New intracompany transfer regulations take effect
28 Oct 16
IMPACT – MEDIUM
What is the change? Hungary has implemented new regulations in order to stay in compliance with a European Union directive on intracompany transfers.
What does the change mean? The Labor Office will require that non-EU nationals transferring from within the EU to work in Hungary for more than three months have, among other provisions, an employment contract establishing that the employee will not be paid less than Hungarian employees in similar jobs, relevant educational or professional certifications, health insurance, a valid address in Hungary and financial means of support.
- Implementation time frame: Immediate and ongoing. The changes went into effect Sept. 30.
- Visas/permits affected: Intra-corporate Transferee Permits.
- Who is affected: Employers and non-EU nationals applying for Intra-corporate Transferee Permits.
- Impact on processing times: Processing is expected to take about 30 days.
- Business impact: Both sending and host companies should make sure they satisfy all requirements when transferring non-EU nationals to Hungary for work.
Background: Hungary implemented the regulations in order to stay in compliance with a 2014 EU directive on intracompany transfers. Among new requirements for non-EU nationals being sent to work in Hungary for more than three months:
- Transferees must have been continuously employed by the sending company (or another company in the corporate group) prior to being transferred.
- Transferees must possess the necessary education and training certificates for their position.
- An assignment letter or contract must be in place between the transferee and the sending company that guarantees a rate of pay not less than other foreign assignees working in the same job.
- Transferees must have health insurance, a valid address in Hungary and the financial ability to care for themselves and any dependents.
- Host companies must be prepared to issue a statement saying they will adhere to any relevant regulations or agreements on working conditions.
Documents must be submitted at least 20 days before the start of employment. Non-EU nationals transferring to Hungary for less than three months will not be required to obtain a separate Hungarian permit, provided that the transferee has a valid permit issued by another EU member state and the activities the transferee will be performing in Hungary are covered by his or her permit.
BAL Analysis: The implementation of the changes described above came one month after Hungary implemented new rules for posted workers. Businesses should take note of the changes both for intracompany transferees and posted workers, and should contact BAL with any questions about remaining in compliance with any of the new regulations.
This alert has been provided by the BAL Global Practice group and our network provider located in Hungary. For additional information, please contact your BAL attorney.
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