Business entities in Hungary

Business entities in Hungary

Hungary business setup Healy Consultants will be happy to assist Clients with setting up businesses in Hungary. Foreign entrepreneurs have several options, the most commonly used being the setting up of an Hungarian LLC. However, our Clients willing to raise capital must setup a joint stock company (JSC), which can be completed for similar incorporation costs and requires only €16,400 as paid-up share capital, an amount lower than the requisite in most other EU jurisdictions.

The Hungary limited liability company (Kft.)

  • Hungarian limited liability companies can be registered with i) a single shareholder and ii) a single director, both of whom can be of any nationality and are not required to be ordinarily resident in Hungary. The minimum capital required for LLC incorporation is relatively low at €10,000;
  • All Hungarian LLCs are required to i) prepare annual financial statements and ii) file them in the Company Register every year.

The Hungary joint stock company (Rt.)

  • A joint stock company (JSC) in Hungary can also be set up with a minimum of one shareholder of any nationality;
  • Other requirements include i) an initial share capital of at least €63,850 fully paid up at incorporation for public JSC (at least €16,400 for private JSC) and ii) the appointment of at least three directors of any nationality and a certified accountant;
  • In accordance with the Corporate Taxation Act, all Hungarian JSCs are required to i) have their balance sheet and annual financial statements audited by a certified accountant and ii) file them with the company register every year.

The Hungary branch office (also known as Fa.)

  • Foreign corporations can enter Hungarian markets under their business name via a local branch office. However, using this approach will subject parent company to unlimited liability for losses incurred by the branch as the latter are not considered separate legal entities;
  • Every branch must appoint a resident legal representative to file annual returns with the Company Register.

The Hungary representative office (also known as K.i.)

  • In Hungary, an alternative solution is a representative office. This entity can be 100% foreign owned, but cannot pursue any commercial activities in the country;
  • This entity can only operate in i) promote the business of the parent company; ii) market research and iii) liaison activities.

Table of comparison between Hungary entities

 LLCJSCBranch officeRep office
Also known as:Kft.Rt.Fa.K.i.
How long to set the company up?2 weeks4 weeks3 weeks3 weeks
How long to open company bank account?3 weeks2 weeks2 weeks2 weeks
Enjoys limited liability in Hungary?YesYesNoNo
Minimum shareholders?1100
Authorities pre-approval needed to incorporate the company with a single shareholder?NoNoNoNo
Maximum foreign-ownership?100%100%100%100%
Minimum share capital?€10,000€16,400 (Private)
€63,850 (Public)
00
File annual tax return?YesYesYesNo
Corporate bank account options?Raiffeisen bankOTP BankUnicredit bankErste bank
Does our Client need to travel?NoNoNoNo
Resident director required?NoNoNoNo
Minimum directors allowed?1311
Corporate shareholders allowed?YesYesYesYes
Individual shareholders allowed?YesYesNoNo
Corporate director(s) allowed?NoNoNoNo
Hungary corporate tax rate?10%10%10%0%
Annual financial statements required?YesYesYesNo
Statutory audit required?NoYesNoNo
Allowed to issue sales invoices in Hungary?YesYesYesNo
Allowed to sign contracts with Hungary entities?YesYesYesNo
Allowed to import and export goods?YesYesYesNo
Can rent an office in Hungary?YesYesYesYes
Can buy Hungary property?YesYesYesNo
Can own equity in other Hungary companies?YesYesNoNo
Total Hungary business setup costs in Yr. 1€8,990€8,990€9,260€8,860
Subsequent annual costs (incl. accounting and tax fee)€3,420€3,420€3,420€3,420
Sample engagement fee invoiceHungary branch office invoice

Contact us

For additional information on our business setup services in Hungary, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Mr. Petar Chakarov, directly:
client relationship officer - Petar