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GLOBAL REGISTRATION

Hungary

Advantages of Registering a Company in Hungary

1. An EU and Schengen member state with a prime geographic location, acting as a bridge linking Eastern and Western markets.

2. Stable political environment and safe public security conditions.

3. Favorable tax policies with a corporate income tax rate of 9%.

4. Digital online incorporation system enabling simple and fast registration procedures.

5. A sound and stable legal and regulatory framework.

6. Foreign investors enjoy national treatment when investing in Hungary.

7. Low operational and labor costs, with a pool of highly skilled workforce.

REQUIREMENTS

COMPANY TYPE

MATERIALS

Serial

Name

Details

Company Name

The legal name of a limited liability company must indicate its legal form and reflect its actual business activities. Both the full company name and abbreviated name shall be registered in Hungarian. Three to five alternative names shall be provided to avoid duplication with existing registered companies. Names generally end with "Kft." or "Zrt." to denote the type of entity.

Shareholders and Directors

(1) A minimum of one shareholder, which can be an individual or a corporate entity (no nationality restrictions);

(2) At least one director. The same person may serve as both shareholder and director, and a local resident director is not required (no nationality restrictions).

Registered Capital

Capital requirements vary depending on the company type and business sector. Taking the common limited liability company (Kft.) as an example, the minimum registered capital for establishing a Kft. is 3 million Hungarian Forints (less than 10,000 Euros). Shareholders bear limited liability. Full payment of the share capital is not mandatory upon incorporation, yet dividends cannot be distributed until the entire registered capital is fully paid up.

Registered Address

A legal registered address within Hungary is required, which can be a physical office or a dedicated virtual registered address (PO boxes are not acceptable). The registered address may differ from the actual business address; however, the actual place of operation must also be filed if they are not identical.

Business Scope

There are no general restrictions on business scope, except for sensitive sectors such as oil & gas, weapons and narcotics which require special permits.

Tax Registration

After successful incorporation, the company must complete tax registration and comply with Hungarian tax regulations.

Serial

Name

Details

Representative Office

It may represent a foreign company to carry out activities promoting its business in Hungary, yet it is not permitted to engage in commercial operations. It has no separate legal personality, there is no minimum capital requirement, and registration with the local court is mandatory.

Branch Office

It is an extension of the parent company and authorized to conduct business activities in Hungary on its behalf. The parent company shall be fully liable for all its operations. It does not possess independent legal personality, yet commercial activities are permitted. There is no minimum registered capital requirement. It enjoys financial autonomy, shall comply with Hungarian accounting laws, and is subject to corporate income tax and VAT.

Subsidiary Company

It is an independent legal entity with separate legal personality, permitted to conduct commercial activities and subject to minimum share capital requirements, and must abide by all Hungarian laws and regulations.

There are four types of such entities:

(1) Public/Private Limited Company by Shares (Nyrt. / Zrt.)

(2) Limited Liability Company (Kft.)

(3) Limited Partnership (Bt.)

(4) General Unlimited Partnership (Kkt.)

Foreign investors intending to invest in Hungary are required to register a local legal entity, most commonly in the form of a subsidiary. The prevailing corporate forms for foreign-owned Hungarian subsidiaries are the Limited Liability Company (Kft.) and the Limited Company by Shares (Nyrt. / Zrt.).

Serial

Name

Details

Documents

Information Collection Form

Power of Attorney

Individual Shareholder

1. Clear coloured scanned copies of passports of shareholders and Hungarian company directors;

2. Address proofs of shareholders and Hungarian company directors (utility bills or credit card statements stating residential address issued within the latest three months).

Corporate Shareholder

1. Company Registration Certificate and Articles of Association

2. Clear coloured scanned passports and address proofs of the legal representatives of corporate shareholders, Hungarian company directors and ultimate beneficial owners (utility bills or credit card statements with residential address issued within the latest three months);

3. Complete shareholding structure chart;

4. Documents of shareholders holding 25% or more shares in the company.

Notes

All the above documents need to be notarized and apostilled.

REGISTRATION PROCESS

1

Prepare incorporation documents

Fill out the information collection form and provide other required documents
2

Company name availability check

Company name availability check
3

Power of Attorney

Draft legal documents including Power of Attorney (POA) and other relevant paperwork
4

Document Notarization and Apostille

Complete notarization and apostille certification of documents
5

Submit the registration application

Organize all documents and submit them for company registration
6

Approval

Receive the full set of company registration documents
7

Handover of Incorporation Documents

Send back the original documents
8

Tax Registration

After registering your company in Hungary, tax registration is mandatory. You shall apply to the Hungarian tax authorities for tax registration to obtain a Tax Identification Number (TIN) as well as other relevant tax documents.
9

Open a Corporate Bank Account

Complete the corporate bank account opening procedures in accordance with the bank’s requirements.