- Laws regulating the banking system in Hungary
- Major banks in Hungary
- OTP Bank in Hungary
- K&H Bank in Hungary
- UniCredit Bank Hungary
- Erste Bank in Hungary
- MKB Bank in Hungary
- Bank account in Hungary and its perks for non-residents
- Tips for foreigners wishing to overcome language and regulatory challenges when setting up a bank account in Hungary
- Complete checklist of required documents for foreigners about to open a bank account in Hungary
As a gateway to the European financial market, banks in Hungary are an attractive option for foreign individuals and businesses. However, the process of becoming a client as a foreigner can be complex. Can foreigners open a bank account in Hungary, and what are the necessary steps?
While local financial institutions are keen to welcome new customers, they must also abide by EU regulatory requirements as part of the wider European banking system. As a result, citizens from other countries who want to open a bank account with a bank in Hungary will need to navigate additional requirements and procedures to gain access to this service.
Laws regulating the banking system in Hungary
For foreigners planning to open a bank account in Hungary, it’s crucial to be familiar with the legal framework that governs the local financial system. Doing so will provide a deeper understanding of the principles that guide its operations and ensure a smoother account opening process.
Below, the main regulatory bodies overseeing banks in Hungary are listed:
- Central Bank
- Financial Services Authority.
Here are some of the essential laws that banks operating in Hungary must comply with:
- On the Central Bank of Hungary (CXXXIX 2013): the law that defines the powers and functions of the Central Bank of Hungary. Inter alia, here’s what they include:
- managing monetary policy
- issuing currency
- overseeing the banking system.
- On Credit Institutions and Financial Companies (CCXXXVII 2013): the primary law that outlines the conditions and requirements for establishing and operating banks in Hungary, including capital management, deposit protection, and consumer rights.
- On Payment Services (LXXXV 2009): the law that governs the requirements for providing financial services in Hungary, including services related to bank cards, investments, and insurance.
- On Anti-Money Laundering and Counter-Terrorism Financing (LIII 2017): the law that financial institutions established in Hungary are required to comply with. It governs the procedures for customer due diligence, risk assessment, and reporting obligations, and sets penalties for companies that fail to meet its requirements. This law is in line with the requirements of the 4th, 5th, and 6th AMLD of the European Union, and plays a critical role in combating money laundering and terrorist financing.
- On Right to Informational Self-Determination and Freedom of Information (CXII 2011): the law establishes requirements for the protection of the personal data of bank clients in Hungary. It ensures that individuals have control over their personal information and that their rights to privacy are respected
In addition to the national laws mentioned above, local banks are also required to comply with the requirements of European regulators. It is worth noting that Hungarian legislation is swiftly brought in line with EU Directives, which ensures that the banking sector remains up-to-date with the latest regulatory standards.
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Major banks in Hungary
As of March 2023, the Hungarian Banking Association consists of 52 financial institutions as members. The following are some of the major ones that are represented in the association.
OTP Bank in Hungary
With roots in Hungary, this banking group has subsidiaries in 11 Central and Eastern European countries. As such, it’s no surprise that OTP Bank is the largest bank in Hungary. It leads the market in many aspects, including asset size, deposit volume, and loans. Clients have access to a wide range of financial services, from account opening to asset management, at this bank.
K&H Bank in Hungary
Ranked among the top banks in Hungary for retail and corporate services, K&H Bank offers a wide range of financial services including bank accounts, loans, insurance, and savings products. With a significant network of 204 branches and over 200 ATMs across the country, K&H Bank is a popular choice for those seeking accessible and convenient banking options in Hungary.
UniCredit Bank Hungary
UniCredit Bank Hungary is a versatile financial institution that offers a wide range of financial products and services for both individual and corporate clients, including accounts, deposits, loans, investments, insurance, and digital solutions. With over 50 branches across Hungary, UniCredit Bank Hungary serves more than 500,000 clients.
Erste Bank in Hungary
Among the largest banks in the Hungarian banking market, Erste ranks in the top three by the number of customers, as well as by the size of its branch network (about 200) and ATMs (over 400). Like other Hungarian banks, Erste is a universal financial institution with a vast range of products and services. Its product line includes various banking services such as accounts, deposits, loans, insurance, and investment solutions.
MKB Bank in Hungary
On May 1, 2023, MKB Bank and Takarékbank are expected to complete their merger and will continue their operations under the name MBH Bank Nyrt, becoming the second-largest Hungarian bank in terms of assets. This move will enhance the capabilities and reach of the new entity, enabling it to offer a wider range of financial services and products to its clients.
Bank account in Hungary and its perks for non-residents
As a foreigner, becoming a client of a bank in a new country offers many benefits beyond just accessing the local financial system. However, it’s important to carefully consider these benefits and weigh them against the costs associated with traveling abroad.
If you’re considering opening a bank account in Hungary, you may be able to take advantage of the unique benefits such an account comes with:
- Transactions in the national currency: By opening an account with a local bank, foreigners can transact for goods and services in the local currency, avoiding unfavorable exchange rates and conversion fees.
- Access to European banking services: Becoming a client of a Hungarian bank provides access to financial instruments commonly offered by EU banks, such as Visa or Mastercard payment cards, and EUR or HUF deposits or accounts.
- Credit history in Europe: Having a bank account in Hungary can be the first step towards building a credit history in Europe. Hungarian bank partners can provide recommendation letters, statements, or other documents on request.
- Participation in the guarantee fund: Foreigners with deposits and other accounts in Hungary up to 100,000 EUR are automatically compensated within 10 working days. The compensation is paid only in forints.
- SEPA transfers: fast EUR payments in EU countries.
- Useful tool for digital nomads: A bank account in Hungary can be a necessary tool for digital nomads who often require a bank account to receive payments for their services and transfer money throughout Europe.
- Backup option: An account with a Hungarian bank can be a backup option for conducting transactions in case other foreign accounts are blocked or access to them is restricted.
Tips for foreigners wishing to overcome language and regulatory challenges when setting up a bank account in Hungary
Foreigners who wish to open a bank account in Hungary are likely to encounter several challenges:
- Communication and document completion is only available in Hungarian, which can be a challenge for foreigners as finding a bank employee who speaks English to open a bank account can be difficult. Additionally, the online banking system does not have an English language option.
- All documents must be translated into Hungarian by a certified specialist.
- To open a bank account, foreigners need to provide their identification number, proof of address, and residence permit. However, some banks have more lenient requirements for potential foreign clients wishing to open a bank account in Hungary.
- Challenges with service. Due to poor communication, bank managers may mistakenly open the wrong account or offer a more expensive service when a cheaper alternative is available. For foreigners about to open a bank account in Hungary, this can lead to a time-consuming process of correcting the mistake.
To avoid all the aforementioned challenges, it’s crucial to seek the help of experienced professionals. Not only will this save you time and money, but it will also prevent any potential issues from arising down the line. By entrusting your account opening process to the International Wealth experts in the field, you’ll be able to navigate the complexities of the Hungarian banking system with ease and confidence. So don’t hesitate to reach out to the International Wealth reputable consultants who specialize in assisting foreigners with banking in Hungary – they’ll be happy to guide you every step of the way.
Complete checklist of required documents for foreigners about to open a bank account in Hungary
Requirements for clients vary depending on the internal policies of banks in Hungary. In addition, the type of account and the client’s country of origin will directly affect the amount of documentation required. While there is no universal list of required documents for opening a bank account in Hungary, here’s what some of the commonly requested documents include:
- valid passport that’s recognized internationally
- proof of address, which can be a utility bill, lease agreement, or any other document that states your name and address
- tax identification number (TIN), which is required in Hungary, but can be obtained from the Hungarian tax authority if you don’t have one
- evidence of income, such as a salary statement, income tax return, or sales contract
- work permit or residence permit, which some banks may request from foreign applicants
- completed customer information form (KYC)
- documents proving your ownership of any assets listed in your customer information form.
NB: the specific requirements may vary depending on the bank’s internal policies, the type of account, and the client’s country of origin.
Opening a bank account in Hungary as a foreigner can be a daunting task due to the varying procedures and specific requirements of each financial institution and account type. Attempting to do it alone without adequate knowledge and experience can prove to be very difficult. To avoid potential issues and delays, it is crucial to accurately complete the customer form as it directly affects the amount of documentation required, the speed of account opening, and the outcome.
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