What are the types of legal entities I can register in Hungary?
Hungarian economic entities can be divided into companies and partnerships.
A private limited liability company is formed by at least one founder and it’s suitable for medium and small businesses. The management of this type of company is performed daily by at least one manager while the major decisions are taken by the general meeting of the shareholders.
For large businesses is advisable to use another economic instrument: the joint stock company, established by at least one founder. Unlike the limited liability companies, the daily management is assured by a board of managers composed by at least three members. The major decisions are taken just like in the case of the private limited liability companies by the general meeting of the shareholders. There are two types of Hungarian joint stock companies: open and closed. The main difference between them is that the stocks from the closed joint stock companies cannot be freely transferable to the public, while the stocks of an open joint stock company can be registered at the Stock Market. This is a method to increase the company’s capital.
The members of the companies have liabilities for the company’s actions in the limit of their contribution to the capital, unlike the members of partnership who have their personal assets not protected in case of liquidation.
A Hungariangeneral partnership is formed by partners who actively take part into the operating business. All the partners have decisional powers and can lose their assets in case the partnership have uncovered claims. No minimum capital is required in case of a general partnership.
A Hungarian limited partnership is formed by two types of individuals of corporate bodies: the general partners with an unlimited liability in the partnership and a silent one limited by his/her capital contribution. The silent partner cannot be involved in the process of management but have his/her personal assets protected in case of uncovered claims belonging to the partnership.
What are the steps for incorporation of a company in Hungary?
In the process of company registration, the founders must be represented by an attorney. This attorney will receive for his/her contribution a commission fee, which depends on the complexity of the registered entity.
In the beginning of registration, at least half of the company’s capital has to be deposited in a bank account. The bank will release a certificate related to this deposit, which will be used during the incorporation process. The other half of the contribution must be deposited no later than one year after the registration.
The applicant must then register at the Registration Court, which will also deliver the specific information to the Tax Authorities, which will check the financial aspects of the company and who will issue the corporate tax number. The Court will issue a certificate containing the company’s name, address, temporary tax and statistical number and the number of reference of the registration. Also, the Court will inform the State Tax Authority (for VAT and income tax purposes) and the Statistical Office regarding the newly formed company.
The last step of registration is the enrollment for the social security.
What is the minimum share capital of KFT and RT in Hungary?
A Hungarian limited liability company (KFT) requires a minimum share capital of at least 500000 HUF, for the entities established by more than one shareholder and 100000 HUF for the single shareholder limited liability company. A joint stock company (RT) must deposit at least 20 million HUF.
What documents are required for the incorporation of a company in Hungary?
In order to incorporate a company at the Registration Court, a founder must deliver a proof that the initial capital was deposited at the bank, the decision of opening a company, the company’s articles of association and the representatives ID’s and specimen signatures.
How quickly can I incorporate my company in Hungary?
A Hungarian company can be incorporated in maximum five days, much shorter than in other jurisdictions.
If you need information about opening companies in other countries, such as Iran or Portugal, we can help you get in touch with a local specialist.