member of a joint venture company

The permission is either an individual or a group permission (if the private law contract demands the employment of more persons like in case of a construction contract for example).

Permission proceeding's costs
  • proceeding's fee - HUF 2.200/person
  • other administration costs (e.g. translation costs about HUF 3.000/page, certification of documents HUF 10.000 - 100.000)
  • lawyer's fee as agreed

The permission is given by the competent Labour Office in respect of the aspects defined by the law (total number of permissions available in the given year, result of searching labour market etc.).

In case of  EU-citizens the general principle is, that provided that the applicant is citizen of a member-state having applied for derogation concerning Hungary, a permission is necessary, otherwise the working activity is free.

Source: Gow.Res. 355/2007, Soc.Min.Res. 8/1999

In case of a working activity in Hungary the legal rules of entry and stay of  foreigners shall apply as well.

An employment contract between a Hungarian employer and a foreign employee for working activity in Hungary may only be concluded under Hungarian law.

The most important particulars in this connection are
  • employment contract shall be concluded in writing. If a working permission is necessary the contract may only be concluded after having obtained permission. The employment contract shall regulate scope of activity, salary, working place and may regulate other topics as well.
  • in the employment contract a probation time not longer than three months may be stipulated. During this period the parties have the right of immediate termination without giving reasons
  • a modification of the contract can only be done by mutual agreement
  • the employment contract may be concluded for a definite or an indefinite time. A contract concluded for a definite time may only be finished before expiry either by mutual consent or by immediate termination, unless the employer pays total avarage salary for the rest time (but for one year maximum). For an immediate termination reasons shall be given. An immediate termination is allowed in case of serious breach of contract by the other party.
  • an employment contract for undefinite time may be terminated by the employer at any time, but reasons shall be given. The reasons shall be clear, real and reasonble. The employee may however terminate such contract at any time without giving reasons.
  • the period of notice depends on how long the contract has been existed but it is at least 30 days and not longer than one year. For the time of period of notice the employee is entitled to avarage salary. The employer shall exempt the employee from work for at least the half time of notice provided that the contract has been terminated by the employer.
  • in case of  a regular termination by the employer a severance pay is due to the employee provided  that the contract has been existed for at least three years. The severance pay amounts to at least a one month salary but not more than a salary for six months.
  • in case of general managers the termination rules are different (for example no termination reason shall be given in case of  termination by the employer)

Source: Law Act 1992: XXII