Company in Hungary

Company in Hungary
Michał Gawlak

Michał Gawlak

Partner / Attorney-at-law

General information

  • 9%
    Tax rate
  • 24 hours
    Time of establishment of the company
  • 3 000 000 HUF
    Minimum capital

In recent years, Hungary has experienced a small economic miracle thanks to the removal of the rest of a centrally planned economy and the adoption of a model of liberal reforms.  It is a member of the European Union and its GDP is growing at a rate of more than 5% a year. Hungary is an attractive location for foreign entrepreneurs not only because of its location, but also because of one of the lowest corporate income tax rates.

Types of companies

There are several types of companies suggested to foreign investors:

  • Limited liability company (Kft, Korlátolt Felelõsségû Társaság)

A limited liability company (Kft) is the most common form of conducting business activity chosen by entrepreneurs. It is a legal entity and its establishment requires share capital contributed by the company’s shareholders. The required minimum value of initial capital is HUF 3 million (approx. EUR 10,000). Not less than 30% of the capital has to be paid into the company’s account. One of the advantages of a Hungarian company is that there is no obligation to appoint local shareholders or board members, which means that the company can be fully managed and controlled by foreign board members and partners. A limited liability company is liable for its liabilities up to the amount of the company’s assets, and partners are generally exempt from such liability, risking only the contributions made to the company. The company may be established by both natural and legal persons.

  •  Limited partnership (Bt, Betéti Társaság)

A limited partnership is characterised by the fact that at least one of the partners – the general partner (beltag) – is liable for the company’s obligations without limitation of its entire assets and at least one of them – the limited partner (kültag) – up to the amount of its limited partnership sum. Both natural and legal persons may participate in the limited partnership. However, the condition is that the partner with unlimited liability in a limited partnership cannot be a shareholder in other companies with the same legal form. At the same time, a limited partnership cannot be a partner in another limited partnership. There are no statutory requirements as to the amount of share capital or the required value of contributions to the partnership.

  • Join-stock company (Rt, Részvény tarsasag)

For larger businesses it is recommended to set up a joint stock company. The minimum share capital in a joint-stock company is HUF 2 million (approx. EUR 65 thousand). Similarly to Kft., at least 30% of the share capital must be paid in.  The remaining part of the capital may be contributed in kind. A joint-stock company may be established by a single-member company. A distinction is made between two types of joint stock companies: closed shareholder companies (Zrt., Zártkörűen működő részvénytársaság and public shareholder companies (Nyrt., Nyilvánosan működő részvénytársaság).

  • Branch (fióktelep)

Foreign companies can register their branch in Hungary. In order to do so, an entry in the court register must be obtained on the basis of documents specifying, among other things: legal form, seat, assets and scope of activity. Subsidiaries of foreign companies are considered as domestic companies in Hungary and their activities should comply with Hungarian legislation. Foreign companies should provide the subsidiaries with the funds necessary to cover their fixed costs and meet their payment obligations. Branches in the course of their commercial activities are authorised to enter into contracts.

Company registration procedure

Registration of the company:

  • Preparation and signing by the founders (shareholders) of the articles of association of the company’s tatute;
  • Payment of the share capital to the company’s bank account;
  • Registration of the company in the Registry Court and obtaining a tax identification number;
  • Registration in the Tax Office, Municipality, Chamber of Commerce and Central Administration of the National Pension Insurance.


There are no restrictions on the number of shareholders, however, a minimum of one shareholder is required to establish a company. Companies with bearer shares are not allowed.

Management Board:

The management of the company may be exercised by one or more directors elected by the shareholders. Directors may be shareholders.


The appointment of the board of supervisory directors is only mandatory if the average annual number of full-time employees exceeds 200.

Registered office:

The company must have a registration address, correspondence handling and telephone contact. These duties may be performed by a virtual office, which may, however, make it difficult to obtain VAT registration.

Time to set up a company:

The time of establishing a company is about 4 weeks.


The minimum capital is HUF 3,000,000 and it is paid in full during the registration of the company.

Taxes and finances

Tax residence of the company

A company is resident if it is registered in Hungary or is managed and controlled by Hungary. Residents pay tax on income from both domestic and non-domestic activities. Non-residents pay tax only on income earned in Hungary.

CIT rate

9% An additional fee (surtax) may be charged for some activities. In some cases an alternative minimum tax may apply. Any business expenses may be deducted. Depreciation is carried out on a straight-line basis. Losses realised before 2015 may be deducted up to a maximum of 2025. Old losses from 2015 onwards can be deducted for a maximum of 5 years in the order in which they occur (i.e. the first loss recorded must also be deducted first). The amount of losses deducted may not exceed 50% of revenues. Retrospective deduction is not permitted. Capital gains are taxed in the same way as income.

Double taxation

Exemption by virtue of signed treaties.

Counteracting tax avoidance

Transfer pricing rules are based on OECD regulations. Insufficient capitalisation: Interest on debt exceeding three times the taxpayer’s equity capital is not deductible for tax purposes (exception: debt at a bank). CFC: Implementation of OECD rules; a controlled company is a foreign company in which, directly or indirectly, a minimum of 50% of the shares is held by a Hungarian resident. Multinational companies report their activities in each country.


Tax year is a calendar year. A different model of the year, which may also be less than 12 months, may be adopted. Tax returns must be submitted in electronic form by 31 May of the year following the tax year, or within 5 months of the end of the tax year if a different model has been adopted. Payments are made in advance, monthly or quarterly depending on the company’s turnover. The limitation period shall be 5 years from the end of the year in which the liability arose.

Withholding taxes

No withholding taxes for legal persons.


The standard rate is 27% (reduced rates 18% and 5%). VAT returns are filed and payments are made monthly, quarterly or annually, depending on the amount of the VAT liability.

Other taxes

  • Real estate tax – levied by local authorities, at their discretion, but not exceeding the top-down rates.
  • Real estate transfer tax – 4% on the transfer of real estate to one billion HUF and 2% for the surplus on this amount (maximum tax amount is 200 million HUF).
  • Stamp duty – binding in court and administrative procedures, the rates vary depending on the procedure.
  • Customs duty is levied on products originating outside the EU. Excise duty is levied on alcohol, tobacco and fuel.

The use of Hungarian companies became popular especially after the CIT reduction. In theory, the country with some of the lowest tax rates in the European Union. In practice, the tax system might be called complicated.

Do you want to establish a company in Hungary?



Contact us by filling out the form at the bottom of the page.
Remember, the more information you provide us at the beginning of cooperation, the sooner we will be able to prepare an offer for you. If we deem it necessary due to the scope of the inquiry, we will offer you a paid consultation aimed at preparing an offer for you with elements of tax planning.



Choose the payment method – we accept transfers and payment by credit / debit card and blik.

The stage of collecting information necessary to establish a company

The stage of collecting information necessary to establish a company

After accepting our offer, we will send you a list of information and documents that we will need to establish a company for you quickly and efficiently. At this stage, our specialists will provide you with professional advice and experience enabling you to efficiently collect the required documents and information.

Receipt of company documents

Receipt of company documents

After registering the company, we will inform you about obtaining the documents – we can send them to you by courier, or arrange their collection at the office. If you have chosen the service of opening a bank account that requires personal appearance, our specialist will provide you with the company’s documents when assisting you in opening a bank account.

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Michał Gawlak

Michał Gawlak

Partner / Attorney-at-law

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