Types of companies in Hungary
Hungary has numerous types of companies
which can be incorporated by local and foreign investors
. The share capital in Hungary
is different for each company type and investors need to observe the requirements concerning this initial amount.
According to the Hungarian Commercial Code
, the following types of companies require a minimum share capital
- the limited liability companies;
- companies limited by shares: private or public.
Partnerships in Hungary do not require a minimum share capital.
Share capital requirements in Hungary
The limited liability company (Kft)
requires the smallest minimum share capital
: 3 million HUF (nearly 10,000 EUR). This amount was increased in 2014 through a change in the Hungarian corporate law of the new Civil Code, after being previously set at only 500,000 HUF. The liability of the company’s shareholders is limited to the share capital invested
in the company and, if any mentions are made in the company’s Articles of Association, the shareholders may be held accountable for other contributions also. A shareholder’s rights are represented by quotas in the company. The share capital of a private limited liability company in Hungary
can be paid in cash or kind. One of the advantages of registering a company in Hungary
is that the share capital
needs not be deposited in a bank account
and can be spent right after the incorporation
. The limited liability company is very popular for small and medium sized businesses.
The share capital for a private company limited by shares (Zrt.)
is 5 million HUF (almost 16,000 EUR). The share contribution
for a private company in Hungary can be made in cash or kind. The board must be comprised of three to fifteen members just like the public company limited by shares
and the shareholders will be held liable to the extent of the nominal or issue value of their shares. According to the company law, this type of company
can have its share capital made up of only in-kind contributions.
The minimum share capital for a public company limited by shares (Nyrt. or just Rt.) is 20 million HUF (nearly 64,000 EUR). This is the largest amount to be paid as capital contribution in Hungary. The shareholders of a Rt in Hungary will be held liable for the company’s debts and obligation within the nominal or issued value of their shares in the company. The board of a public limited company must have at least three members which must be natural persons. The Hungarian public Rt may only issue registered shares.
Other requirements for Hungarian companies
Any increase or reduction in the minimum share capital for these types of companies is made by a decision of the General Meeting. The share capital can be increased by issuing new shares or through other methods, such as issuing employees’ shares or by converting bonds. The share capital may be reduced by stamping the shares, by exchanging the shares or by reducing the number of shares.
You can contact our Hungarian lawyers
for details about the new provisions of the Commercial Code. If you want to set up a company
and need business consulting services
our law firm in Hungary
will be able to provide you with tailored solutions based on your needs.