Company incorporation in Hungary 2025

Company incorporation in Hungary

Hungary attracts foreign investors with its favorable tax regime and simplified business registration procedure. Within 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 while doing business.

 

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 in the case of Zrt., the necessary authorized capital is at least 20 million forints, which is about 65 thousand euros.

Registration of company

The application is filed with the Court of Registration through an attorney-at-law licensed in Hungary to begin the company registration process. Besides the application, the following are to be filed for registration: memorandum of association, articles of association, details of directors and shareholders, and proof of payment of the share capital.

Tax registration and opening a bank account

After registering your company, you need to enroll at the tax office and get a tax number. After that, you may open a bank account in a Hungarian bank as it is one of the main business preconditions.

Taxation

It provides Hungary with one of the lowest corporate tax rates in Europe, standing at a rate of 9%. In addition to this, there is the possibility to provide VAT exemption for some activities, especially when considering exports. The standard VAT is 27%, but reduced rates can be applied depending on certain goods and services.

PACKAGE «ESTABLISHMENT OF A COMPANY in Hungary»

2,500 EUR
PACKAGE «ESTABLISHMENT OF A COMPANY in Hungary» INCLUDES:
  • 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

on an individual basis
on an individual basis
2,000 EUR
on an individual basis
on an individual basis

Open business in Hungary

Hungary, due to its position in Central Europe, liberal economic policy, and Innovation-friendly environment, is getting increasingly attractive for foreign investors.

Choice of legal form of business

First of all, it is necessary to choose the ownership form of the enterprise. Most commonly, a private limited liability company form is used in the case of small and medium-sized businesses because there are minimal risks for the owner, and no large authorized capital is required. For larger projects, a joint-stock company will do when there is more opportunity to attract investment.

Registration process

Opening a business in this country is possible only after the preparation and filing of documents, based on which it will be registered. For this purpose, you will need:

  • Articles of Association and Memorandum of Association—it is possible to prepare documents with a lawyer’s help right here in Hungary.
  • Information about the directors and founders
  • Confirmation of the address of the legal entity within Hungary
  • Payment of the authorized capital—it is necessary to define the chosen form of ownership

Documents are submitted to the Court of Registration through an attorney. On average, company registration may take 1 to 2 weeks.

Taxation and accounting

One of the keys to business in Hungary is understanding the system of taxation. The corporate tax is 9% and among the lowest in Europe. Equally important is the VAT, whose standard rate is 27%. Records of transactions are to be properly maintained and submitted to the concerned tax authorities well in time.

Opening a bank account and financing

Opening a local bank account is a compulsory step in doing business in Hungary. This can easily be done after the company registration and obtaining a tax number. Also, for foreign investors, several financing options are available, such as bank loans and government grants for innovative and export-oriented projects.

Advantages of opening company in Hungary

During recent years, Hungary has proven to be one of the most sought-after destinations for international business within Europe. With a stable economy and flexible tax system, its strategic geographical location makes it an ideal place to establish a company.

  • Geographical position: Hungary is located at the very center of Europe, with excellent transport links to other European Union countries. The country provides companies quick and easy access to key European markets, thus decreasing logistic complexities and opening wider trade and export opportunities.
  • Tax benefits: The most significant single benefit of carrying on business in Hungary would be a very low and internationally competitive 9% corporate tax burden, among the very lowest anywhere within the European Union. This should therefore be especially desirable for firms eager to minimize the amount of profits they return to local governments in the form of taxes. Apart from that, there are several other tax incentives for investment in a general sense, inclusive of research and development projects.
  • Case of Business Procedures: On the ease of doing business, various world rankings highly place Hungary. The government is committed to administrative and legal simplification related to setting up and operating businesses. It has simplified the process of company registration and established minimal bureaucratic barriers to setting up businesses.
  • Strong support for innovation: Hungary is very supportive of innovation and the development of technology, offering different types of grants for start-ups and R&D projects. The government has invested much in innovation parks and technology incubators, and this provides a very encouraging environment for technology and science undertakings.
  • Access to Qualified Personnel: Hungary provides high education, above all in technical and engineering specialties. Very good universities provide qualified specialists—a very valuable resource for any company. Educated and multilingual staff make the recruitment and training process much easier.

Forms of business in Hungary

The proper selection of the form of business activity, on the one hand, is probably the most important step that a foreign business partner is expected to make when entering the Hungarian market. This issue may determine, inter alia, the rules of taxation, obligations against public authorities, and the range of legal liability. Presently, there are several basic forms in which business activity can be conducted in Hungary; each of them has its characteristics and is appropriate for different business objectives and strategies.

Business Form Description
Individual Entrepreneur (Egyéni vállalkozó) A sole proprietorship is the least regulated and simplest business form, ideal for a single owner. This structure involves full personal responsibility for debts and liabilities accrued during the business. Advantages include minimal registration requirements and simplified taxation.
Partnership (Betéti társaság, BT) A business partnership involves two or more partners who agree to cooperate. In Hungary, a “simple” partnership (BT) means all participants have unlimited liability for the business’s obligations.
Limited Partnership (Közkereseti társaság, KKT) A limited partnership in Hungary consists of limited partners, who contribute investment capital and have liability limited to the amount of their contribution, and general partners, who are fully liable and actively manage the business.
Limited Liability Company (Korlátolt felelősségű társaság, Kft.) This is the most popular form for small and medium-sized businesses. The minimum authorized capital is 3 million Hungarian forints (approx. 10,000 euros). Participants are not personally liable for the company’s obligations, making it an attractive option for many entrepreneurs.
Joint Stock Company (Részvénytársaság, Rt.) A joint-stock company can be either closed (Zrt.) or open (Nyrt.). This structure is suitable for large businesses or companies looking to raise capital through public offerings. The minimum registered capital for a closed joint-stock company is 5 million forints (approx. 16,000 euros).

What types of companies are there in Hungary?

There are several types of entities selected for conducting business in Hungary, each with specific characteristics that have implications for the duties, rights, and tax obligations of founders and managers alike. The following are some of these company types:

Individual entrepreneur (Egyéni vállalkozó)

The simplest and least expensive form of business, suitable for one owner. Sole proprietors are entirely personally responsible for the operation of their business, including any debts or 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 the partners are jointly and severally liable for the commitments of the company unlimited personal liability of each partner.

Limited Partnership (Közkereseti társaság, KKT)

A limited partnership in Hungary is created between two types of partners: active ones who undertake the management of the business and are fully liable, and passive ones whose liability is limited to the amount of capital contributed by them.

Limited Liability Company (Korlátolt felelősségű társaság, Kft.)

This is the most popular type of company for small and medium-sized businesses in Hungary. Kft. enables its owners (founders) to limit their liability to the amount of the contributed share capital. It is ideally suited for those entrepreneurs who would like to minimize their personal financial risks.

Joint Stock Company (Részvénytársaság, Rt.)

Rt. can be closed ones – Zrt or open ones – Nyrt. In the case of a large enterprise, normally a closed joint-stock company exists for a very limited circle of proprietors, but open joint-stock companies may offer shares to the public. Shareholders are liable only in the limit of the value of their share.

What is the amount of authorized capital of a company in Hungary?

The authorized capital is also a necessary element within the incorporation of a company, ensuring the minimum amount of funds that have to be contributed by the founders for establishing any type of venture. In the case of different types of legal entities in Hungary, the requirements around authorized capital are different.

Limited Liability Company (Kft.)

The preferred form of business activity in Hungary is the Kft., a type of limited liability company, especially among small- and medium-sized businesses. The minimum amount of the authorized capital to register a Kft. is 3 million Hungarian forints, which is approximately 10 thousand euros. The capital has to be paid at the moment of incorporation, thus proving financial strength and the gravity of the intentions of the founders.

Joint Stock Company (Zrt. and Nyrt.)

It can be either closed Zrt. or open Nyrt. The minimum authorized capital of the closed joint-stock company Zrt. is 5 million Hungarian forints, which is approximately 16 thousand euros. An open joint-stock company Nyrt., in cases of public trading of shares, needs an authorized capital of at least HUF 20 million, about EUR 65 thousand. These requirements reflect increased risks and the scale of their operations.

Kommandit társaság (Kkt.)

In cases of a limited partnership, the requirement for the statutory capital could be flexible and is determined in the agreement between the partners. As a general rule, however, the amount of minimum capital shall be sufficient to meet the preliminary operational expenses and liability of the business.

Partnership (Bt.)

In a partnership – Bt., the law does not prescribe strict requirements either as to the minimum authorized capital. Nevertheless, the partners have to contribute sufficiently to keep the business running and to cover any operating expenses arising in the course of its activity.

Should a Hungarian company have a local director on board?

Should a Hungarian company have a local director on board?According to Hungarian corporate law, the appointment of a director is a very important part of companies’ governance, which shall be carried out by the foreign company seeking registration in Hungary. To a foreign investor who wants to establish a business in Hungary, a number of questions may be raised in regard to the necessity of a local director on board.

 

Legal requirements

There is no strict Hungarian law requirement that would require a local director to be appointed for the companies incorporated in Hungary. A director can be of any nationality and residence. On the other hand, there are some nuances to be considered referring to the management and administrative processes of the company.

Practical aspects of having a local director

Although Hungarian law does not require the appointment of a local director, there are, in fact, several practical advantages to having a director resident in Hungary:

  1. Communication with local authorities and banks. The local director will be able to communicate more effectively with government agencies, tax authorities and financial institutions, which will simplify administrative issues and improve operational efficiency.
  2. Understanding of the local market and legislation. A director who knows the Hungarian business climate and legal framework can avoid many legal and strategic mistakes.
  3. Representation and legitimacy: the presence of a local manager/director improves partners’ and customers’ trust in the organization and develops a better image on the Hungarian market.

Alternatives to the appointment of a local manager/director

The following options are available to the companies not willing to appoint a local director:

  • Professional director services: There are companies selling professional temporary or permanent directors’ services that can legally perform the role.
  • Overseas management of the company: With modern technology it is possible to manage a company and its affairs by its directors while abroad. However, this needlessly complicates some processes – things like banking and legal affairs.

Government Fees for the Incorporation of an Entity in Hungary

Company registration in Hungary involves government fees, which depend on the legal form of the entity and the complexity of the incorporation process. Understanding these fees enables the entrepreneur to plan their costs and manage their budget effectively when setting up a business.

Main types of fees

  1. Registration of a limited liability company (Kft.)
    • State registration fee: The State registration fee payable upon registration of a Kft. amounts to 50,000 Hungarian forints (approximately 150 euros). In this respect, the cost of making the entry in the commercial register and that related to the publication of company data is considered covered with this payment.
    • Fee applicable for filing documents electronically: If the registration documents are submitted electronically, then there is an extra HUF 5,000 (approx. EUR 15) charged as a fee.
  2. Registration of a joint stock company (Zrt. or Nyrt.)
    • State registration fee: The fee for a closed joint-stock company is 100,000 HUF, which is approximately 300 EUR, and for a public joint-stock company, it is 600,000 HUF, which is approximately 1,800 EUR. This reflects the fact that Nyrt. has much more sophisticated documentation and requirements for the conduct of its incorporation.
  3. Registration of the partnership (Kkt. or Bt.)
    • State registration fee: In the case of a limited partnership (Kkt.) and a partnership with unlimited liability (Bt.), it is 25,000 HUF (approx. 75 EUR).

Additional fees

  • Notarisation costs: In respect of certain documents, such as memorandums of association or amendments to the articles of association, notarization is required. Notarization costs may vary according to the complexity of the documents and to the extent of work to be performed in their notarization.
  • Legal support fees: These are not government fees, but most companies engage law firms to do the preparation and document filing work; they charge more, however.

How Much Does it Cost to Maintain a Company in Hungary on a yearly Basis?

Doing business in Hungary does not only involve costs at the start-up of the firm but also annual recurring costs that are to be taken into consideration to keep the company compliant with legal and fiscal legislation.

Expense Category Details
Tax Liabilities Corporate tax: Hungary’s standard corporate tax rate is one of the lowest in Europe, set at 9%. The tax amount depends on the profitability of the company.
Value Added Tax: The standard VAT rate in Hungary is 27%, though preferential rates may apply to certain goods and services. Companies are required to file periodic VAT returns.
Accounting and Audit Accounting services: All companies in Hungary must report on their economic activities. Costs vary depending on the business size, with small businesses starting at around 200 euros per month.
Audit: Larger companies, or those meeting asset and revenue thresholds, must undergo an annual audit. Audit costs typically range from several thousand euros.
Legal Services Consultation and representation: Regular legal consultation helps ensure compliance with Hungarian law. Legal services can cost anywhere from several hundred to several thousand euros, depending on the complexity of the legal issues.
Office Rent and Operating Expenses Rent: Commercial property rental costs in Hungary vary by location and size. In Budapest, office rental can start from €10 per square meter per month.
Utility charges: Utility costs, including electricity, water, internet, and other services, depend on the size of the office.
State Fees and Licenses Annual registration fees: Companies must pay annual fees for certain licenses and permits, depending on the nature of the business.
Social security contributions: The company is required to pay social security contributions for each employee, which increases annual operating costs.

What are the main advantages of establishing a company in Hungary?

Hungary is fast turning out to be one of the most preferred destinations for international business due to its strategic position in Europe, flexible economic policy, and several incentives for foreign investors.

  • Geographical location – Strategic: Hungary lies at the center of Europe. It provides easy access to the major markets of the European Union. The country has good transport infrastructure through which companies can easily trade with Eastern, Western, and Southern parts of Europe.
  • Low taxes: Some of the most attractive things about doing business in Hungary are the facts that it levies one of the lowest corporate tax rates in Europe, at only 9%, and offers various tax breaks and incentives for start-ups and investment projects; therefore, it is even more favourable to do business here.
  • Facilitations relating to the ease of business registration: Company registration in Hungary is pretty simple and does not require such a great amount of time and bureaucratic work, thus making this country attractive for foreign entrepreneurs who plan to start their business as soon as possible.
  • Professional workforce: Certain industries such as engineering, technology, medicine, or other related sectors have a highly skilled labour force in Hungary. In addition, the general educational level is high, while labour costs are low compared with European Union countries.
  • Attractive investment policy: The Hungarian government is very supportive of foreign investment through multiple programmes and initiatives to enhance the business climate. Enterprises can receive grants, state aid, and specialized economic zones with special tax conditions.
  • Developed infrastructure: Infrastructure in the country is developed, which makes logistics and current activities of enterprises very convenient.

What ways are available for setting up a company in Hungary?

Setting up a company in Hungary is a quite varied process depending on the kind of business, legal form, and particular aims an entrepreneur may hold. The clear planning and understanding of all options will allow successful incorporation followed by further operation of the company.

Step Details
Choice of the Form of a Legal Entity The first step in the company formation process is selecting the appropriate form of legal entity. In Hungary, the most common forms include:
Limited Liability Company (Kft.) – Ideal for small and medium-sized enterprises with limited liability for the founders.
Joint Stock Company (Zrt. or Nyrt.) – Intended for large-scale operations, with the ability to attract investment by selling company shares.
Sole Proprietor (Egyéni vállalkozó) – Ideal for a single owner who does not wish to develop a separate legal entity for business operations.
Preparation of Necessary Documents Establishing a company in Hungary requires preparing and submitting various documents such as:
The Articles of Association and Memorandum of Association – official documents outlining the company’s structure and rules.
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 After preparing the necessary documents, registration with the relevant state authorities is required:
Trade Register – Official registration of the company and its legal status.
Tax Service – Obtain a tax number and register as a taxpayer.
Opening a Bank Account To carry out financial transactions, a company in Hungary must open an account with a Hungarian bank. This is obligatory for all Hungarian companies.
Obtaining Necessary Licences and Permits Depending on the nature of the company’s business, special licences or permits may be required. This process may involve compliance verification with safety, health, and environmental standards.

Is it necessary to have a legal address in Hungary?

The registered office of the company has an important function in its legitimization and functioning process according to Hungarian law. It is considered a basic address, which will also serve as the official seat of the company where all legally relevant documents and public notices would be sent.

Legal aspects

Under Hungarian company law, every firm registered in the country should have a registered office address in Hungary. The address has to be recorded in the public Commercial Register and shall be used for all official purposes, such as:

  • Registering the firm with the commercial register;
  • Contacting tax authorities and other governmental bodies;
  • Receiving legally important notices and official documents.

Practical significance

The legal address is not only an obligation according to the law; it’s also an important component of corporate image, which could serve for:

  • Establishing confidence with customers and partners;
  • Registration at the municipal level to receive municipal grants and subsidies;
  • Holding legally significant meetings and meetings of shareholders.

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 classic method, which also contributes to promoting the company.
  • Using virtual office services. For organizations that do not require a permanently placed physical on-site address, a virtual office can be very budget-friendly, enabling them to have a legal address without significant costs regarding rent.
  • Legal address through a law or consulting firm. Some law and consulting firms offer legal address services within the frame of complex business services.

Is it possible to open a branch office of a foreign company in Hungary?

Hungary is an attractive destination for foreign companies willing to expand their business into the European market as well. For those who want to enter the Hungarian market, establishing a branch office of the foreign company can be the easiest way.

Legal framework

A branch office of a foreign company does not have legal personality in Hungary. It is regarded as an organic part of the parent company, which means the responsibility of the parent company is complete for all actions and liabilities that might occur during the branch office activity.

Registration process

  1. Preparation of documentation: A set of documents must be prepared and submitted for registration of a branch office including:
    • Articles of Association of the foreign company;
    • Resolution on the establishment of the branch;
    • Certificate from the commercial register of the mother company that it is registered in its law;
    • Authorization document of the branch manager.
  2. Translation of documents: All the papers shall be translated by an authorized translator into Hungarian.
  3. 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

To handle the financial transactions, the branch office needs to open an account with a Hungarian bank. It will be easier to deal with taxes, payroll, and other daily financial issues.

Pros and cons

Pros:

  • To enhance brand awareness and enter a new market;
  • To have direct control of the subsidiary’s operation by the parent company;
  • Able to enjoy local benefits and subsidies offered by the Hungarian government.

Cons:

  • Full financial and legal liability of the mother company for the actions of the affiliate;
  • Difficulties associated with managing a branch at a considerable geographical distance.

Is it possible for a foreigner to establish an organization in Hungary?

Hungary opens the biggest perspectives for foreign investors willing to set up their businesses on its territory. The country attracts companies with a favorable investment climate, strategic location in Europe, and relatively low taxes. From this article, you will learn about some key issues that should be taken into account by foreigners who want to establish a business in Hungary.

Legal Aspects

Foreigners can establish and own companies in Hungary, enjoying equal rights with locals and without additional restrictions. The foreign investors can choose the following forms of business:

  • Limited Liability Company (Kft.) – the most popular form for small- and medium-sized enterprises.
  • Joint Stock Company (Zrt. or Nyrt.) – For large businesses. Appropriate, with the opportunity for share issuance.
  • A sole proprietorship is a simple form for a single owner, requiring least possible administrative work.

Registration procedure

  1. Choosing the company name and verifying its uniqueness within the Hungarian commercial register.
  2. Drafting of the articles of association and memorandum of association, which shall be notarised.
  3. Application for registration in the Commercial Register is possible through a solicitor or registration agent.
  4. A Bank account will be opened, and the capital authorized will be deposited.
  5. Registration with the tax office in order to obtain a tax and VAT number if necessary.

Tax aspects

Foreign companies incorporated in Hungary will be subject to general taxation. The main type of taxes are:

Corporation tax – a standard rate of 9%, one of the lowest in Europe.

VAT – the standard rate is 27%, exemptions are available for specific goods and services.

Requirements for foreign investors

While 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 get a residence permit when establishing a company in Hungary?

Hungary offers several opportunities for foreign investors, one of the most advantageous features being the possibility to obtain a residence permit upon business startup. This can be quite attractive to those entrepreneurs who are not only looking for business expansion but also improvement in life’s quality.

Entrepreneur’s legal position

Hungarian law allows foreign businessmen a real opportunity to receive a residence permit in the country when establishing or purchasing an enterprise. That will not only provide the possibility to conduct business locally but also to enjoy all the advantages of permanent residence in the EU.

Basic requirements

  • Establishing a company, acquiring a company in Hungary: The applicant has to prove that the undertaking created value in the country by creating jobs, investing in the local economy, and participating in big projects within the country.
  • 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.
  • Business plan: It should be a well-thought-out and realistic business plan, based on which one could profitably develop and manage the business with good long-term prospects.
  • Company registration and tax obligations: The company should be officially registered in Hungary, observing all tax and other regulatory requirements.

The procedure for obtaining a residence permit

Documents filed with either Hungarian Consulates or directly with the Hungarian immigration authorities.

Assessment of the business plan and the financial situation: all documents submitted, as well as the business plan, are thoroughly analysed by the authorities for their compliance with national economic interests.

Interview: Commonly, the procedure may be complemented with an interview in order to explain certain aspects of the business plan or intentions of the applicant.

Application decision: After the conduction of an interview and a check of all documents, a decision is made on granting the residence permit.

Advantages of a residence permit by means of a business

  • Free movement within the Schengen area: A residence permit gives you the possibility to move and stay in any Schengen country freely.
  • Possibility of family inclusion: Family members are entitled to reside, study, and work in Hungary.
  • Long-term perspective: The residence permit is a transition that may lead to permanent residence and later to Hungarian citizenship.

What is recorded in the articles of association of a company registered in Hungary?

The constitutional documents of the company form the basis of the enterprise’s internal structure and operations, and are thus of prime importance in the organizational and management aspects of the business. The articles of association provide the basic principles concerning the operation and organization of the company and include all basic provisions on such aspects. Examples of basic provisions in this area include those referring to the following aspects:

Main elements of statutory documents

Aspect Details
Name and Legal Address of the Company The articles of association must include the full official name of the company and the address of its legal registration in Hungary.
Purpose of the Company’s Activity The objectives the company intends to achieve should be clearly described in the articles of association, including 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, their nominal value, and the number of shares are specified. The company’s authorized capital amount is also included.
Management Structure The organizational structure of the company should be described, including the names and powers of executive bodies (e.g., board of directors), as well as the procedure for their election and appointment.
Rights and Obligations of Shareholders Detailed conditions regarding the rights and obligations of the shareholders should be included, such as their right to participate in company management, receive dividends, and access information.
Convocation of Shareholders’ Meetings The conditions regarding when and how shareholder meetings are to be held should be outlined, including annual and extraordinary meetings.
Amendment and Supplementing of the Statutes The procedure to follow when amending or supplementing the statutory documents should be stated.
Liquidation and Reorganisation of the Company Conditions and procedures for the liquidation or reorganization of the company should be specified.

Importance of statutory documents

Statutory documents are not only important with respect to determining legal characteristics of the way the company functions, but they also have an important role in protecting the rights and interests of their shareholders and managers. They are legally enforceable documents; therefore, all participants of the company’s activity should strictly follow them.

How long does it take to set up a company in Hungary?

The time required to establish a company in Hungary depends on the following factors: company type, completeness and accuracy of documents and effectiveness of state institutions providing services.

Stages of Company registration

Criterion Details
Company Name Choice and Check for Uniqueness 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 Such constituent documents as the company’s articles of association and memorandum of association need to be prepared. The documents must be notarized. The procedure may take from several days to a week.
Opening of a Bank Account and Deposit of Authorized Capital In order to incorporate a company, one has to open a corporate bank account with an authorized capital deposit into the said account. The time required for opening an account ranges from a few days to a couple of weeks as per the bank and completeness of documents provided.
Registration with the Tax Authorities Once all the documents are prepared, these are then submitted to the Hungarian Trade Register for the purposes of actual incorporation. This application will take about a week or two to be processed.
Registration with the Tax Office The final step would be to register the Company with the Hungarian tax office so that a tax number can be granted. This takes up to a week.

General timelines

On average, the incorporation of a company in Hungary usually takes from 4 up to 6 weeks from preparing your documents until you receive all registrations and authorizations. It is also important to note that any delay in submission, or improper preparation, of documents might increase the registration time in general.

What kind of activities can a company conduct in Hungary?

Hungary possesses a good environment for diverse businesses, being advantageously located in the center of Europe, ensuring liberal economic policies, and having well-developed infrastructure. Most of the industries and services of the country are open to both domestic and foreign enterprises.

Main industries of the economy

Manufacturing

  • Automotive industry: With its highly developed supply network, Hungary nowadays is among the leading producers of automotive components and vehicles in Central Europe. Major foreign investors include Audi, Mercedes-Benz, and Suzuki with extensive production facilities in the country.
  • Pharmaceuticals and Biotechnology

IT industry:

Hungary has a well-developed infrastructure in the IT industry, and development of the technology sector is highly active, including software, mobile applications and e-commerce. Hungarian startups actively attract foreign investment and receive government support.

Agriculture and food processing

Agriculture has traditionally been a key industry, with leading positions in the production of grains, meat, fruits, and vegetables. It’s known for its wine-producing regions.

Tourism and hospitality

Hungary’s tourism industry is growing due to its cultural heritage, historical sites and thermal waters, attracting a considerable number of foreigners that visit the country.

Legal aspects of doing business

For initiating the activity in any of these sectors, it is enough that the enterprise should meet the Hungarian legal requirements by simply registering the activities, taking the licenses needed for the same, and conforms to the quality and safety standards for carrying out the concerned activity. Special permits or licenses may be required for specific activities-especially in the fields of health care, education, and financial services.

Does a company in Hungary have to have employees?

The backbone of every business venture is qualified personnel that work harmoniously and effectively to get the job done efficiently and contribute to the development of the company. Some business activities may require full-time employees in Hungary, just like in any other country. At the same time, not all need them.

Legal requirements

Hungarian legislation does not make the employment of employees obligatory for every form of enterprise. On the other hand, under the different form of company and under the other field of activity, respectively regulatory or licence requirements may be needed about hiring staff, such as follows:

Companies operating in fields requiring special licensing – such as the financial, health, or education sectors – are obliged to prove that qualified employees work for them in order to fulfill the licensing criteria.

Manufacturing companies usually need manpower to get operational jobs done.

Administrative issues

Small companies or companies at the initial start-up stage run solely by the founder alone who is usually an entrepreneur, may not require the hiring of employees. In that case, the management of the company would be run completely by the owner. Still, with the progress of the business a certain need may arise to hire people in special categories of work that can help increase efficiency in operations and reach new markets.

Economic issues

A decision to recruit employees should be based on the likely economic benefit and potential costs. Recruiting employees means additional salary, tax and social security costs. Therefore, it is relevant to determine whether employing staff will generate sufficient increases in revenues to justify these additional costs.

Benefits of employing staff

There are several advantages of being an employer including:

  • More productivity can be achieved and time can be freed up to concentrate on strategic business development.
  • Diversification of the company’s competencies by attracting specialists in certain areas.
  • Flexibility in project management and the possibility of serving more clients or the expansion of the circle of services provided.

Name selection for a company in Hungary – how to?

Naming a newly established company is such a crucial step in business development that it requires due consideration and strategic planning. A company name develops not only distinction within the marketplace but also forms an impression for the very first time in the eyes of potential customers and partners. In Hungary, the selection process involves certain legal requirements that have to be taken into consideration to successfully register a company.

Legal requirements for company name in Hungary

  • Unique and distinctive: It has to be unique. It shall not be identical or similar to any previously registered company names within the Hungarian Commercial Register, so it should avoid confusion and protect the brands against potential legal litigation.
  • No restriction: The name must not include words which can mislead people on the nature of business or type of company. For instance, the word “bank” shall be restricted to only licensed institutions dealing in finances.
  • Language aspects: The name may be registered in the Hungarian language or any other language using the Latin alphabet. It has to be spelled correctly and according to the grammatical and orthographic rules of that particular language.

How to choose the right name for your company

Criterion Details
Market Research Market research will help you to realize who your target audience is and what market niche it covers, which, in turn, will help in finding a name that speaks to your potential customers about your business, its values, and the products or services offered.
Creativity and Memorability The name should be easy to remember, easy to pronounce, and different from the rest; a creative name may be one of your strongest marketing tools.
Checking the Name’s Availability Prior to giving the final name, checking its availability in the Hungarian Trade Register is a must, so that your chosen company name does not refer to another already operating company.
International Aspects If you also want to do business outside of Hungary, it is worth checking that the name is acceptable and does not have pejorative meanings in other languages, either.
Scalability in the Future Go with a name that aligns with your business’ long-term scale-up strategy and doesn’t hinder future scalability.

Naming a company in Hungary should be judiciously performed, considering market and legal issues. If the name is rightly chosen, it will contribute to the creation of a brand that is easily recognizable and substantially increase the prestige of the company on the market. Due attention is necessary at this stage, and consultations with lawyers and marketing experts are required when needed for the best possible outcome.

FREQUENTLY ASKED QUESTIONS

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

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.

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

  1. 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.
  2. Strategic geographical location
    • Located in the centre of Europe, Hungary provides easy access to European Union markets as well as to Eastern European countries.
  3. Business flexibility
    • Hungary offers a flexible corporate structure and minimal barriers to doing business, making it easy to set up and run a company.
  4. Developed economic infrastructure
    • The country has a well-developed infrastructure, including modern transport networks, telecommunications and technological innovation.
  5. 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

  1. 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.
  2. 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.
  3. 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.

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

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.

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

  1. 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.).
  2. 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.
  3. Registration fee and capital: A registration fee and authorised capital, the amount of which depends on the type of company, must be paid.
  4. Obtaining a registered office: The company must have a registered office in Hungary, which will be used for official correspondence.
  5. Registration in the commercial register: Once all documents have been prepared, it is necessary to submit them to the Hungarian Trade Register for registration.
  6. 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.

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.

  1. 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.
  2. 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

  1. 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.
  2. 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.
  3. 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.

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:

  1. 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.
  2. 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:

  1. 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.
  2. 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.
  3. 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.

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

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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

  1. 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.
  2. Convenience and responsiveness:
    • The ability to file and negotiate online makes the process more convenient and faster.

Limitations and potential difficulties

  1. 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.
  2. 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.

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

  1. 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.
  2. Legal disputes:
    • The Company may be involved in current or potential legal proceedings, which may affect its financial and legal position.
  3. 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

  1. 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.
  2. 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.
  3. 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

  1. Quick Start Business:
    • Buying a ready-made company allows you to avoid the lengthy registration process and start commercial activities immediately.
  2. 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.
  3. 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.

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:

  1. 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.
  2. 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.
  3. 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:

  1. Investment incentives:
    • Tax incentives and grants may be available for large investments, especially in technology and research.
  2. Incentives for small and medium-sized enterprises (SMEs):
    • SMEs can receive incentives to support their growth and development, including simplified tax regimes and subsidies.
  3. 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.

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

  1. 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.
  2. 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

  1. 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.
  2. 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.
  3. 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

  1. 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.
  2. 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.

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

  1. 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.
  2. 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.
  3. 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

  1. 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.
  2. 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.
  3. 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

  1. Corporation tax:
    • Hungary offers one of the lowest corporate tax rates in Europe at 9%. This makes the country particularly attractive for international business.
  2. Value Added Tax (VAT):
    • The standard VAT rate in Hungary is 27%, but reduced rates may apply for certain categories of goods and services.
  3. 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

  1. Strategic Location:
    • Hungary is located in the centre of Europe, which provides convenient access to the markets of the European Union.
  2. Economic stability and support:
    • The Hungarian government actively supports foreign investment and offers various incentives and grants for businesses.
  3. 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.

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

  1. 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.
  2. 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

  1. 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.
  2. 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.
  3. 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

  1. Corporation tax:
    • Branches of foreign companies are taxed on profits earned in Hungary at the rate of 9%.
  2. Value Added Tax (VAT):
    • Branches are obliged to register as VAT payers and pay VAT on a general basis.
  3. 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

  1. 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.
  2. Low tax rates:
    • Hungary offers one of the lowest corporate tax rates in Europe, which favours profits.
  3. 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.

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

  1. 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.
  2. 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.
  3. 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.
  4. 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

  1. 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.).
  2. 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.
  3. Getting an interview:
    • In some cases, it may be necessary to be interviewed by consular or immigration officials to confirm the applicant's intentions.
  4. 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

  1. 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.
  2. High quality of life:
    • Hungary offers a high standard of living, developed infrastructure, quality education and medical care.
  3. 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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CONTACT US

At the moment, the main services of our company are legal and compliance solutions for FinTech projects. Our offices are located in Vilnius, Prague, and Warsaw. The legal team can assist with legal analysis, project structuring, and legal regulation.

Company in Czech Republic s.r.o.

Registration number: 08620563
Anno: 21.10.2019
Phone: +420 775 524 175
Email:  [email protected]
Address: Na Perštýně 342/1, Staré Město, 110 00 Prague

Company in Lithuania UAB

Registration number: 304377400
Anno: 30.08.2016
Phone: +370 6949 5456
Email: [email protected]
Address: Lvovo g. 25 – 702, 7th floor, Vilnius,
09320, Lithuania

Company in Poland
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Registration number: 38421992700000
Anno: 28.08.2019
Email: [email protected]
Address: Twarda 18, 15th floor, Warsaw, 00-824, Poland

Regulated United
Europe OÜ

Registration number: 14153440
Anno: 16.11.2016
Phone: +372 56 966 260
Email:  [email protected]
Address: Laeva 2, Tallinn, 10111, Estonia

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