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Proposal Aiming for Special Industrial Zones

Proposal Aiming for Special Industrial Zones

Hungary
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The Hungarian Parliament accepted a bill on 16 June 2020, which would enable the creation of special industrial zones. “The designated special industrial zones will be contributing to the restarting of the economy, creation of new jobs, and also the preservation of the existing jobs” stands in the press release. According to the legislation, the main goal of the regulation is to facilitate a fairer distribution of tax income realized from greater investments as these zones would be no longer under the control of the local council.

Special industrial zones would be territories, where special regulations would apply to the investments planned. These territories would be defined by a Government decree if the volume of the contemplated investment would reach up to HUF 5 billion (~ EUR 14.5 million), which would be of economical importance for the whole municipality and would prevent significant loss of jobs or facilitate the creation of new ones. 

If a special industry zone is set up, the county representative council would exercise the duties and powers of the local council in the given territory. This means that the county representative council would have the right to levy local taxes and to decide upon their distribution. Budapest, as capital would be exempted from the abovementioned rules. 

Many mayors have expressed their dismay in connection with the proposed legislation, as they argue that many local municipalities would be deprived of legitimate tax income, thus their day-to-day operation could be in danger in the future.

By Gabriella Galik, Partner, KCG Partners Law Firm

Hungary Knowledge Partner

Nagy és Trócsányi was founded in 1991, turned into limited professional partnership (in Hungarian: ügyvédi iroda) in 1992, with the aim of offering sophisticated legal services. The firm continues to seek excellence in a comprehensive and modern practice, which spans international commercial and business law. 

The firm’s lawyers provide clients with advice and representation in an active, thoughtful and ethical manner, with a real understanding of clients‘ business needs and the markets in which they operate.

The firm is one of the largest home-grown independent law firms in Hungary. Currently Nagy és Trócsányi has 26 lawyers out of which there are 8 active partners. All partners are equity partners.

Nagy és Trócsányi is a legal entity and registered with the Budapest Bar Association. All lawyers of the Budapest office are either members of, or registered as clerks with, the Budapest Bar Association. Several of the firm’s lawyers are admitted attorneys or registered as legal consultants in New York.

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The firm advises a broad range of clients, including numerous multinational corporations. Among our key clients are: OTP Bank, Sberbank, Erste Bank, Scania, KS ORKA, Mannvit, DAF Trucks, Booking.com, Museum of Fine Arts of Budapest, Hungarian Post Pte Ltd, Hiventures, Strabag, CPI Hungary, Givaudan, Marks & Spencer, CBA.

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