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BALÁZS & KOVÁTSITS Update on Hungary's Register of Beneficial Owners

Mar 10, 2022 – Budapest, Hungary

BUDAPEST, March 10 - BALÁZS & KOVÁTSITS explain how Hungary's newly launched Register of Ultimate Beneficial Owners works.

Beginning with February 2022 the new register of the beneficial owners has become available in Hungary. The register is led by the Hungarian Tax and Customs Authority and contains almost all of the business entities which were registered in Hungary (e.g. limited liability companies, private limited companies, co-operatives, foundations, Hungarian branch offices of the foreign companies, trustees).

The purpose of the register is to make the ownership relations of the stakeholders of the business and social entities transparent, to serve the effectiveness of the actions against money laundering and terrorism through the creation and maintenance of a centralised record of data regarding beneficial owners, bank accounts and safe service providers.

The register includes data necessary for the identification of the business entity registered in Hungary: registration number, name, registered seat or address if the business entity is a natural person, tax number and company register number or number of the decision of registration. In addition, the registry involves the following data of the beneficial owners of each business entity: first name and last name, first name and last name by birth, citizenship, place and date of birth, home address or residence, type and share of owner's interest in the business entity and the so called TT-index of the data of the beneficial owner.

The TT-index presents the reliability of the data of the beneficial owner. If the data of the beneficial owner has not been verified for more than 180 days, the Hungarian Tax and Customs Authority will publish the list of such beneficial owners on their web page from 01 July 2022. If the data of the beneficial owner is listed as unverified, the legal, financial and business service providers of such entity are under obligation to control the identification of the beneficial owner in greater depth.

If the data of the beneficial owner is unreliable, the Hungarian Tax and Customs Authority will publish the list of such beneficial owners, the legal, financial and business service providers shall identify the beneficial owner with particular attention and they have to deny any and all transactions equal or in excess of HUF 4,500,000 (approx. EUR 12,740). Under the concerning legal regulation, courts, public prosecutor’s offices, authorities and supervisory authorities from Hungary, the European Union and third countries are entitled to inquire data from this new registry if the request for disclosure of the data is in harmony with the obligations prescribed by the law.

The ultimate beneficial owners' register has been introduced in Hungary after the country implemented the 4th and 5th anti-money laundering EU directives as of May 22, 2021.

This legal update was created by Dr. Károly BAGÓCSI, attorney at law, Junior Partner.