Setting up company in Hungary

Non-residents are allowed to set up a company in Hungary. The whole process takes is short and only takes 2 – 7 days. To set up a company in Hungary it is obligatory to use a service of a lawyer. That is because only lawyers are authorized to do set up a company. Usually only one meeting with lawyer is sufficient. He gives the client all the important information and helps him to sign the necessary documents. The most popular kind of company is KFT. That is because its partners are not responsible for company´s debts.

Below we provide information useful for everyone who intends to set up a company in Hungary.

All the partners must sign Memorandum of association. Memorandum is an essential document determining right and duties of the company´s partners.

Partners of the company must be identified clearly. Both legal and natural persons can become a partner in Hungary. It is noticeable, that there is a difference in taxation.

This is how tax rates are in Hungary

dividend tax for foreign natural person is 16 %
dividend tax for foreign legal person is 0 %.
corporate income tax is 10 % and if the company´s profit is more than 500 million HUF (1.6 million eur) tax rate is 19 %

Executive directors must be identified also. Residents of EU – states are allowed to become executive director with no restrictions. Persons, who are not EU residents need residence permit to become an executive director.

To carry out business, company must acquire a trade license. There are two types of licenses

Unqualified trade licenses are accessible for everyone irrespective of their education

Professional trade licenses are only granted for companies, whose partners, executive directors or employees have a required education or qualification

Company must prove its right to use a property as a registered seat. Therefore company must submit a title of ownership of the company (title deed), a lease contract or just an informal approval of the owner.

Company must have a stock capital in the amount of at least 3 million HUF (9700 eur). It is not needed to pay it on a separate bank account; declaration on oath is sufficient.

VAT registration is obligatory only if the company´s turnover is more than 6 million HUF (about 19 500 eur). VAT tax rate is 27 %.

How the process of setting up a company (kft.) in Hungary works:

During the initial consultation, you will tell us your precise business vision. We will help you select suitable core business activities, an address for the company’s registered office, a trading name and other essential particulars required to draft the incorporation documents. Consultations can be in person, by telephone or by e-mail.
We will prepare all the documentation required to form a company in Hungary (kft.), which must then be signed in the presence of our lawyer.
Once the documentation is signed, you will give us authorisation to represent you at the Commercial Register, Trade Licence Register and the Tax Office.
We will pay all the required fees for you at the Commercial Register.
If requested, we will register your company for VAT.
Once the company has been registered in the Commercial Register, we will give you the entire documentation, including an extract from the Commercial Register of Hungary.

How we can help you

If you are considering forming a business or you need expert help with company registration in Hungray, MagickFormations™ is ready to assist you with its skilled team of lawyers, consultants and tax experts. We are committed to making the process as stress-free and streamlined as possible for you, and we will take care of all your document preparation and administrative tasks regarding the registration forms, payment of government fees, local address registration, banking support, etc., whilst always keeping your exact objectives and unique vision in mind throughout the process.

Please use our Formation Wizard if you would like to set up your registered company in Hungary or if you would like to know the costs involved prior to proceeding with our exceptional services. For other queries and special requests for complex or customised company formation services, please contact us at connect@magickgroup.com