Hiring foreign work force but how?

14 November 2010

The residence and employment of EEA citizens in Hungary


In the present article we would like to present the determination of the EEA citizen with the currently effective statutory provisions and the accession procedure of the member states. When we start the complicated procedure of the official administration of foreign employees then we can see that every regulation, directive and statute divides the foreign employees into two categories based on the requirements of their residence and employment. These two categories are the EEA citizens and the citizens of third countries.


But what is EEA and how was it established?


The European Economic Area was established in 1994 as the close cooperation of two integrations, the European Union and the EFTA.


  1. The European Union is an economic and political union that was established with the Maastricht Treaty in 1993 based on the European Economic Community. Currently it has 27 member states. The EU grants the free movement of persons, goods, services and capital by introducing single legal system and market.


  1. The European Free Trade Association (abbreviated: EFTA) was established by the Stockholm Agreement in 1960 to grant the free movement of industrial products also for those members who did not join the European Communities. During the coming decades some countries joined this association while others left it to participate in the EEC.


The European Economic Area (EEA) was established by the member states of the European Union and that of the European Free Trade Association in order to expand the common market. Currently the following countries are the member states of the EEA: (Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, United Kingdom, Estonia, Finland, France, Iceland, Ireland, Greece, Netherlands, Poland, Latvia, Liechtenstein, Lithuania, Luxemburg, (Hungary), Malta, Germany, Norway, Italy, Portugal, Romania, Spain, Sweden, Slovakia, Slovenia.)

How can the EEA citizens take up residence and employment in Hungary?

According to Section 1 Paragraph (1) Point a) of the Act number I. of 2007: ‘The Hungarian Republic grants the exercise of the right of free movement and residence for the citizens of the member states of the European Union (except for the Hungarian citizens), other states participating in the agreement on the European Economic Area and for the people who have the same legal status as the citizens of the countries participating in the European Economic Area from the aspect of free movement based on international treaties between the European Community, its member states and other countries not participating in the agreement on the European Economic Area.’


This means that the citizens of the EEA can reside in the territory of the Hungarian Republic with passport or ID without special permission for a period not exceeding three month.

Residence that exceeds three month – in the present case residence because of employment – shall be reported to the authority with jurisdiction at the latest on the 93rd day after entering the country. Of course several official documents are needed for this. So for example a valid labor contract, health insurance and certificate on the accommodation are needed.

From the 1 January 2009 the citizens of the EEA and their family members (family member: the spouse of the EEA citizen, the descendent of the EEA citizen who is supported by the EEA citizen and/or his/her spouse or who is under the age of 21, and the antecedents of the EEA citizen supported by the EEA citizen and/or his/her souse) can be employed in Hungary without permission. The employer is obliged to report the permission free employment of people with the right of free movement and residence. Furthermore tax card and social security card is also needed for the employment or foreign employees in Hungary beside the registration.


The above mentioned official administration is inevitable for foreign employees. If the employee does not have these documents and the employer does not fulfill its obligation of reporting then penalty can be issued following a labor of tax inspection. In the following newsletter we present the residence and employment of third country citizens that is lot more complicated than the administration applicable to EEA citizens.