Hungary has introduced an immediate restriction affecting foreign workers, banning the recruitment of new guest workers from the Philippines, Georgia and Armenia through a fast-track employment procedure.
The announcement was made during Thursday’s government press briefing, where officials outlined a series of economic and legislative measures. For thousands of foreign workers already living and working in Hungary, however, the guest worker decision is likely to be the most significant development.
What is changing for guest workers?
The government had previously pledged that, from 1 June, guest workers from third countries would no longer be allowed to enter Hungary under existing arrangements. However, officials admitted that the legal framework remains complicated because foreign nationals have been able to arrive under 24 different legal categories.
As an immediate first step, labour-hire and recruitment companies will no longer be able to bring workers from the Philippines, Georgia and Armenia to Hungary through the accelerated employment procedure.
Government representatives said an overhaul of the guest worker system is still being prepared and that a long-term solution will take time to develop.
What happens to workers already in Hungary?
The government stressed that the new measure does not affect foreign nationals who are already legally employed in Hungary.
Workers who previously arrived from the affected countries will still be able to apply for extensions to their work permits. Authorities will also continue processing applications that have already been submitted.
This means the restriction primarily affects future recruitment rather than those currently living and working in the country.
Government seeks tighter control over foreign labour
Officials acknowledged that the current system is difficult to oversee, partly because of the large number of legal pathways through which foreign workers have entered Hungary in recent years.
According to the government, one of the objectives of the upcoming reform is to establish a clearer picture of how many guest workers are currently in the country and under which legal categories they were admitted.
The latest measure signals a tougher approach to labour migration while the government works on a broader restructuring of Hungary’s foreign employment rules.
Hungary secures major EU funding package
The guest worker announcement came alongside news that Hungary is set to gain access to substantial European Union funding, Telex reports.
Transport and Investment Minister Dávid Vitézy announced that Hungary would receive EUR 10 billion from the EU Recovery and Resilience Facility, funding that had previously been frozen over concerns related to anti-corruption safeguards and transparency measures.
The government plans to submit a new anti-corruption and transparency legislative package to Parliament next week in order to meet the remaining conditions attached to the funds.
According to Vitézy, the money will support major investments, including upgrades to Hungary’s electricity grid, support programmes for small and medium-sized businesses, student accommodation and affordable housing projects, as well as the modernisation of railway and HÉV suburban rail services.
An additional EUR 4.2 billion from EU cohesion funds is also expected to become available for public transport, environmental protection and flood-prevention projects.
New rules planned for battery industry
The government also announced plans to tighten regulations governing Hungary’s battery industry.
Officials said a nationwide inspection programme will be launched this month, followed by a new regulatory framework aimed at strengthening environmental accountability. The reforms are expected to affect battery manufacturing, the chemical industry, and hazardous and illegal waste management.
The government said it intends to reinforce the principle that polluters should bear the cost of environmental damage.
Simplified tax scheme may return in 2027
Finance Minister András Kármán also revealed that the widely used KATA small-business tax scheme could return in a broader form from 2027.
The government estimates that between 300,000 and 500,000 microbusinesses, sole traders and self-employed individuals could benefit from a simplified taxation system designed to reduce administrative burdens.
Kármán described the previous government’s overhaul of KATA as one of the biggest policy mistakes of recent years, arguing that it failed to distinguish between legitimate small entrepreneurs and those exploiting loopholes in the system.
Make sure to check back to this article later for any updates!
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