A simple business form in Hungary
Investors who want to run a small business have the option to set up a sole trader in Hungary. Also known as the sole proprietorship, it is the simplest business form but also the one that creates the most liabilities for its owner.
The Companies Act in Hungary regulates the main types of businesses
available on its territory. The experts at our Hungarian law firm
can give you complete information about the liabilities that arise with setting up a sole trader
The sole proprietorship in Hungary
The sole proprietorship
has no legal personality, but has other rights for companies in Hungary
such as the right to acquire property or enter into agreements. This business form is owned only by one individual – a natural person who is also the sole member of the company
Sole traders can be set up by Hungarian nationals
or by foreign individuals who hold a residence permit in Hungary
. Individuals who want to perform business activities as sole traders
must apply for a sole trader permit
. The application form will be accompanied by the following documents:
- proof of payment for the application fee;
- criminal record;
- qualification documents: proof that the individual is qualified to perform the respective activity;
- personal identification documents and residence documents;
- employment certificates (if the individual does not perform the sole trader activity as the main occupation).
Sole traders in Hungary can commence their activities after the permit is issued. They can only conduct the activities described in the permit and must perform the activity themselves.
The advantages of a sole trader in Hungary
It is rather easy to set up a sole trader in Hungary
compared to the other business forms available in this country. Although the sole trader
will also need to comply with certain taxation laws
and make social security contributions, the demands are more relaxed than for large companies which require annual audits.
Lawyers in Hungary
, private health contractors, social workers, consultants, accountants and other service providers can benefit from setting up as sole traders in Hungary