New Immigration Laws Effective March 1, 2024

End of the 'Single Permit'; multiple new permits. The previous Work & Residence Permit – often called the 'Single Permit' – has been replaced by a wide range of permits, many of which are new, including:

• Guest Worker permits. For a wide range of temporary work roles (discussed further below).
• The Hungarian Card. A type of 'highly skilled talent' work permit (discussed further below).
• The Residence Permit for the purpose of Posting. A type of posted worker work permit where the posting company must be within the European Union.
• The National Card. Specific to Serbian and Ukrainian nationals, with eligible applicants being work permit exempt and able to access non-labor shortage roles. Despite the 'National Card' being new per se,a similar regime existed previously for Serbian and Ukrainian nationals. Update - July 10, 2024: Effective July 10, 2024, eligibility for the National Card has expanded to include not only nationals of Serbia and Ukraine but also of Belarus, Bosnia and Herzegovina, Moldova, Montenegro, North Macedonia, and Russia.

There are also some permits that are remaining under the new system, including:

• EU Blue Card. This permit existed previously but now allows for foreign nationals in certain information technology roles to be eligible if they have adequate professional experience (regardless of educational qualifications).
• Intra-Corporate Transfer Residence Permit. This permit type has not undergone any changes.

Given the new diversity of permit types, employers may need to consider their future human resources strategy with fresh eyes. A 'one-size-fits-all' approach is unlikely to suffice anymore.

Guest Worker permits. The new 'Guest Worker' category includes four new types of residence permit:

• A seasonal employment permit for seasonal roles in areas like agriculture, fishing, plant production, and forestry.
• An 'employment for investment purposes' permit which provides a right of employment for the purpose of carrying out an investment.
• Residence permit for purposes of employment. This captures employees on a Hungarian payroll with positions where the employee's Hungarian Standard Classification of Occupation, which often captures lower-skilled roles and roles not requiring any educational qualifications, but can also encompass highly-skilled roles that overlap with the Hungarian Card and the EU Blue Card.
• Guest worker residence permit. This permit is linked to employers engaged in projects of strategic significance for the Hungarian economy. Update - July 10, 2024: Effective July 10, 2024 and following their addition to eligibility for the National Card, nationals of Belarus, Bosnia and Herzegovina, Montenegro, North Macedonia, and Russia are no longer eligible for the residence permit for guest workers.

Validity period. Guest Worker permits are valid for two years and can be extended a further one year.

Limitations. Guest Worker permits have the following notable limitations:

• Ban on certain roles for non-EU foreign nationals. There are approximately 300 roles which non-EU foreign nationals will not be eligible for under the Guest Worker permit category, including roles in the armed forces and the police services, government and politics, health, education and elderly care, engineering and science, law and accounting, medicine, news, culture and the arts, as well as driver, mechanic and company director and chief executive roles.
• Guest Worker permits cannot be renewed. Affected individuals must instead apply for a new permit each time. In the interim period they will not be allowed to work. Previously, 'single permit' holders could renew their permits prior to expiry.
• Status change. Guest Worker permit holders cannot switch to another type of permit, including permanent residence. Previously, 'single permit' holders could change their permit status, including arranging permanent residence.
• Family reunification. The dependent family members of guest worker permit-holders are not eligible for family reunification permits. Previously, the family members of 'single permit' holders were eligible for family reunification permits.
• Guest worker specific limitations. The other permit types are not subject to these above limitations.

The new 'Guest Worker' category provides a more restrictive immigration pathway than the previous 'Single Permit' option. In short, it is less attractive for foreign workers and their employers.

Employers will face increased challenges sourcing and retaining relevant foreign talent. The range of eligible roles has decreased (including due to the list of around 300 banned roles for non-EU foreign workers), and employers will face periodic 'work pauses' where existing employees are unable to work until they obtain a new work permit.

Employees may be deterred from working in Hungary given barriers to ever accessing permanent residence (or alternate immigration statues), and challenges in bringing over their family.

The Hungarian Card.

• This new permit is a domestic equivalent of the EU Blue Card, catering to highly-skilled talent who either have adequate higher education qualifications (which directly relates to the role in question) or are engaged in sport or the performing arts.
• Talent shortage roles. It is largely limited to roles that are facing talent shortages, including in the engineering or information technology space.
• Minimum salary level. The minimum salary of the role must at least be 80 percent of the average salary received by a Hungarian national in the same role.
• Renewal, family reunification and change of status. Unlike the guest worker category, this permit allows for permit renewal, family reunification, and change of immigration status (including accessing permanent residence).

Alongside the more relaxed EU Blue Card pathway, this new status may assist employers seeking talent in, among other areas, the engineering and information technology sector.

Given this card is not affected by the same limitations imposed on the Guest Worker permit (that is, renewal, reunification and status change limitations), eligible foreign workers are likely to be attracted to this option.

Stricter notification rules.

• Employers must notify the government of the start date or termination of employment.
• Employers of guest workers, or workers holding a residence permit issued for the purpose of investment or employment, must ensure the worker leaves Hungary at most six days after the termination of employment.
• Employers who violate these rules are subject to a fine, which has increased to HUF 1 million (up from HUF 500,000) per violation.

Employers will face stricter enforcement for the notification requirement and higher fines.