Working Activity of Foreigners in Hungary

(The text is of informal character only and does not substitute studying of the relevant Law Act.)

Foreigners who intend to carry on working activity in Hungary are to be diveded in three groups:

  1. EEA - citizen, working by reason of a contract concluded with the employer
  2. EEA - citizen working by reason of a contract concluded with a foreign enterprise in form of crossbound services, delegation or workpower lending
  3. Non - EEA citizen

The working activity of persons belonging to the group 1. shall be declared to the competent Labour Office, but no work permit is necessary.

In case of persons belonging to the group 2. neither declaration not permission is necessary.

Persons belonging to the group 3. are to be employed by reason of a work permit. For acquiring the permission the employer shall have declared his need for manpower concerning the concrete field of work if no Hungarian manpower was available and the foreign employee shall correspond with the needs of the employer.

The work permission is granted for the time defined in the so called agreement of accept.

The cases of denying the work premission even if the above conditions have been fulfilled are set up in the corresponding Law Act. These are first of all cases of violation of law.

Special permission conditions apply to the seasonal work in the agriculture.

A work premission shall be given by the authotity without exemining the labour market situation among others:

  • if an international agreement exists
  • if the application concern not more then 5 per cent of the employees and more than 50 per cent of the company shares are owned by foreigners
  • if the working activity has to be carried on by key-personal.

The application for work permit shall be filed by the employer.

The maximum duration of the permission is 2 years, but it can be prolonged.

No permission is necessary among others

  • if an international agreement exists
  • to the employment as leader of a branch office or representation
  • to a putting in service or service activity not longer then 15 days rendered by reason of a private law contract
  • to the employment as CEO of a company with foreign share holder

In these cases the employer has an obligation for declaration only.

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

Source: Government Order Nr. 445/2013 (XI.28.)

In case of working activity in Hungary the strict rules of the Hungarian Labour Code shall be considered.

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

  • an employment contract shall be concluded in writing. If a work permission is necessary the contract may only be concluded after having obtained permission. The employment contract shall regulate the 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 the 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 reasonable. 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 2012: LXXXVI