Interview with Dr. Balázs Karsai, Managing Partner, Nagy és Trócsányi

17 Jun Interview with Dr. Balázs Karsai, Managing Partner, Nagy és Trócsányi

Nagy és Trócsányi is often at the center of complex, high-stakes legal matters involving both the private and public sectors. Can you share a brief history and update us on its growth, scope and size?

We are a full-service law firm, founded in 1992, with around 20 lawyers today. Over the years, we have been proud to see several of our colleagues go on to hold prominent roles. László Trócsányi, one of our founding partners, served as Hungary’s Ambassador to both Belgium and France, was a Constitutional Court judge and later Minister of Justice. Former colleague László Sólyom became President of Hungary and Zoltán Csehi, once a partner here, is now a judge at the Court of Justice of the EU. Péter Nagy, our other name partner, served for many years on the International Court of Arbitration (ICC), until last year.

We believe this reflects the exceptional caliber of our team and the unique legacy of our firm. Two flagship cases illustrate well the scale and significance of the work we can handle. The first involves the construction of two new nuclear power plant units in Hungary, complementing the four that began operating in the 1980s. We acted as lead counsel for over a decade, advising on international agreements, project financing and compliance with EU requirements. We coordinated with legal and financial experts from the UK, Switzerland, Russia and Germany — making it one of the most complex and high-stakes infrastructure projects in Hungary’s history.

The second case is the repatriation of the Sevso Treasure, a renowned collection of late Roman silver objects. We spent about five years negotiating a legal framework that enabled its return. The process involved collaboration with foreign lawyers, art historians, museum experts and UK authorities. These cases reflect our strength in high-profile, cross-border work. Although based in Hungary, much of our work is conducted in English due to international clients and reporting structures. We maintain strong relationships with top global firms — including many of the largest law firms in the US like Latham & Watkins, White & Case and Baker McKenzie — and are active members of the American Chamber of Commerce in Hungary.

Our approach is rooted in empathy and responsiveness. We strive to fully understand each client’s perspective, which is why I prioritize early, face-to-face meetings — they help build trust and clarity from the start. Responsiveness goes hand in hand with empathy; clients need to feel supported and know they are in good hands. We also value the cultural dimension of our work — interacting with clients and colleagues from different backgrounds enriches our experience and sharpens our ability to adapt and serve effectively.

How would you describe the legal framework in Hungary for investors and partners and how does your firm support them in doing business here?

Hungary’s legal and regulatory framework aligns with international and EU standards. Where conflicts arise, EU law takes precedence. Hungarian law protects property and investment, allowing expropriation only in rare cases of public interest, with full and immediate compensation. Internationally, Hungary is a World Trade Organization member through the EU and a signatory to key treaties such as the International Centre for Settlement of Investment Disputes Convention and the New York Convention. Domestic arbitration rules are based on United Nations Commission on International Trade Law models. Hungary also recognizes ICC arbitral awards. These international commitments help provide legal certainty for foreign investors.

While Hungary has faced several investor-state arbitration cases in recent decades, none have involved US investors. In fact, the US has become one of the largest non-European investors in Hungary, following China and South Korea. Over 1,000 US-owned or US-backed companies operate in the country, primarily in automotive, energy, life sciences and software development. These firms, ranging from Fortune 500 giants like Coca-Cola, Microsoft and ExxonMobil to key players in niche sectors, collectively employ around 100,000 Hungarians. Hungary’s investment incentive system is managed by the Hungarian Investment Promotion Agency (HIPA), which offers cash subsidies, tax breaks, job creation incentives and advisory services. In a recent report, HIPA noted it supported over 2,000 projects worth around $70 billion last year,highlighting Hungary’s appeal.

With improving US-Hungary relations, HIPA is now actively targeting American firms, especially those in AI, financial services and ICT, to expand their presence in the country. Foreign direct investment (FDI) is often a key issue in our work, including cases involving a US investor. Hungary has two FDI regimes: a general regime covering sensitive sectors tied to national security and utilities and a special regime with broader scope. Both require the foreign investor — US companies included — to notify the relevant minister, who must approve the transaction. While the minister can reject a deal on national interest or security grounds, rejections are rare. Under the general regime, reviews apply if an investor sets up a new company, acquires a significant stake, or gains dominant influence, defined by control over key decisions. The special regime applies when the investment exceeds around $1 million and involves control through ownership, voting rights or management appointments.

As Hungary is part of the EU and faces evolving ESG regulations, which sectors are most attractive to foreign investors and where do you see growing legal demand?

As things stand, it seems that AI; environmental, social and governance (ESG) and ICT are some of the most important areas shaping the future. At our firm, we have formed working groups to specifically monitor legal developments in this space. Also, we regularly test AI tools for contract drafting, legal research and document analysis, among other things. While AI can bring efficiency, it also raises legal, ethical and technical challenges, especially around accountability and data privacy. It’s a fast-moving, sensitive area that demands close legal attention.

ESG will remain a key focus in 2025, as large entities face new reporting obligations under the European Sustainability Reporting Standards and the Hungarian ESG Act. Companies will need significant resources to comply, including human, financial and operational resources. I am curious how the public will react and what ESG-related litigation may arise, as such claims are still rare in Hungary compared to places like the Netherlands. Regarding FDI, the EU is proposing to expand screening to include investments by entities established under EU law made through EU entities that are directly or indirectly controlled by non-EU investors.

What is your final message on why our readers should invest in Hungary and choose your firm for legal services?

Our motto for three decades has been, ‘We are not square’, meaning, in short, that we can think outside the box. In today’s fast-changing world, flexibility and creativity in legal solutions are key strengths of ours. We pride ourselves on being unbiased, working both for and against the government, which builds trust and reliability.

Nagy és Trócsányi Ügyvédi Iroda is one of Hungary’s most prominent law firms. Judges often recognize us in court; recently, a judge called us and another firm the two best in Hungary, emphasizing his high expectations. This reflects the quality clients can expect. We have extensive experience with foreign clients and enjoy working with them. Hungary offers a safe legal environment and if there is a legal solution, we will find it.