Hungary company registration


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Since 2003, Healy Consultants has assisted Clients with business registration in Hungary. Our services include i) Hungary company registration ii) corporate bank account opening iii) employee recruitment iv) employee visa strategies and v) office space rental solutions.

Compare different Hungary entities LLC Fast solution Private limited company Rep office Branch office
Also known as Kft Kft zRt Ki Fa
Best use of company? All products and services Close a customer deal now Large projects Marketing & research Specific projects
How soon can you invoice Clients/sign sales contracts? 3 weeks 3 weeks 1 month 5 weeks 5 weeks
How soon can you hire staff? 3 weeks 3 weeks 1 month 5 weeks 5 weeks
How soon can you sign a lease agreement? Immediately Immediately Immediately Immediately Immediately
How long to supply corporate bank account numbers? 6 weeks 6 weeks 2 months 9 weeks 9 weeks
How long to supply company registration/tax numbers? 2 weeks 2 weeks 1 month 5 weeks 5 weeks
Corporate tax rate on annual net profits 9% 9% 9% 0% 9%
Limited liability entity? Yes Yes Yes No No
Resident director/partner/manager/legal representative required? No No No No No
Minimum paid up share capital? €1 €1 €15,000 None None
Can bid for Government contracts? Yes Yes Yes No Yes
Corporate bank account location? Raiffeisen Bank OPT Bank UniCredit Bank K&H Bank CIB Bank
Can secure trade finance? Yes Yes Yes Yes Yes
VAT payable on sales to local customers? 27% 27% 27% None 27%
Average total business set up engagement costs? €10,990 Inquire proposal €9,990 €9,860 €10,260
Average total engagement period? 3 months 3 months 4 months 3 months 4 months

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Accounting and tax considerations LLC Fast solution Private limited company Rep office Branch office
Statutory corporate tax payable on annual net profits for below €1.5mil? 9% 9% 9% 0% 9%
Statutory corporate tax payable on annual net profits for above €1.5mil? 19% 19% 19% 0% 19%
Legally tax exempt if properly structured? No No No Yes No
Group HQ tax incentives? Yes Yes Yes No Yes
Must file an annual tax return? Yes Yes Yes Yes Yes
Must file annual financial statements? Yes Yes Yes Yes Yes
Must appoint an auditor? No No No No No
Withholding tax on payments to foreign shareholders? 0% 0% 0% None 0%
Company Registration LLC Fast solution Private limited company Rep office Branch office
Resident director/partner/manager/ legal representative required? No No No No No
Minimum number of directors/managers? 1 1 3 board members or 1 general director 1 1
Minimum number of shareholders/partners? 1 1 1 Parent company Parent company
Minimum statutory paid up share capital? €8,500 €8,500 €15,000 None None
Security deposit to be kept with Government? No No No No No
Shelf companies available? Yes Yes No No No
Time to incorporate a new entity? 2 weeks 2 weeks 4 weeks 3 weeks 4 weeks
Can easily convert to a PLC? Yes Yes Yes No No
Public register of shareholders and directors? Yes Yes Yes Yes Yes
Can have preference shareholders? Yes Yes Yes No No
Business Considerations LLC Fast business setup solution Private limited company Representative office Branch office
Good entity for trademark registration? Yes Yes Yes Yes Yes
Can secure an import and export license? Yes Yes Yes No Yes

Sponsorship by a local citizen required? No
Our Client needs to travel to Hungary for business set up? Yes to complete bank account opening
Temporary physical office solutions available? Yes
You need a local resident as bank signatory? No
Maximum shareholding for foreigners? 100%
Can be wholly foreign owned? Yes
Government approval required for foreign owners? Yes
Government grants available? Yes
The entity will likely be regulated by? Hungarian Court of Registry
Monthly VAT reporting to the Government? Yes
Must sign an office lease agreement during incorporation? No
Shareholders & directors documents to be attested/translated? Yes
Each foreign director needs a personal income tax number? Yes
Foreign director needs a residence visa? No
Maximum number of staff allowed? No maximum number for any entity
Expatriate to local staff ratio? 1:5
Can secure residence visa for business owner? Yes
Other useful information
What will be included in my customer sales invoice? Click link
This country has signed free trade agreements? Yes
This country is a member of WIPO/TRIPS? Yes
This country is a member of the ICSID? Yes
Access to double taxation treaties? Yes
Average custom duties suffered? 3.60%
Government foreign investment approval required? No
Average monthly office rental? (€ per sq m) 22
Minimum statutory monthly salary? €542
Average monthly € salary for local skilled employees? €817
€ deposit interest rate? (1 year average) 0.467%
Overseas remittance currency controls? None
Banking considerations
Multi-currency bank accounts available? Yes
Corporate visa debit cards available? Yes
Quality of e-banking platform? Excellent
Crowd funding available in this country? Yes
Merchant solutions Yes

Hungary business setup summary

Press the link headings below to read detailed, relevant, up to date information.

  • Advantages and disadvantages

    Advantages of Hungary company registration

    Hungary business registration advantage

    1. A Hungary company is an excellent global holding company because:
      • Dividends received by a Hungarian company from a foreign company are exempt from corporate tax if i) the foreign company does not derive most of its income from Hungary and ii) pays an effective tax of more than 10%. Also, dividends paid to all non-resident entities are exempt from withholding tax;
      • Hungary does not impose any withholding tax on dividends, interest, or royalties paid to non-individual beneficiaries.
      • Capital gains resulting from sale of an investment are 100% tax-exempt if a Hungarian national has been a 10% shareholder in the company for at least one year;
      • Hungary has signed double taxation agreements with 80 countries including Australia, Canada, China, India and USA;
      • A Hungary company only requires 1 shareholder and 1 director who can be the same person, of any nationality and does not need to be resident.
      • It has one of the lowest corporate tax rates in Europe at 9%.
      • Securing a local and European Union VAT number is easy and instantly issued.
    2. A Hungary company is an excellent EU trading entity because:
      • Following the EU principle of free circulation, all goods originating in and trading within the EU are exempt from customs duties. Also, goods dispatched from one VAT-registered business to another will be exempt from VAT;
      • Companies do not require an audit if i) their average annual revenue for previous two years is less than €325,000 and ii) they hired less than 50 full-time employees;
      • Companies are allowed to carry forward their losses for a period of up to five years and offset these losses against up to 50% of the profit in another financial year;
      • Foreign companies enjoy an 80% corporate tax rebate for 10 years if they invest at least €321,000 in projects relating to i) environmental protection ii) broadband internet service iii) movie production iv) infrastructure for existing food production and storage facilities and v) R & D;
    3. The Hungarian government extends both refundable and non-refundable incentives to entrepreneurs aiming to invest or expand their businesses in Hungary. The main incentives include i) cash subsidies ii) tax incentives iii) low interest loans and iv) availability of land at reduced prices;
    4. Hungary is located in central Europe with access to the EU’s 450 million consumers, and is therefore excellently placed as a manufacturing, services and logistics hub benefitting from zero customs duties or quantitative restrictions.

    Disadvantages of Hungary company registration

    1. A Hungarian business must contribute 13% of an employees’ gross salary for social security purposes.
    2. At 27%, Hungary has the highest VAT rate in the European Union and the 4th highest VAT rate in the world.
    3. Hungary is perceived as one of the EU’s more corrupt countries;
    4. Immediately upon incorporation, our Client must appoint an accountant to conduct monthly tax, payroll and VAT reporting. Average monthly fees can reach €760;
    5. Hiring foreign employees in Hungary can be challenging as the company hiring a foreign employee will need to prove that they were not able to locate a suitable Hungarian citizen to fill the position.
    6. Non-Hungarian-speaking foreign entrepreneurs might find it difficult to communicate locally as only 16% of Hungarians speak English.
    7. In 2020 Hungary recorded a national debt to GDP of 80.40%, which is the highest national debt has been since 2011. This will likely lead to new taxes being implemented affecting all sectors of the economy.
    8. Hungary could suffer future economic challenges due to political conflict with the European Union.
    9. Importing and exporting goods to and from Hungary is a very slow and arduous process, with imports on average taking 19 days to clear and exports taking 17 days to clear.
  • Best uses for a Hungary company

    1. Hungary is an excellent EU manufacturing and distribution base because:
      • The Government will pay 40% of annual interest on a loan for resident SMEs if the amount borrowed is used for purchasing or manufacturing tangible assets;
      • A foreign company investing at least €1.6M in one of 47 Hungarian free entrepreneurial zones enjoys a 50% corporate tax rebate for 10 years;
      • Firms investing in infrastructure and R & D projects which result in creation of new jobs (dependent on the industry) can receive corporate tax credit of 80% for 10 years;
      • IT SMEs receive refund on i) 25% of payroll costs of software developers and ii) 10% of direct R & D costs for 4 years;
      • Hungary’s EU membership offers benefits including i) free movement of capital and labor ii) access to the vast European market of 500 million and iii) absence of withholding tax on payments to other European countries;
      • Hungary’s central location and its vast network of well-developed roadways, railways, waterways and airports make it a good choice for product distribution within Europe;
      • There are no capital or exchange controls imposed by the Hungary Government. Consequently, it is easy to convert foreign currency into Hungarian Forint (HUF).

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For additional information on our company registration services in Hungary, please contact our in-house country expert, Mr. Petar Chakarov, directly:
client relationship officer - Petar
  • Mr. Petar Chakarov
  • Sales & Business Development Manager
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