Company in Hungary
Establishing a company in Hungary and the available legal forms of conducting business activity
Due to Hungary’s EU membership, the general business framework does not differ significantly from the rules in Poland. An entrepreneur in Hungary may choose from the following types of companies:
- Limited partnership (Hungarian: betéti társaság BT)
- Limited liability company (Hungarian: korlátolt felelősségű társaság Kft.)
- Joint stock company (Hungarian: részvény társaság)
However, the most common form of company established by foreign entities is the limited liability company. – It is a capital company and can be established either in a simplified mode (using the standard form of articles of association) or in an ordinary mode (using the articles of association according to the client’s needs).
Company formation in Hungary and registration time
The advantage of the reformed Hungarian system is that establishing a company in Hungary usually takes 2 to 3 days, if it is done electronically, of course taking into consideration the time needed to enter the company into the commercial register – cegbirósag. In case of a limited liability company, the registration in regular mode takes place within 15 working days after submitting the application to the registry court.
Remote opening of a company in Hungary
Company registration in Hungary takes place electronically. The preparation and submission of documents to the relevant commercial court is handled by a legal representative, and the formation of the company takes place on the day it is entered into the company register by the registration court.
Taxes in Hungary
Hungary is called a tax haven not without a reason. The current CIT rate there is 9%, which is the lowest in the entire European Union.
Capital gains taxation amounts to 19%. Capital gains obtained from the sale of Hungarian shares by a non-resident company are exempt from this tax, as well as gains from the sale of the reported shares.
In addition, there is no real estate tax in Hungary, but instead there is a construction tax, which is payable on the residential area of a building. Its rate is approximately 3.8 euros per square meter, or in other words 3 percent of the market value of the building as determined by the local government. There is also a land tax, payable on undeveloped land. The rate is then about 0.84 euros per square meter per year.
The VAT rate, on the other hand, is 27 %
Free Zones in Hungary
Currently, there are no Special Economic Zones or similar areas in Hungary. However, this does not mean that there are no systemic solutions for regional investment support.
The country’s main investment incentives include:
- tax relief of 25-50% of investment expenditures incurred – maximum tax reduction reaching 80% for 10 years;
- tax exemption of 10% of expenditures on remuneration of R&D department employees.
This is a way to encourage entrepreneurs to set up a company in Hungary.
Ready-made company in Hungary/Buy a company in Hungary
It is also possible to buy a company in Hungary, which is already registered. As a rule, a ready-made company in Hungary has only existed for a relatively short period of time, has not operated before and was created in order to be sold later. The offers presented on the Hungarian market allow buying a ready-made company in Hungary with VAT or VAT-EU.