The basics of how to set up a company in Hungary
The same legal system that is currently used in EU countries is used when you want to set up a company in Hungary. If you are a foreigner looking to start a business in Hungary and you have a valid residence permit, you’ll be able to do so after you receive a sole trader’s license.
How long does it take to set up a company in Hungary?
On average, it takes about five days to set up a company in Hungary. This includes time for all the legal procedures including consultancy services with a lawyer and visiting the registration court. More often than not, expatriates choose to invest in companies that are limited by shares and limited liability companies.
What type of companies can you invest in Hungary?
In Hungary, foreigners will have the opportunity of investing in one of four different types of companies. These include:
- KKT – General Partnerships – In these companies, all partners bear unlimited liability in the operations of the company.
- BT – Limited Partnerships – These companies see at least one general partner having unlimited liability for the operations of the company. Other partners in these companies have only limited liability.
- RT – Joint Stock Companies – Within Joint Stock Companies, the company assets are traded on the Stock Exchange. These can be private or public entities but only have a single stakeholder. These types of companies are obliged to have a board of directors with at least three members and no more than eleven.
- KF – Limited Companies – Limited Companies in Hungary are not allowed to raise capital from the public. Shareholders of these companies have limited liability, and the minimum equity of the company must be more than HUF 3 million.
How to register a company in Hungary
All companies and businesses in Hungary have to be registered in the commercial register at competent district courts. All applications for business registrations are done digitally at the Commercial court by an appointed lawyer. Lawyers that submit your business registration application will submit the following:
- A commercial license
- Documents of incorporation
- Business name of the company and address of its officers
- Location of the company’s activities
- Type of activities
- Form of incorporation
- Approval for foreign workers
The company also has to be registered with:
- The Central Office of Statistics (KSH)
- National Income Tax Authority (APEH)
- Regional Income Tax Authority
- Regional Court of Registration
- The Institute of National Insurance
What about entrepreneurship in Hungary?
The level of entrepreneurial activity in Hungary is very low when compared with other EU countries. A lot of Hungarian citizens are employed by companies and prefer it over working for themselves. This, however, does not mean that you cannot be an entrepreneur living in Hungary, it just changes the way you would operate and register as a business in the country. Still, there is a visa for entrepreneurs in Hungary – the Hungarian Entrepreneur Program (HER).
If you are still not sure on how the system works and would like some assistance, feel free to reach out to our team of expert advisors who are ready to give you a helping hand!