Types of Structures in Hungary

Company incorporation steps in Hungary

1. Choose a company name: The name of the company must be unique and not already registered in Hungary. You can check the availability of your desired company name on the Hungarian Company Information System website;
2. Draft the articles of association: This document sets out the rules for running the company, including the share capital, the number of shares, the rights and obligations of the shareholders, and the procedures for appointing and removing directors;
3. Deposit the share capital: The minimum share capital required to incorporate a limited liability company in Hungary is HUF 3 million (approximately EUR 8,300). The share capital must be deposited into a Hungarian bank account;
4. Register the company: The registration process can be completed online through the Company Registration Portal (CEFRI) or in person at the Company Registration Office. You will need to provide the articles of association, proof of deposit of the share capital, and other relevant documents;
5. Obtain a tax number: All companies operating in Hungary must have a tax number. You can apply for a tax number through the Hungarian Tax Authority;
6. Register for social security: All companies must register with the National Tax and Customs Administration (NAV) and pay social security contributions for their employees.
7. Register for VAT: If your company's turnover exceeds HUF 8 million (approximately EUR 22,000) per year, you must register for VAT;
8. Obtain any necessary permits and licenses: Depending on the nature of your business, you may need to obtain additional permits and licenses before you can start operating;
9. Open a bank account: You will need to open a Hungarian bank account for your company to receive payments and pay expenses.

The benefits of company formation in Hungary

• Low corporate income tax rates: As mentioned earlier, the corporate income tax rate in Hungary is one of the lowest in Europe, which makes it an attractive destination for foreign investors;
• Strategic location: Hungary is located in the heart of Europe, with easy access to both Western and Eastern European markets. The country is also a member of the European Union, which makes it an ideal location for businesses looking to expand into the EU;
• Skilled workforce: Hungary has a highly educated and skilled workforce, particularly in the fields of engineering, IT, and manufacturing;
• Business-friendly environment: Hungary has a relatively simple and transparent business registration process, and the government has implemented several measures to support entrepreneurship and foreign investment;
• Competitive costs: The cost of living and doing business in Hungary is generally lower than in other Western European countries, which can result in significant cost savings for companies;
• EU funding opportunities: Hungary is eligible for funding from the European Union, which can provide financial support for research and development, innovation, and other business activities.

Taxation in Hungary