Company formation in Hungary
Hungary attracts foreign investors with its favourable tax regime and simplified business registration procedure. In this article, lawyers from Regulated United Europe would like to review the key stages of setting up a company in Hungary, taxation peculiarities and important legal aspects to be paid attention to when doing business.
Step 1: Choosing the legal form
The most popular business forms among foreign investors are the private limited liability company (Kft.) and the joint stock company (Zrt.). Kft. is suitable for small and medium-sized enterprises with a limited minimum authorised capital of 3 million Hungarian forints (about 10 thousand euros), while Zrt. requires an authorised capital of at least 20 million forints (about 65 thousand euros).
Step 2: Company registration
The company registration process begins with the filing of an application with the Court of Registration through a certified Hungarian lawyer. The documents required for registration include the memorandum of association, articles of association, details of directors and shareholders, and proof of payment of the share capital.
Step 3: Tax registration and opening a bank account
After registering your company, you need to register with the tax office and obtain a tax number. This will allow you to open a bank account in a Hungarian bank, which is a prerequisite for doing business.
Taxation
Hungary offers one of the lowest corporate tax rates in Europe at 9%. In addition, it is possible to take advantage of VAT exemptions for certain activities, especially in the area of exports. The standard VAT rate is 27%, but reduced rates may be applied for certain goods and services.
PACKAGE «ESTABLISHMENT OF A COMPANY in Hungary» |
2,500 EUR |
- The establishment of a company in Hungary
- Provision of the services with no hidden fees
- Drafting of required documents
- Notary services and state fees
- Assistance in registration of share capital
- Virtual office/legal address for 1 year / No need for a physical office in Hungary
- Providing the list of banks for opening a bank account
- Private consultation with our Accountant
- The first month of accounting services free of charge (up to 10 transactions)
- 10% discount on legal services (if required)
Corporate services in Hungary
Open business in Hungary
Hungary has become one of the attractive destinations for foreign investors due to its central European location, flexible economic policy and support for innovation.
Choice of legal form of business
First of all, it is necessary to decide on the form of ownership of the enterprise. For small and medium-sized businesses, the form of a private limited liability company (Kft.) is most often chosen, as it involves minimal risks for the owner and does not require a large authorised capital. For larger projects, a joint-stock company (Zrt. or Nyrt.) is suitable, as it has greater opportunities for attracting investment.
Registration process
Starting a business starts with preparing and submitting the necessary documents for company registration. You will need:
- Articles of Association and Memorandum of Association (can be prepared with the help of a lawyer in Hungary).
- Information on directors and founders.
- Proof of the address of the legal entity in Hungary.
- Payment of the authorised capital (the amount depends on the chosen form of ownership).
Documents are submitted to the Court of Registration through a lawyer. The average time for company registration is 1 to 2 weeks.
Taxation and accounting
The key to doing business in Hungary is to understand the taxation system. Corporate tax is 9%, which is one of the lowest rates in Europe. It is also important to take into account VAT, the standard rate of which is 27%. It is essential to ensure that all transactions are accurately recorded and reported to the tax authorities in a timely manner.
Opening a bank account and financing
Doing business in Hungary requires opening a local bank account. This can be done after registering a company and obtaining a tax number. Foreign investors also have access to various forms of financing, including bank loans and government grants to support innovative and export-oriented projects.
Advantages of opening company in Hungary
Hungary has proven in recent years to be one of the most attractive destinations for international business in Europe. Its stable economy, flexible tax system and strategic geographical location make it an ideal place to start a company.
Geographical location
Hungary is located in the heart of Europe, providing excellent transport links to other European Union countries. This provides companies with easy access to major European markets, simplifying logistics and expanding trade and export opportunities.
Tax benefits
One of the most significant advantages of doing business in Hungary is the low corporate tax rate of only 9%, one of the lowest in Europe. This makes Hungary attractive for business entities seeking to minimise their tax liabilities. In addition, there are various tax incentives for investors, including incentives for research and development projects.
Simplicity of business procedures
Hungary ranks high in world rankings on the ease of doing business. The government is committed to simplifying administrative and legal procedures for starting and running a business. This includes a simplified company registration process and minimal bureaucratic barriers to starting a business.
Strong support for innovation
Hungary actively supports the development of innovation and technology by offering a variety of grants and funding for start-ups and R&D projects. The government has invested heavily in the creation of innovation parks and technology incubators, which creates a favourable environment for technology and scientific enterprises.
Access to qualified personnel
Hungary offers a high level of education, especially in technical and engineering specialities. Many world-renowned universities produce qualified professionals, which is an important resource for any company. The availability of educated and multilingual employees makes the recruitment and training process much easier.
Forms of business in Hungary
Choosing the right form of business is a critical step when entering the Hungarian market. This choice can have a significant impact on taxation, obligations to public authorities and the degree of legal liability. There are several basic business forms available in Hungary, each with its own characteristics and suitable for different business goals and strategies.
- Individual entrepreneur (Egyéni vállalkozó)
A sole proprietorship is the simplest and least regulated form of business, ideal for a single owner. This form involves full personal responsibility for the debts and liabilities of the business. Advantages include minimal registration requirements and simplified taxation.
- Partnership (Betéti társaság, BT)
A partnership is a form of business that involves two or more partners working together. In Hungary, such partnerships can be “simple” (BT), where all participants have unlimited liability for the obligations of the enterprise.
- Limited Partnership (Közkereseti társaság, KKT)
A limited partnership in Hungary provides for limited partners, who invest capital and have limited liability limited to the amount of their investment, and limited partners, who manage the business and have full liability.
- Limited Liability Company (Korlátolt felelősségű társaság, Kft.)
This is the most popular form of business among small and medium-sized enterprises. The minimum authorised capital is 3 million Hungarian forints (about 10 thousand euros). The participants are not personally liable for the company’s obligations, which makes this form attractive to many entrepreneurs.
- Joint Stock Company (Részvénytársaság, Rt.)
A joint stock company can be of the closed (Zrt.) or open (Nyrt.) type. This form is suitable for large operations and companies planning to attract investments through a public offering. The minimum authorised capital for a closed joint stock company is 5 million forints (about 16 thousand euros).
What types of companies exist in Hungary?
Hungary offers many forms of legal entities that can be chosen for doing business. Each type of company has its own characteristics that affect the duties, rights and tax obligations of the founders and managers.
- individual entrepreneur (Egyéni vállalkozó)
This is the simplest and most inexpensive form of business, ideal for a single owner. Sole proprietors are fully personally responsible for the operation of their business, including all debts and liabilities.
- partnership (Betéti társaság, BT)
A partnership is a business based on the partnership of two or more persons who together manage the company and share the profits. All partners are jointly and severally liable for the company’s obligations, which implies unlimited personal liability of each partner.
- Limited Partnership (Közkereseti társaság, KKT)
A limited partnership in Hungary comprises two types of partners: active (limited partners), who manage the business and are fully liable, and passive (limited partners), who contribute capital and whose liability is limited to the amount of their contribution.
- Limited Liability Company (Korlátolt felelősségű társaság, Kft.)
This is the most popular type of company for small and medium-sized businesses in Hungary. Kft. allows its owners (founders) to limit their liability to the amount of the contributed share capital. This type of company is ideal for entrepreneurs who wish to minimise their personal financial risks.
- Joint Stock Company (Részvénytársaság, Rt.)
Rt. can be closed (Zrt.) or open (Nyrt.). Closed joint-stock companies are often used for large companies with a limited number of shareholders, while open joint-stock companies can sell shares to the general public. The shareholders of these companies have limited liability equal to the value of their shares.
What is the amount of the authorised capital of a company in Hungary?
The authorised capital is a fundamental aspect of company formation, which determines the minimum amount of funds that the founders must contribute in order to start a business. In Hungary, the requirements for the authorised capital vary depending on the type of legal entity.
Limited Liability Company (Kft.)
The limited liability company (Kft.) is the most popular form of business in Hungary, especially among small and medium-sized enterprises. The minimum authorised capital for a Kft. is 3 million Hungarian forints (approximately 10 thousand euros). This amount must be paid in at the time of incorporation, which demonstrates the financial strength and seriousness of the founders’ intentions.
Joint Stock Company (Zrt. and Nyrt.)
A joint stock company may be closed (Zrt.) or open (Nyrt.). For a closed joint stock company (Zrt.), the minimum authorised capital is 5 million Hungarian forints (about 16 thousand euros). An open joint stock company (Nyrt.), involving public trading of shares, requires an authorised capital of at least HUF 20 million (approximately EUR 65 thousand). These requirements reflect the increased risks and scale of operations of such companies.
Limited partnership (Kkt.)
In a limited partnership (Kkt.), the requirements for the authorised capital can be flexible and are determined by the terms of the agreement between the partners. However, as a general rule, the minimum capital must be sufficient to cover the initial operating expenses and liabilities of the business.
Partnership (Bt.).
For a partnership (Bt.), the law does not set strict requirements for the minimum authorised capital. However, the partners must contribute sufficient funds to maintain the business and cover any operating expenses in the course of its activities.
Does a company in Hungary have to have a local director?
One of the important aspects of corporate governance when registering a company in Hungary is the appointment of a director. The question of the need for a local director often arises for foreign investors wishing to set up a business in Hungary.
Legal requirements
There is no strict requirement in Hungarian law that a local director must be appointed for companies incorporated in Hungary. A director can be a person of any nationality and residence. However, it is important to take into account some nuances related to the management and administrative processes of the company.
Practical aspects of having a local director
Although the law does not require the appointment of a local director, in practice having a director resident in Hungary can present a number of advantages:
- Communication with local authorities and banks. The local director can communicate more effectively with government agencies, tax authorities and financial institutions, which simplifies administrative issues and improves operational efficiency.
- Understanding of the local market and legislation. A director who is familiar with the Hungarian business climate and legal framework can prevent many legal and strategic mistakes.
- Representation and legitimacy. Having a local director can increase the trust of partners and customers and improve the company’s image on the Hungarian market.
Alternatives to the appointment of a local director
For companies that prefer not to appoint a local director, the following alternatives are possible:
- Utilising the services of professional directors. Some firms offer the services of temporary or permanent directors who can legally act in this role.
- Management from abroad. Modern technology allows a company to be managed remotely, although this can complicate some processes such as banking or legal affairs.
What are the state fees for establishing a company in Hungary?
Incorporating a company in Hungary involves the payment of government fees, which vary depending on the form of the legal entity and the complexity of the incorporation process. Understanding these fees helps entrepreneurs to plan costs and manage their budget effectively when setting up a business.
Main types of fees
- Registration of a limited liability company (Kft.)
- State registration fee: When registering a Kft. a fee of 50,000 Hungarian forints (approximately 150 euros) must be paid. This fee includes the costs of making an entry in the commercial register and publishing company data.
- Fee for filing documents electronically: If the registration documents are submitted online, there is an additional fee of HUF 5,000 (approx. EUR 15).
- Registration of a joint stock company (Zrt. or Nyrt.)
- State registration fee: For a closed joint-stock company (Zrt.) the fee is 100,000 HUF (approximately 300 EUR) and for a public joint-stock company (Nyrt.) the fee is 600,000 HUF (approximately 1,800 EUR). These fees reflect the higher documentation requirements and the complexity of the registration process.
- Registration of the partnership (Kkt. or Bt.)
- State registration fee: For a limited partnership (Kkt.) and a partnership with unlimited liability (Bt.), the registration fee is 25,000 HUF (approx. 75 EUR).
Additional fees
- Notarisation costs: Some documents, such as memorandums of association or amendments to the articles of association, must be notarised. The cost of notarisation may vary depending on the complexity of the documents and the amount of work involved.
- Legal Support Fees: While these are not government fees, many companies use law firms to prepare and file documents, which also incurs additional costs.
What is the annual cost of maintaining a company in Hungary?
Doing business in Hungary entails not only the initial costs of incorporating a company, but also regular annual costs that need to be considered to keep the company in compliance with local legal and tax requirements.
- Tax liabilities
- Corporate tax: The corporate tax rate in Hungary is one of the lowest in Europe at 9%. The amount of tax depends on the company’s profits.
- Value Added Tax (VAT): The standard VAT rate in Hungary is 27%, but there are preferential rates for certain goods and services. Companies are required to file regular VAT returns.
- accounting and audit
- Accounting services: All companies in Hungary must keep records of their financial activities. The cost of accounting services can vary considerably depending on the size of the business and the specifics of the activity, starting at around 200 euros per month for small businesses.
- Audit: For large companies or those that fulfil certain criteria in terms of assets and revenues, an annual audit is required. The cost of an audit starts at several thousand euros.
- legal services
- Consultation and representation: Regular legal advice helps to ensure that the company complies with Hungarian law. The annual cost of legal services can start from a few hundred to thousands of euros depending on the complexity of the legal issues.
- office rent and operating expenses
- Rent: The cost of renting commercial property in Hungary varies depending on the location and size of the premises. In Budapest, office rental costs can start from €10 per square metre per month.
- Utility charges: Utility costs also depend on the size of the office and may include electricity, water, internet and other services.
- State fees and licences
- Annual registration fees: Depending on the type of business the company is engaged in, certain licences and permits may be required, which require an annual fee.
- Social security contributions: The Company is obliged to pay contributions for each employee, which also increases annual operating expenses.
What are the main advantages of setting up a company in Hungary?
Hungary is becoming an increasingly popular destination for international business due to its strategic position in Europe, flexible economic policy and a number of incentives for foreign investors.
- Strategic geographical location
Hungary is located in the centre of Europe, which provides convenient access to the major markets of the European Union. Thanks to its well-developed transport infrastructure, companies can easily trade with Eastern, Western and Southern European countries.
- Low taxes
One of the most attractive aspects of doing business in Hungary is one of the lowest corporate tax rates in Europe – only 9%. In addition, there are various tax breaks and incentives for start-ups and investment projects, which makes doing business here even more favourable.
- Ease of business registration
The process of registering a company in Hungary is relatively simple and does not require a lot of time or bureaucratic effort. This makes the country attractive for foreign entrepreneurs who want to start their business quickly.
- Skilled labour force
Hungary offers a highly skilled labour force, especially in fields such as engineering, technology and medicine. The level of education in the country is high and labour costs remain relatively low compared to other EU countries.
- Attractive investment policy
The Hungarian government actively supports foreign investment through a number of programmes and initiatives aimed at improving the business climate. Companies can take advantage of grants, state support and specialised economic zones with special tax conditions.
- Developed infrastructure
The country has a well-developed infrastructure, including modern roads, strong communications and reliable energy sources. This provides convenient conditions for logistics and the day-to-day operations of companies.
What are the ways to set up a company in Hungary?
Establishing a company in Hungary is a process that can vary depending on the type of business, the legal form chosen and the specific goals of the entrepreneur. Effective planning and understanding of all available options are key factors for the successful incorporation and subsequent operation of the company.
- Choice of the form of a legal entity
The first step in the company formation process is to choose the appropriate form of legal entity. In Hungary, the most common forms are:
- Limited Liability Company (Kft.) – suitable for small and medium-sized enterprises with limited liability of the founders.
- Joint Stock Company (Zrt. or Nyrt.) – used for large operations and allows you to attract investment through the sale of shares.
- A sole proprietor (Egyéni vállalkozó) is an ideal option for a single owner who wishes to run a business without creating a legal entity.
- Preparation of necessary documents
Registering a company in Hungary requires the preparation and filing of a number of documents including:
- The Articles of Association and Memorandum of Association are the official documents describing the structure and rules of the company.
- Directors’ and Founders’ Data – personal details of the managing directors and owners.
- Certificate of authorised capital – confirmation that the necessary funds have been deposited in the company’s account.
- Registration with state authorities
Once all documents have been prepared, it is necessary to register the company with the relevant state authorities:
- Trade Register – to officially register the company and obtain legal personality.
- Tax Service – to obtain a tax number and register as a taxpayer.
- opening a bank account
In order to conduct financial transactions, it is necessary to open a bank account with a Hungarian bank. This requirement applies to all companies registered in Hungary.
- Obtaining necessary licences and permits
Depending on the company’s line of business, special licences or permits may be required. This process may include verification of compliance with safety, health and environmental standards.
Is it necessary to have a legal address in Hungary?
The registered office of a company plays a key role in its legitimisation and functioning under Hungarian law. This address is used as the official seat of the company, where all legally relevant documents and public notices are sent.
Legal aspects
Under Hungarian corporate law, every company incorporated in the country is required to have a registered office in Hungary. This address is included in the official Commercial Register and is used for all official purposes, including:
- Registration of the company in the commercial register;
- Correspondence with tax authorities and other government agencies;
- Receive legally important notices and official documents.
Practical significance
A legal address not only fulfils legal requirements, but also serves as an important element of corporate image. It can be used for:
- Establishing trust with customers and partners;
- Registration at the local level to access municipal grants and subsidies;
- Organising legally significant meetings and shareholder meetings.
How to get a legal address
There are several ways to ensure that you have a legal address for your company in Hungary:
- Renting an office or commercial space. This is the most traditional way, which also helps to increase the visibility of the company.
- Utilising virtual office services. For companies that do not need a permanent physical presence, a virtual office can be a cost-effective solution, allowing them to have a legal address without incurring significant rental costs.
- Legal address through a law or consulting firm. Some law and consulting firms offer legal address services as part of a comprehensive business service.
Is it possible to open a branch of a foreign company in Hungary?
Hungary offers attractive opportunities for foreign companies interested in expanding their business into the European market. One way to enter the Hungarian market is to open a branch office of a foreign company.
Legal framework
A branch of a foreign company in Hungary is regarded as an integral part of the parent company without legal personality. This means that the parent company is fully responsible for all operations and obligations arising from the activities of its branch.
Registration process
- Preparation of documentation: In order to register a branch office, a set of documents must be prepared and submitted, including:
- Articles of Association of a foreign company;
- Decision on the establishment of a branch;
- Extract from the commercial register of the parent company, confirming its legal registration in the country of origin;
- Power of attorney for the branch manager.
- Translation of documents: All documents must be translated into Hungarian by a certified translator.
- Registration with the Hungarian Commercial Register: The branch office must be registered with the Hungarian Commercial Register. This includes submitting all necessary documents and paying the registration fee.
Taxation
A branch of a foreign company is taxed on profits earned in Hungary at the rate set for all corporate entities – 9%. It is also necessary to file regular tax returns in accordance with Hungarian tax legislation.
Banking and finance operations
In order to conduct financial transactions, a branch office is required to open an account with a Hungarian bank. This simplifies transactions with taxes, payroll and other day-to-day financial matters.
Advantages and disadvantages
Benefits:
- Increase brand awareness and expand business into new markets;
- Direct control of the subsidiary’s operations by the parent company;
- Ability to utilise local benefits and subsidies provided by the Hungarian government.
Disadvantages:
- Full financial and legal responsibility of the parent company for the actions of the affiliate;
- Difficulties associated with managing a branch at a significant geographical distance.
Can a foreigner open a company in Hungary?
Hungary offers great opportunities for foreign investors interested in setting up business in its territory. The country attracts with its favourable investment climate, strategic location in Europe and relatively low taxes. This article discusses the main aspects that foreigners need to consider when starting a company in Hungary.
Legal aspects
Foreign nationals can establish and own companies in Hungary on an equal footing with locals without any additional restrictions. There are several forms of business that foreign investors can choose from:
- Limited Liability Company (Kft.) is the most popular form for small and medium-sized enterprises.
- Joint Stock Company (Zrt. or Nyrt.) – suitable for large businesses with the possibility of issuing shares.
- A sole proprietorship is a simple form for a single owner, requiring minimal administrative effort.
Company registration procedure
- Selection of the company name and checking its uniqueness in the Hungarian commercial register.
- Preparation of constituent documents such as articles of association and memorandum of association, which must be notarised.
- Registration in the commercial register through a solicitor or registration agent.
- Opening a bank account and depositing authorised capital.
- Registration with the tax office to obtain a tax and VAT number if necessary.
Tax aspects
Foreign companies incorporated in Hungary are subject to general taxation. The main taxes include:
- Corporation tax – the rate is 9%, which is one of the lowest in Europe.
- VAT – the standard rate is 27%, but exemptions are available for certain goods and services.
Requirements for foreign investors
Although foreign nationals are free to start and own companies in Hungary, there are certain requirements:
- Having a registered office in Hungary.
- Compliance with local legislation in terms of accounting and reporting.
- The company can be managed either personally or through appointed directors.
Is it possible to obtain a residence permit when establishing a company in Hungary?
Hungary offers many opportunities for foreign investors, including the possibility of obtaining a residence permit when starting a business. This process can be an attractive option for entrepreneurs seeking not only to expand their business but also to improve their quality of life.
Legal framework for entrepreneurs
Hungarian law provides the possibility for foreign entrepreneurs to obtain a residence permit in the country if they establish or buy a business. This allows not only to run the business locally, but also to enjoy the benefits of permanent residence in the EU.
Basic requirements
- Establishing or acquiring a company in Hungary: The foreigner must prove that the company contributes to the country’s economy by creating jobs, investing in the local economy or participating in significant projects.
- Financial security: When applying for a residence permit, the investor must provide proof of financial stability and the ability to support himself and his family in Hungary.
- Having a business plan: An important element is to have a clear and realistic business plan that demonstrates the potential profitability and long-term prospects for the business.
- Company registration and tax obligations: The company must be officially registered in Hungary and comply with all tax and other regulatory requirements.
The process of obtaining a residence permit
- Filing of documents: Applying at a Hungarian consulate or directly to the Hungarian immigration authorities.
- Assessment of the business plan and financial situation: The authorities carefully analyse the submitted documents and business plan to ensure that they are in line with the economic interests of the country.
- Interview: Generally, the process may include an interview to clarify the details of the business plan and the applicant’s intentions.
- Decision on the application: After checking all documents and conducting an interview, a decision on the granting of a residence permit is taken.
Advantages of obtaining a residence permit through a business
- Mobility within the Schengen area: A residence permit allows you to move and reside freely in any of the Schengen countries.
- Possibility of family inclusion: Family members can be included in the process, which entitles them to live, study and work in Hungary.
- Long-term perspective: The residence permit can be a step towards obtaining a permanent residence permit and subsequently Hungarian citizenship.
What is stipulated in the articles of association of a company registered in Hungary?
The company’s constitutional documents play a key role in the organisation and management of the business, being the basis for the internal structure and operations of the company. In Hungary, as in many other countries, the articles of association contain all the basic provisions on the functioning of the company and its structure.
Main elements of statutory documents
- Name and legal address of the company
- The articles of association must contain the full official name of the company and the address of its legal registration in Hungary.
- Purpose of the company’s activity
- The objectives that the company intends to achieve should be clearly described in the articles of association. This includes the types of activities the company will engage in.
- Types of shares to be issued and capital
- For joint-stock companies, the types of shares (ordinary, preferred), their nominal value and number are specified. The amount of the company’s authorised capital is also specified.
- Management structure
- A description of the organisational structure of the company, including the names and powers of the executive bodies (e.g. the board of directors) and the procedure for their election and appointment.
- Rights and obligations of shareholders
- A detailed description of the rights and obligations of shareholders, including their right to participate in the management of the company, the right to dividends and the right to information.
- Procedure for convening shareholders’ meetings
- Guidelines on how and when shareholder meetings should be held, including annual and extraordinary meetings.
- Rules for amending and supplementing the statutes
- The procedure to be followed for amending the statutory documents.
- Liquidation and reorganisation of the company
- Conditions and procedure for liquidation or reorganisation of the company.
Importance of statutory documents
Statutory documents not only define the legal aspects of a company’s functioning, but also serve as an important tool for protecting the rights and interests of shareholders and managers. They are a legally binding document that must be strictly adhered to by all parties involved in the company’s activities.
How long does it take to set up a company in Hungary?
Establishing a company in Hungary is a process that can vary in time depending on a number of factors, including the type of company, the completeness and accuracy of the documents provided, and the efficiency of government services.
Stages of company registration
- Selection of the company name and its verification
- The first step is to choose a unique name for your company and check its availability through the Hungarian Trade Register. This process usually takes 1 to 3 days.
- Preparation and certification of constituent documents
- Constituent documents such as the company’s articles of association and memorandum of association must be prepared. The documents must be notarised. This procedure may take from a few days to a week.
- Opening a bank account and depositing authorised capital
- To incorporate a company, a corporate bank account must be opened and the authorised capital deposited into it. The time required to open an account can vary from a few days to a few weeks, depending on the bank and the completeness of the documents provided.
- Registration in the commercial register
- Once all documents are prepared, they are submitted to the Hungarian Trade Register for the official registration of the company. The processing of the application usually takes 1 to 2 weeks.
- Registration with the tax authorities
- The last step is to register the company with the Hungarian tax office to obtain a tax number. This process usually takes up to 1 week.
General timelines
On average, the process of incorporating a company in Hungary can take between 4 and 6 weeks from the time you start preparing your documents to the time you receive all the necessary registrations and authorisations. It is important to note that any delays in the submission of documents or their improper preparation may increase the overall registration time.
What kind of activities can a company engage in in Hungary?
Hungary offers a favourable environment for a variety of businesses due to its strategic location in the centre of Europe, liberal economic policies and well-developed infrastructure. The country’s various industries and services are open to both local and foreign companies.
Key sectors of the economy
- Production
- Automotive industry: Hungary is one of the largest producers of automotive components and vehicles in Central Europe. Foreign investors such as Audi, Mercedes-Benz and Suzuki have significant production facilities in the country.
- Pharmaceuticals and Biotechnology: Hungary is also known for its achievements in the field of pharmaceuticals and biotechnology, with many companies operating locally and internationally.
- IT and telecommunications
- Hungary has a well-developed IT infrastructure and is actively developing its technology sector, including software, mobile applications and e-commerce. Hungarian startups actively attract foreign investment and receive support from the government.
- Agriculture and food industry
- Agriculture has traditionally been an important industry, with strong positions in the production of cereals, meat, fruit and vegetables. Hungary is also known for its wine producing regions.
- Tourism and hospitality
- Hungary’s tourism sector is booming thanks to its rich cultural heritage, historical sites and thermal waters that attract tourists from all over the world.
Legal aspects of doing business
In order to start operating in any of the above sectors, a company must comply with Hungarian legal requirements, including registering its activities, obtaining the necessary licences and complying with quality and safety standards. It is important to note that some activities may require special permits or licences, especially in the areas of health care, education and financial services.
Does a company in Hungary have to have employees?
One of the key aspects of running a business is having qualified employees who can efficiently carry out day-to-day operations and contribute to the growth of the company. In Hungary, as in other countries, certain business activities may require full-time employees, while others may not.
Legal requirements
Hungarian law does not impose a mandatory requirement to have employees for all forms of business. However, depending on the form of the company and its field of activity, there may be certain regulatory or licence requirements for hiring staff:
- Companies in areas requiring special licensing (e.g. financial, health or education sectors) must prove they have qualified employees to meet licensing standards.
- Manufacturing companies often require a labour force to perform operational tasks.
Management aspects
For small companies or start-ups founded by a single entrepreneur, hiring employees may not be necessary at the initial stage. In such cases, the company may be managed entirely by the owner. However, as the business grows and develops, there may be a need for a specialised workforce to improve operational efficiency and expand market presence.
Economic considerations
The decision to hire employees should take into account the economic benefits and possible costs. Hiring employees entails additional salary, tax and social security costs. It is therefore important to assess whether hiring staff will increase the company’s revenues enough to justify these costs.
Advantages of having employees
Having employees can offer a number of benefits, including:
- Increased productivity and the ability to focus on strategic business development.
- Expanding the company’s competences by attracting specialists in certain areas.
- Flexibility in project management and the ability to serve more clients or expand the range of services.
How to choose a name for a company in Hungary?
Choosing a name for a new company is a key stage in establishing a business that requires careful consideration and strategic planning. A company name not only helps to stand out in the market, but also plays an important role in creating a first impression with potential customers and partners. In Hungary, the name selection process is governed by certain legal requirements that need to be taken into account for a successful company registration.
Legal requirements for company name in Hungary
- Uniqueness and distinctiveness: The name must be unique and must not be the same or similar to already registered company names in the Hungarian Commercial Register. This prevents confusion and protects brands from possible legal disputes.
- No restrictions: The name should not contain words that could be misleading as to the company’s business or legal form. For example, the use of the word “bank” is restricted to licensed financial institutions.
- Language aspects: The name can be registered in Hungarian or any other language using the Latin alphabet. It is important that the name is written correctly and complies with the grammatical and orthographic rules of the chosen language.
How to choose the right name for your company
- Market Research: Understanding your target audience and market niche will help you choose a name that speaks to potential customers about your business, its values and the products or services you offer.
- Creativity and memorability: Choose a name that is easy to remember, easy to pronounce and stands out from the competition. A creative name can be a powerful marketing tool.
- Checking the availability of the name: Before the final selection, it is necessary to check the availability of the name in the Hungarian Trade Register to make sure that it is not used by another company.
- International aspects: If you plan to do business not only in Hungary, make sure that the name is acceptable and does not have negative connotations in other languages.
- Future Scalability: Choose a name that fits your business’s long-term growth strategy and won’t limit future growth.
Conclusion
Choosing a company name in Hungary requires a strategic approach and consideration of both marketing and legal aspects. A properly chosen name contributes to the formation of a strong brand and can significantly increase the company’s recognisability in the market. Therefore, it is important to give this stage due attention and, if necessary, to consult with lawyers and marketing experts to achieve the best possible result.
FREQUENTLY ASKED QUESTIONS
What advantages come with the acquisition of a pre-established Hungarian company?
Acquiring an existing company in Hungary can offer many strategic advantages for investors and entrepreneurs wishing to expand their operations or enter the Hungarian market. This approach avoids many of the initial hurdles associated with establishing a new company.
Advantages of acquiring a ready-made company
- Quick access to the market
- By acquiring an existing company, investors can start operations immediately, bypassing the bureaucratic procedures and delays associated with new company registration. This ensures a quick entry into the market and the ability to start doing business quickly.
- Established business relationships and customer base
- Existing companies already have a developed customer base and established business relationships. This gives new owners a significant advantage, as there is no need to start from scratch in building relationships with customers and partners.
- Experienced staff
- The staff already includes experienced employees familiar with current operations and business processes. This avoids problems with hiring and training new employees and contributes to business continuity.
- Financial history
- An established company has a financial history that can be analysed to assess its past performance and potential profitability. This provides valuable data for making informed investment decisions.
- Regulatory and licence benefits
- If the business already has all the necessary licences and permits to operate, new owners will not have to go through the lengthy process of obtaining them, which is especially important in regulated industries.
Risks and considerations
Acquiring an existing company also involves certain risks. It is important to scrutinise the company's legal cleanliness, debts and liabilities. A comprehensive due diligence should be conducted, including a financial, legal and tax audit of the company.
Conclusion
Acquiring an established company in Hungary can be a favourable solution for many businessmen and investors. This approach allows for a quick start-up, avoiding many of the initial difficulties and costs associated with starting a new business. However, in order to minimise the risks, it is necessary to conduct thorough preliminary research and possibly engage professional advisors specialising in corporate acquisitions and mergers.
Is Hungary an ideal location for company registration?
Hungary attracts many foreign investors due to its strategic location in the centre of Europe, stable economy and attractive tax policy. However, before deciding to register a company in Hungary, it is important to thoroughly research all aspects of doing business in this country.
Advantages of registering a company in Hungary
- Low corporate tax rate
- With a corporate tax rate of 9%, Hungary offers one of the lowest rates in Europe, making it attractive to international businesses.
- Strategic geographical location
- Located in the centre of Europe, Hungary provides easy access to European Union markets as well as to Eastern European countries.
- Business flexibility
- Hungary offers a flexible corporate structure and minimal barriers to doing business, making it easy to set up and run a company.
- Developed economic infrastructure
- The country has a well-developed infrastructure, including modern transport networks, telecommunications and technological innovation.
- Programmes to support foreign investors
- The Hungarian government offers various incentives and support programmes for foreign investors, including grants and incentives for job creation and investment in certain sectors.
Potential difficulties
- Bureaucracy and administrative procedures
- Despite government efforts to simplify the company registration process, bureaucracy can still be an obstacle, especially for those unfamiliar with local legislative and administrative procedures.
- Language barrier
- Hungarian is considered one of the most complex European languages, which can make it difficult for foreigners who do not speak the language well enough to do business.
- Economic fluctuations
- Like any other country, Hungary is subject to economic fluctuations that can affect the stability and profitability of a business.
Conclusion
Hungary offers a number of significant advantages to foreign investors, including low taxes, strategic location and government support. However, as with any international business venture, it is important to carefully assess all potential risks and benefits. Understanding local legislative and cultural sensitivities can play a key role in the success of your business in Hungary. Consultation with local specialists and lawyers is recommended to ensure a smooth and successful start to your operations in this country.
Are there specific benefits associated with choosing a pre-established company in Hungary rather than starting one entirely anew?
The choice between buying an existing company or starting a new one from scratch is an important decision for many foreign investors planning to do business in Hungary. Each of these approaches has its advantages and disadvantages, but the acquisition of an existing company can offer a number of significant benefits, especially in the context of Hungary's economic environment.
Advantages of acquiring an operating company
- Fast market entry
- One of the most significant advantages of buying an existing company is the ability to start operations immediately. Unlike a new company, which takes time to incorporate and set up operations, buying an existing company avoids many of the initial administrative and organisational delays.
- Availability of licences and permits
- Many businesses in Hungary require special licences or permits, which can be time-consuming to obtain. Acquiring a company that already has the necessary licences greatly simplifies the process and eliminates the need to go through complicated bureaucratic procedures.
- Established business relationships and reputation
- An existing company already has its business connections, customer base and possibly a good reputation. This creates favourable conditions for the continuation of business activities and simplifies the process of attracting new customers.
- Experienced staff
- Company personnel who are already familiar with the details of the business and its current market position can be a significant asset. New owners will not have to spend time and resources on recruiting and training new employees.
- Financial predictability
- Acquiring an existing company allows the new owner to assess the financial health of the business based on previous financial statements. This provides greater predictability and reduces financial risk.
Key considerations
Acquiring a going concern also requires a thorough due diligence process, including analysing the legal cleanliness, financial condition and market position of the company. It is important to ensure that the company has no hidden debts or legal problems that could affect the business in the future.
Is it possible for individuals who are not residents to register a company in Hungary?
Hungary attracts foreign investors with its favourable investment climate, favourable tax regime and strategic location in the heart of Europe. One of the key features of Hungarian legislation is the possibility for non-residents to register a company in the country.
Legal aspects
Hungarian law allows foreign nationals and companies to register and own a business in Hungary without having to reside in the country. However, although there are no residency requirements for founders, the company must have a legal address in Hungary. This can be a company office or a legal address provided through a virtual office service.
Company registration process
- Choice of company type: The most popular forms of legal entities for foreign investors in Hungary are limited liability company (Kft.) and joint stock company (Zrt.).
- Preparation of documents: For registration, it is necessary to prepare the company's articles of association and memorandum of association, which must be prepared in Hungarian and notarised.
- Registration fee and capital: A registration fee and authorised capital, the amount of which depends on the type of company, must be paid.
- Obtaining a registered office: The company must have a registered office in Hungary, which will be used for official correspondence.
- Registration in the commercial register: Once all documents have been prepared, it is necessary to submit them to the Hungarian Trade Register for registration.
- Opening a bank account: After incorporation of the company, you need to open a corporate bank account in one of the Hungarian banks.
Tax and legal obligations
Once a company is incorporated, it must comply with Hungarian law, including paying taxes and filing financial statements. The corporate tax rate in Hungary is 9%, making it one of the most attractive countries in Europe in terms of taxation.
Conclusion
Registering a company in Hungary by non-residents is a relatively simple and affordable process that opens up a wide range of business opportunities in Europe. With the right approach and compliance with all legal requirements, foreign investors can successfully develop their activities in the Hungarian market, taking advantage of its economic and strategic advantages.
Do Hungaryn companies have the flexibility to alter their names both before and after re-registration?
Choosing a name for a company is an important step in the process of its creation and further identification on the market. The Hungarian legislation provides companies with the possibility to change their name both at the registration stage and afterwards.
Legal aspects of changing the name of a company
In Hungary, the process of changing a company name is regulated by the Commercial Code and other regulations. Changing the name requires compliance with certain procedures that guarantee legal transparency and prevent abuse.
- Prior to incorporation of the company:
- Changing the name of a company during the registration process is relatively simple. The entrepreneur can change the name before the documents are finally filed with the registration authority. This can be done in response to a refusal by the registration authority if the proposed name is already occupied or does not meet the legal requirements.
- After company incorporation:
- Once the company is incorporated, any change of name requires a formal procedure, including approval of the change at a shareholders' or founders' meeting. The resolution must be registered in the commercial register and the relevant documents must be filed with the registration authority.
- The company should notify all stakeholders, including counterparties, banks and tax authorities, of the name change.
Name change procedure
- Calling a meeting of the founders or shareholders:
- A formal meeting must be held at which a majority vote is taken to change the name.
- Submission of documents to the registration authority:
- Once the decision has been made, the company must file the amended articles of incorporation with the Commercial Register. This includes the new name and confirmation of the legality of the changes.
- Stakeholder Notification:
- The company should notify all of its partners and customers of the name change to ensure that commercial and legal relationships are uninterrupted.
Conclusion
Changing the name of a company in Hungary is a permissible and regulated process both during and after the incorporation stage. Although it may take time and effort to complete all formalities, the flexibility to change the name allows the company to adapt to new market conditions, strategic changes or corporate restructurings. Properly following the procedures provides legal clarity and maintains trust and stability with business partners and authorities.
Do any ready-made companies in Hungary come with an active bank account?
The purchase of a shelf company in Hungary can be an effective solution for foreign investors looking to quickly start a business in Hungary. One of the most important aspects to consider when buying a shelf company is to have an active bank account.
Ready-made companies: what are they?
Ready-made companies are pre-registered legal entities that have not conducted commercial activities and are intended for subsequent sale to investors. These companies have all the necessary documents, memorandum of association and are registered in the Hungarian Commercial Register. The main advantage of ready-made companies is the possibility to start operations quickly without having to go through a lengthy registration process.
Availability of a bank account
One of the key issues when buying a ready-made company is the availability of an active bank account. In most cases, ready-made companies in Hungary do not have an active bank account for the following reasons:
- Banking procedures and security:
- Opening a bank account requires following strict procedures and verifying the identity of the ultimate beneficiary (KYC - Know Your Customer). Banks want to be assured of the legitimacy and transparency of their customers and therefore favour the opening of an account by a new owner after the acquisition of a company.
- Avoiding potential risks:
- Active bank accounts may be associated with potential financial and legal risks associated with possible undeclared liabilities or transactions committed by previous owners.
The process of opening a bank account after the purchase
After acquiring a ready-made company in Hungary, the new owner must open a bank account. This process involves several steps:
- Document preparation:
- Submission of all necessary documents such as the company's articles of association, incorporation documents, passport details of the new owner and proof of address.
- Submitting an application to the bank:
- Personal presence of the owner or his official representative at the bank to sign the documents and undergo KYC procedure.
- Passing the bank's inspection:
- The bank will verify all the information and documents provided. This process may take from a few days to a few weeks depending on the policy of the particular bank.
Conclusion
Purchasing a ready-made company in Hungary offers a number of advantages, including a quick business start-up and the ability to avoid lengthy incorporation procedures. However, such companies are not usually accompanied by active bank accounts due to strict bank control procedures and potential risks. Opening a bank account after the purchase of a company is standard practice, requiring compliance with all banking procedures and checks. This ensures the security and transparency of the financial transactions of the new owner of the company.
Can the company open a bank account in Hungary remotely?
In today's environment of globalisation and digitalisation, opening a bank account remotely is becoming increasingly important for international companies. Hungary, as part of the European Union, attracts many foreign investors due to its favourable business environment.
Legal and regulatory requirements
Hungarian banks, like banks in most EU countries, are required to follow strict procedures to verify their customers under the Know Your Customer (KYC) and anti-money laundering (AML) policies. These procedures include confirming the identity of the ultimate beneficiary and verifying sources of income.
Procedure for opening a bank account
- Choice of bank:
- Different banks may offer different terms and procedures for opening accounts. It is important to choose a bank that offers remote account opening services and meets your company's needs.
- Document preparation:
- The standard set of documents for opening a corporate account includes:
- Constituent documents of the company.
- Resolution appointing a director and powers of attorney.
- Passport details and proof of residence address of all final beneficiaries.
- A business plan or description of the company's operations.
- Confirmation of the company's registered office in Hungary.
- The standard set of documents for opening a corporate account includes:
- Submission:
- The application to open an account can be made through the bank's electronic systems or with the help of specialised intermediaries and consulting firms that can assist in the preparation and submission of documents.
- Undergoing KYC procedure:
- Banks may require video conferencing or other means of remote identification to confirm the identity of the ultimate beneficiary. Some banks may also require notarised copies of documents.
- Verification and Approval:
- Once all the required documents have been submitted and the KYC procedure has been completed, the bank will conduct a verification process. This process can take from a few days to a few weeks depending on the bank's internal policies and the completeness of the information provided.
Advantages of opening a bank account remotely
- Saving time and resources:
- Opening an account remotely avoids the need to travel to Hungary, which saves time and money, especially with the current restrictions on international travel.
- Convenience and responsiveness:
- The ability to file and negotiate online makes the process more convenient and faster.
Limitations and potential difficulties
- Strict requirements of the banks:
- Due to high security and regulatory compliance requirements, banks may refuse remote account opening if there is insufficient information or suspicion of business transparency.
- The need to involve intermediaries:
- In some cases, the company may require the services of local legal or consulting firms to successfully complete all procedures, which may increase the cost of the process.
Conclusion
Opening a bank account in Hungary remotely for a company is possible, but requires careful preparation and compliance with all regulatory requirements. It is a convenient and efficient way to start a business in Hungary, minimising the need for physical presence and associated costs. It is recommended to utilise the services of Regulated United Europe to ensure compliance and successful account opening.
Do any ready-made Hungaryn companies off the shelf come with existing liabilities or debts?
The purchase of a shelf company in Hungary can be an attractive opportunity to start a business quickly. However, one of the important aspects to consider when buying a shelf company is the existence of possible liabilities or debts.
What is a ready-made company?
A ready-made company is a legal entity that has been registered and has been in existence for some time, but is not actively engaged in commercial activities. Such companies are created for subsequent sale to investors who wish to avoid the lengthy registration process and start a business immediately.
Possible risks of acquiring a ready-made company
- Existing liabilities and debts:
- One of the main risks in buying a ready-made company is the possibility that it may have existing liabilities or debts. These liabilities may include unpaid loans, tax arrears, fines or obligations to suppliers.
- Legal disputes:
- The Company may be involved in current or potential legal proceedings, which may affect its financial and legal position.
- Legislative violations:
- Previous owners of the company may have violated legal or regulatory rules, which could result in fines or other penalties.
Precautions when buying a ready-made company
- Due Diligence:
- Before purchasing a ready-made company, it is necessary to conduct a comprehensive financial and legal due diligence. This includes analysing accounting records, tax returns, credit history and checking for litigation.
- Professional help:
- It is advisable to engage professionals such as lawyers and auditors who can conduct a detailed audit of the company and identify possible risks. Their expert knowledge will help minimise risks and guarantee the cleanliness of the transaction.
- Contract Warranties:
- Include in the sales contract warranties from the seller that the company has no hidden liabilities or debts. If such liabilities are discovered after the purchase, the seller should be held liable.
Advantages of buying a ready-made company
- Quick Start Business:
- Buying a ready-made company allows you to avoid the lengthy registration process and start commercial activities immediately.
- Established Reputation:
- A ready-made company may have an established reputation and credit history, which can make it easier to obtain loans and establish business relationships.
- Availability of licences and permits:
- If the company already has the necessary licences and permits, it avoids additional costs and time to obtain them.
Conclusion
Buying a ready-made company in Hungary can offer significant advantages, including a quick start and the ability to avoid administrative delays.
What are the corporate tax rates in Hungary?
Corporate taxation plays a key role in choosing a jurisdiction for doing business. Hungary, as a member of the European Union, offers attractive conditions for foreign investors, including one of the lowest corporate tax rates in Europe.
The main corporate tax rate is as follows
Hungary is known for its favourable tax policy. The main corporate tax rate is only 9%. This is one of the lowest rates in the European Union, which makes Hungary attractive for international business and investment. The low tax rate favours companies' profits and stimulates the development of economic activity.
Other tax liabilities
In addition to the basic corporate tax rate, companies in Hungary may face other tax liabilities:
- Value Added Tax (VAT):
- The standard VAT rate in Hungary is 27%, which is one of the highest rates in Europe. However, reduced rates of 5% and 18% may apply for certain goods and services.
- Local Taxes:
- Companies are also liable to pay local taxes such as business activity tax, which can be up to 2% of gross income. This tax varies depending on the location of the company and local tax policy.
- Social contributions and insurance:
- Employers are obliged to pay social security contributions on behalf of their employees. These contributions include contributions for pension insurance, health insurance and industrial accident insurance. The total amount of contributions can reach 22% of the payroll.
Benefits and incentives
The Hungarian government provides various tax exemptions and incentives to support certain industries and activities. These include:
- Investment incentives:
- Tax incentives and grants may be available for large investments, especially in technology and research.
- Incentives for small and medium-sized enterprises (SMEs):
- SMEs can receive incentives to support their growth and development, including simplified tax regimes and subsidies.
- Regional Benefits:
- In some regions of Hungary, additional tax incentives and subsidies may be granted in order to stimulate economic development.
Conclusion
Hungary offers one of the lowest corporate tax rates in Europe, making it an attractive jurisdiction for registering and doing business. The basic rate of 9% creates favourable conditions for companies to increase their profits. At the same time, companies must consider additional tax liabilities such as VAT, local taxes and social contributions. A proper understanding of Hungary's tax system and utilisation of available benefits and incentives can significantly improve financial results and contribute to long-term business success.
Is it mandatory to manage accounting for a company registered in Hungary?
Bookkeeping is an integral part of the management of any company, regardless of its size and field of activity. In Hungary, as in most countries of the world, legislation requires companies to comply with strict accounting and reporting rules.
Legal requirements
- Statutory accounting:
- Under Hungarian law, all companies incorporated in Hungary are required to maintain accounting records in accordance with national accounting standards. This includes recording all financial transactions, preparing financial statements and submitting them to the tax authorities.
- International Financial Reporting Standards (IFRS):
- Large companies and companies listed on a stock exchange may also be required to maintain accounting under International Financial Reporting Standards (IFRS), which ensures transparency and comparability of financial data internationally.
Basic elements of accounting
- Financial Reporting:
- Companies are required to prepare and present annual financial statements that include a balance sheet, an income statement, a statement of cash flows and notes to the financial statements. These documents should reflect the exact financial position of the company and the results of its operations.
- Tax reporting:
- Companies are required to file tax returns and pay taxes such as corporate tax, VAT, local taxes and social contributions in a timely manner. Tax reporting must be accurate and comply with the requirements of tax legislation.
- Maintaining the books of account:
- All financial transactions of a company must be documented and recorded in the books of account. This includes recording income and expenses, recording fixed assets and depreciation, and recording liabilities and receivables.
Responsibility for record-keeping
- Appointment of Chief Accountant:
- Companies may appoint a chief accountant or contract with an accounting firm to ensure that all accounting requirements are met. The chief accountant is responsible for the accuracy and completeness of the accounting records.
- Audit:
- Large companies and companies in certain categories are required to have their financial statements audited annually. The audit is conducted by an independent auditor and is aimed at confirming the reliability of the financial statements.
Consequences of non-compliance
Non-compliance with accounting requirements can lead to serious consequences, including fines, legal sanctions and loss of reputation. Companies that fail to submit timely and accurate reports may face tax audits and administrative actions by government authorities.
Conclusion
Maintaining accounting records is a mandatory requirement for all companies registered in Hungary. This ensures transparency of financial activities, compliance with tax obligations and increases the confidence of partners and investors. Companies must carefully comply with all accounting rules and standards to avoid legal and financial risks associated with non-compliance with legal requirements.
Can a Chinese citizen open a company in Hungary?
Hungary, due to its strategic location in the centre of Europe, attractive tax rates and supportive business environment, has become a popular destination for foreign investment. Chinese citizens, as well as citizens of other countries, can take advantage of these advantages and register a company in Hungary.
Legal aspects and basic requirements
- The right to incorporate a company:
- Hungarian law does not impose restrictions on foreign nationals, including Chinese nationals, to register and own a company in Hungary. Chinese citizens can register a company under the same conditions as Hungarian citizens.
- Forms of Legal Entities:
- Chinese citizens can choose among various forms of legal entities, the most popular of which are the limited liability company (Kft.) and joint stock company (Zrt.). These forms provide flexibility in management and limited liability for the founders.
- Legal address:
- Every company registered in Hungary must have a registered office in Hungary. This can be a company office or a virtual office provided by specialised providers.
Company registration process
- Document preparation:
- The following documents are required: memorandum of association, articles of association, personal details of the founders and directors, and proof of the company's registered office. All documents must be translated into Hungarian and notarised.
- Registration in the commercial register:
- Documents are filed with the commercial registry through a local solicitor or registration agent. The registration process usually takes one to two weeks.
- Opening a bank account:
- Once the company has been incorporated, a corporate bank account must be opened with a Hungarian bank. This requires the personal presence of the owner or his official representative and the submission of all necessary documents.
Tax and legal obligations
- Corporation tax:
- Hungary offers one of the lowest corporate tax rates in Europe at 9%. This makes the country particularly attractive for international business.
- Value Added Tax (VAT):
- The standard VAT rate in Hungary is 27%, but reduced rates may apply for certain categories of goods and services.
- Financial statements:
- All companies are required to keep accounting records in accordance with Hungarian standards and file annual financial statements.
Advantages of opening a company in Hungary
- Strategic Location:
- Hungary is located in the centre of Europe, which provides convenient access to the markets of the European Union.
- Economic stability and support:
- The Hungarian government actively supports foreign investment and offers various incentives and grants for businesses.
- Skilled labour force:
- Hungary has a highly skilled labour force, especially in technology and engineering.
Conclusion
Chinese citizens can easily open and register a company in Hungary, taking advantage of all the advantages that the country offers for doing business. The company registration process is relatively simple and straightforward, but requires compliance with all legal and tax regulations. Consultation with local lawyers and business advisors can make the process much easier and ensure a successful business start-up in Hungary.
Is it possible to open a branch of a Chinese company in Hungary?
Hungary, located in the centre of Europe, is an attractive location for business expansion due to its favourable tax conditions and access to European Union markets. Opening a branch office of a Chinese company in Hungary allows you to utilise these advantages to strengthen your international presence and increase your profits. This article discusses the basic steps and requirements for opening a branch office of a Chinese company in Hungary.
Legal aspects of opening a branch
- Legal status of the branch:
- A branch of a foreign company in Hungary is not an independent legal entity, but acts on behalf and in the interests of the parent company. All obligations and responsibility for the activities of the branch lie with the parent company.
- Registration in the commercial register:
- In order to open a branch office, it is necessary to register it with the Hungarian commercial register. The registration process includes the preparation and submission of the necessary documents.
Procedure for registration of a branch
- Document preparation:
- The following documents are required to register a branch office:
- The decision of the parent company to establish a branch.
- Founding documents of the parent company, certified and translated into Hungarian.
- Certificate of incorporation of the parent company.
- Articles of Association of the parent company.
- Power of attorney for the person who will represent the interests of the branch in Hungary.
- Confirmation of the legal address of the branch in Hungary.
- The following documents are required to register a branch office:
- Filing of documents with the commercial register:
- Documents are submitted to the Hungarian Trade Register through a local lawyer or registration agent. The review and registration process usually takes one to two weeks.
- Opening a bank account:
- After the branch is registered, it is necessary to open a corporate bank account in one of the Hungarian banks. This will require the personal presence of a representative of the branch and the submission of all necessary documents.
Tax and legal obligations
- Corporation tax:
- Branches of foreign companies are taxed on profits earned in Hungary at the rate of 9%.
- Value Added Tax (VAT):
- Branches are obliged to register as VAT payers and pay VAT on a general basis.
- Financial statements:
- Branches are obliged to keep accounting records and submit financial statements in accordance with Hungarian accounting standards.
Advantages of opening a branch in Hungary
- Access to EU markets:
- Opening a branch in Hungary provides access to European Union markets and the possibility of free movement of goods and services.
- Low tax rates:
- Hungary offers one of the lowest corporate tax rates in Europe, which favours profits.
- Stable economic environment:
- Hungary provides a stable economic and political environment, which makes it attractive to foreign investors.
Conclusion
Opening a branch office of a Chinese company in Hungary is a strategically advantageous solution to take full advantage of the European market and favourable tax conditions. The process of registering a branch office is relatively simple, but requires compliance with all legal and tax regulations. Consultation with local legal and business advisors will help to successfully complete all stages of registration and start efficient business operations in Hungary.
Can a Chinese citizen obtain a residence permit in Hungary?
Hungary offers a wide range of opportunities for foreign investors and entrepreneurs seeking residence permits. Chinese nationals can take advantage of these opportunities to not only do business but also to reside in the country. This article discusses the main ways for Chinese nationals to obtain a residence permit in Hungary, as well as the requirements and procedures involved in the process.
Main ways of obtaining a residence permit
- Investing in the Hungarian economy:
- One of the most popular ways to obtain a residence permit is to invest in the country's economy. Hungary offers programmes such as the Golden Visa, which allows you to obtain a residence permit if certain investment conditions are met.
- Company Establishment:
- Chinese citizens can obtain a residence permit by opening a company in Hungary. This process involves registering a company, contributing registered capital and proving a business plan that demonstrates a contribution to the country's economy and job creation.
- Working Visa:
- Chinese citizens can obtain a residence permit if they have a job offer from a Hungarian employer. The work visa allows legal residence and work in Hungary for the duration of the contract.
- Training:
- Students from China enrolled in Hungarian educational institutions can obtain a student visa, which entitles them to temporary residence in the country for the duration of their studies.
The process of obtaining a residence permit
- Submission of Application:
- The application for a residence permit is submitted to the Hungarian Consulate in China or to the Hungarian Immigration Service. The application must be supported by the necessary documents, including passport, photographs, documents confirming the purpose of stay (work contract, company documents, proof of enrolment in an educational institution, etc.).
- Document preparation:
- The standard set of documents includes: passport, photographs, proof of financial solvency, health insurance, proof of housing in Hungary and other documents depending on the basis of the residence permit.
- Getting an interview:
- In some cases, it may be necessary to be interviewed by consular or immigration officials to confirm the applicant's intentions.
- Consideration of the application:
- The application process can take anywhere from a few weeks to a few months depending on the individual case and the workload of the immigration authorities.
Advantages of a residence permit in Hungary
- Free movement within the Schengen area:
- A residence permit in Hungary grants the right to travel freely within the Schengen area without the need to obtain additional visas.
- High quality of life:
- Hungary offers a high standard of living, developed infrastructure, quality education and medical care.
- Business and investment opportunities:
- Obtaining a residence permit opens up additional opportunities for doing business and investing in Hungary and other European Union countries.
Conclusion
Chinese citizens have several options for obtaining a residence permit in Hungary, including investing, starting a business, working and studying. Each of these paths requires fulfilment of certain conditions and submission of relevant documents. Consultation with legal and immigration specialists can greatly simplify the process of obtaining a residence permit and increase the chances of a successful application. Hungary offers favourable conditions for foreign nationals, making it an attractive destination for residence and business.
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