Company Formation in Hungary
This amazing country, a full member of the EU, is located in Central Europe, in the center of the Middle Danube Plain. During the past decade, there has been steady advancement in the economy. This is evidenced, for example, by an annual GDP of more than 5%. Entrepreneurial activities are constantly regulated by legislation that is being improved through effective reforms. Nowadays, many business owners want to set up their establishment here and enter it in the Hungary company register.
Since the state has about 70 double-tax written agreements and is not offshore for many countries, opening a business here is the prizewinning solution. The big pluses will be a small corporate tax, a developed economic infrastructure, and a convenient location in the center of Europe.
Why do you need to open a company in Hungary?
Company registration in Hungary has many benefits: the owner can be either one or an unlimited number of people. The team may include individuals and legal entities. It can also be a minor owner, but in this case, a legal representative must appoint a manager.
The fact that Hungary is part of the European Union gives it the potential to carry out activities in any country in the Eurozone. Here, the corporate tax rate is one of the lowest in Europe – from 9% on net profit; there is no currency control; you can open an account in a European bank and obtain a tax residency certificate. The cost of starting a business is quite low.
Benefits of Fintech Harbor Consulting among company formation agents in Hungary
Thanks to the lawyers of www.fintecharbor.com, the process will take a couple of business days and, if desired, can be done online. Using a special ÁNYK program, we will fill out and submit an application for opening your company, draw up all the documents, and sign the papers with a personal electronic signature.
Our specialists, including fintech lawyers for business, will assist you in entering your organization into the Hungary business register. Note that all procedures can be held only through a Hungarian lawyer accredited by the state. They are necessarily present at the constituent agreement’s signing, preparing documents, and sending them to the “Registration Chamber.” The lawyer is responsible for the accuracy of the information and the correctness of filling out the forms. As a result, in a maximum of 5 days, your firm will receive a temporary certificate, which gives you the right to start activities (an electronic certificate with a registration number, an extract from the register of legal entities).
How much does it cost for company registration in Hungary?
The cost of registration a company in Hungary is 2800 EUR.
Requirements to register a company in Hungary
To open a company in Hungary, you must prepare a list of necessary documents. For a natural person:
- Notarised translation of passport.
- Completed application form for company registration.
For a legal entity:
- Extract from the Commercial Register of the country of incorporation (with apostille).
- Translation of the passport of the founder.
- Completed questionnaire for company registration.
When registering, it is obligatory to specify in which areas of economic activity the work is planned and the shares and responsibilities of all participants are allocated.
The following documents are also prepared for company registration in Hungary:
- articles of association;
- signature samples;
- memorandum of association;
- certificate of domicile in Hungary.
It is officially allowed to have a virtual office in Hungary. An essential requirement of the government is that the company representative must handle the correspondence received at the address. This is usually handled by an assistant in whose name a limited power of attorney is issued.
Types of companies
Company incorporation in Hungary does not limit your choice of legal form. Among the many company formats, we should highlight the most popular ones:
- A company with limited liability (Kft).
- Partnership with unlimited liability (Kkt).
- Limited Liability Partnership (Bt).
- Public limited company (Rt).
Company formation (Hungary) has peculiarities and conditions for each legal form. For a limited liability company, they are as follows:
- The minimum amount of the share capital is 3,000,000 HUF (7,400 EUR). At the same time, the paid-in part at the time of incorporation must be 50%.
- If, in addition to money, other assets are involved in the payment, they must be valued exclusively by independent experts in Hungary.
- The status and residency of the shareholders are irrelevant.
- The shares may not go on public sale.
For a partnership with unlimited liability:
- The minimum amount of share capital is not fixed.
- The capital is distributed equally among all shareholders.
- At least two partners establish the partnership.
- Equality of partners is declared. Their liability for debts and obligations is equal and unlimited.
- The status and residence of the partners are irrelevant.
Transferring shares to third parties without a general meeting decision is forbidden.
- The general partners are administered following the provisions of the Memorandum of Association.
The conditions are similar for a limited liability partnership. The only difference is the extent of the participants’ obligations.
For a public limited company:
- The share capital minimum is HUF 20,000,000 (50,000 EUR). At the same time, the paid-in part at the time of incorporation must be 30%.
- If, in addition to monetary assets, other assets are involved in the payment, they must be valued exclusively by independent experts in Hungary.
- The number of shareholders is unlimited. Shares determine liability.
- The status and residency of the shareholders are irrelevant.
- The Supervisory Board oversees the operation.
Foreign companies in Hungary pay the following types of taxes:
- Income up to HUF 500,000,000 – 10%. Income over HUF 500,000,000 – 19%.
- The rate of VAT varies depending on the type of business:
- for services and products – 25%;
- for basic food products – 18%;
- for medicine, books, newspapers – 5%.
- Tax is payable on dividends paid to foreign companies.
Hungary company formation and bank account
Hungary company formation provides for the opening of a bank account. This is a prerequisite for all Hungarian companies. The director must open the account in person within 15 days after registration.
Companies can also open accounts in other countries, but only if they have an account in Hungary.
Financial institutions here are quite liberal and open accounts for businesses owned by EU and non-EU residents. Online banking is available in Hungarian and English.
Bank account information is publicly available in the Companies Registry. The bank sends this information to the tax office itself.
Steps to company incorporation in Hungary
Foreign companies can start their business in Hungary by opening a representative or a branch office (with the right to commercial activities). For the Hungary corporate registry, the founders and the director must prepare a passport (with copies), a European national insurance number (if any), and proof of address of residence (this may be a utility bill issued 4 months ago or earlier). Supporting documents must contain the name, surname, and address. The company’s name is essential; it should not be consonant or be similar to the other Hungarian enterprises’ names; the abbreviation Kft is added at the end. A list of planned activities, a list of founders, and the amount of their financial participation are required.
The www.fintecharbor.com team did an excellent job in creating my company in Hungary. I didn’t even have to attend in person. They organized the entry of the company into the Hungary register of companies very quickly. Thank you for appreciating the time of your customers!
Do I need to come to the country in person to open a company?
We organize the procedure through a trusted representative. This does not require you to travel to the country. Documents must be signed directly in front of the Hungarian consul at Hungary’s embassy (consulate).
How do I check if a company is enlisted in Hungary?
Since January 1, 2008, the Ministry of Justice’s Company Information and Electronic Business Service website has provided online free access to some company data (https://www.e-cegjegyzek.hu/?ceginformacio). Or you can contact our lawyers to obtain an extract from the commercial register of Hungary.
Can I start a business in Hungary?
Any person can start a business in Hungary, regardless of citizenship, nationality, place of residence, and resident status. Opening an LLC (Kft) in Hungary is much easier than in other EU countries. You don’t need to get any permissions. And residents of “third” countries are equal in rights with European Economic Area (EEA) citizens.
Is Hungary good for commercial activities?
Hungary is a great country with many advantages for business people. This is both a simple registration of a company and the opportunity to start a business immediately after submitting documents, one of the lowest corporate taxes in Europe (9%). Low costs for opening and maintaining the company will be beneficial. The procedures for obtaining a residence permit are quite simple.
How can a foreigner start a business in Hungary?
Company formation (Hungary) is a fairly simple procedure. To open a business, you need to prepare a package of documents, pay the registration fee, open a bank account, deposit or leave a minimum authorized capital in the company and make a legal address.
What is the minimum capital requirement in Hungary?
The minimum authorized capital amount depends on the company’s legal form. For organizations with limited liability – 3,000,000 HUF (7400 EUR). For partnerships with limited and unlimited liability is not set. For an open joint stock company with limited liability – 20,000,000 HUF (50,000 EUR).
How long does it take to register a company in Hungary?
Register a company in Hungary takes 7 working days if the documents are in order and all requirements are met.
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