Hungary: Formation of joint ventures

Setting up joint ventures in Hungary is quite similar to setting up JVs anywhere else. Hungarian law does recognize both contractual and corporate JVs. Under a contractual JV, the contract governs the common future project, the rights and obligations of the parties, while in a corporate JV structure, a stand-alone legal entity is set up which is governed by the participants jointly. In a corporate JV, a so-called shareholder’s agreement maps out the rules of joint governance apart from the articles of association of the given company. Breach of the shareholder’s agreement does not affect the functioning of the JV, only creates a contractual claim against the infringer party.

To both types of JV, the Hungarian Civil Code applies, namely and most importantly the contractual freedom.