Setting up a Business in Hungary

Establishing a Company in Hungary takes just a few days and its registration in the EU intra-community VAT register is carried out immediately; which makes Hungary one of the few countries in the European Union where this process is automatic. This combined with the lowest corporate tax in Europe at only 9%, makes Hungary an ideal destination for companies, investors and also non-EU citizens, who would like to establish a new base of business operations on the European Continent, in an effective, cost effective, profitable manner.

Why Hungary is a Great Choice to Setup your Business

  • Quick and easy business registration: Your company can be up and running in a matter of a week or two.
  • Favourable and advantageous Tax System:
    •  Low Corporation Income Tax: At 9% is one of the lowest in Europe. 
    • Personal income tax has a flat rate of 16%.
    • Competitive tax system is aided by certain tax incentives and allowances
  • Tax identification number for immediate EU intra-community VAT purposes: no waiting or additional requirements.
  • Relatively low start-up capital with no initial deposits required.
  • Low Corp Tax benefit Businesses and help improve Profitability, while the administrative maintenance of the company is inexpensive.
  • Safe, Secure Central location within the EU.
  • Good infrastructure and excellent access to the rest of Europe and the World through well serviced transport hubs and modern airports.
  • Excellent reliable cost effective human resources 
  • One the best and fastest 4G Mobile internet services in the World
  • Excellent variety of well-priced Offices facilities, Industrial Parks and Shared Service Centres throughout the country.
  • Relative ease of obtaining travel visas and Business related residence permits for citizens of all nationalities.
  • Depending on the size and type of your business investment, the Hungarian government also has incentives in place to attract and assist investors, especially where jobs are being created. 
  • Take advantage of supporting mechanisms and systems as an operational EU company.

Procedures for the Establishment of a Company

To set up a Limited Liability company in Hungary, you will follow a simple registration application procedure through the Hungarian company commerce court, and the necessary representation through a Hungarian lawyer or legal firm. At that time of application for registration of the company, it is required to provide a contribution of at least half of the minimum share capital, which is 3,000,000 HUF (or +/- 8,686 Euro), in cash or in kind; while the other half must be contributed one year later. The administrator/s can be a foreigner, and without any permission if he is a national of an EU member state. The administrator must make a series of declarations: acceptance of the position, that there is no conflict of interest, declaration that monetary contributions are available to the company and contribution from his firm.

Step-by-step guide for getting your Enterprise started in Hungary

Documentation to be provided

  • Statutes
  • Certification of prior payment of fees
  • List of Partners
  • SA Passport Details
  • SA Home Address Details
  • Mother’s Full Maiden Name
  • Tax Numbers (SA Tax No.)

The general response time for the registration documents to be processed at the Commercial Registry, from the point that they have been submitted, is about two weeks. Once these documents have been processed, the company is registered within 1 or 2 business days and VAT registration is automatic; thereafter the company can officially begin its operations. Once the Company is established, the administrator, or legal representative, must open a bank account at any one of the banks in Hungary. The actual opening of the Bank account is quick and can easily be established on the same day of the application.

Taxation in Hungary

The General Corporation Tax is 9%. Individual income tax varies but it is around 15 %.

Repatriation of Profits

There is a national legislative policy that allows and makes provision for the repatriation of Parent-Subsidiary benefits between Member States, free of taxes. This is an attractive business consideration, when considering setting up a company in Hungary.  But why repatriate your profits when Hungary provides so many enticing business opportunities.

Establishing a Subsidiary of Another Company in Hungary

One can form a subsidiary of a foreign company or Hungarian Company. The procedure is similar and straight-forward which needs to be done by a legal firm or business administrative Co. in Hungary. What will be required is the following: * Documentation of the Main ‘parent’ company; * The Directors details; * Power of Attorney for the Administrative Legal Firm handling the documentation; * An Apostille accompanying the Corporate Documentation, provided at the Hungarian embassy or Consulate closest to your region. This administration process in once again best left to a professional business administration legal firm based in Hungary.

Starting a Business in Hungary will allow you to obtain a Visa and Business related Residence Permit (for you & your Family) in Europe

Anyone can have their company in Hungary, irrespective of their nationality or residence, and also manage it from their country. The Directors of the Co. may apply for visas, while also making arrangements to move to Hungary and obtaining a Business related residence permit, which is valid throughout the European Union, both for themselves and their families. These can be done once the company is established and registration has taken place. By obtaining residency in Hungary, you and your family will be able to freely move throughout the Schengen region, while enjoying the many advantages of Hungary, such as the low cost of living, safety and security unparalleled in the EU, a favorable business environment and great location in the heart of Central Europe.