Tips on doing business in Hungary

There are many ways of doing business in Hungary.

Doing business in Hungary

Thinking of starting a business in Hungary? To start any business anywhere even in your home country will bring with it many challenges and possible difficulties that could even make it seem impossible, but finding the right assistance and support will further ensure smooth sailing.

Doing business in Hungary is convenient and the cost of living is not as high as some other countries within Europe, which is beneficial even for individuals residing or working in the country without engaging in Hungarian business investments.

Getting started on the basics

Hungary has excellent ease of business prospects. Before venturing into officially establishing your company, it is crucial to determine what type of business you’re running i.e. “Partnership”, “Close Corporation”, “Limited Liability”, “Sole Propriety” or “Public Ltd”

• The Limited Liability Company (LLC) is the most common type of business in Hungary where it is known as (Kft). The business is fairly flexible allowing the company to have more than one director or members.
• As opposed to some other countries where establishing a company would mean having a local as one of the members or partners, Hungary allow foreign business owners to do business without a Hungarian partner.
• Having a business in Hungary will allow the foreign business owners residency within the country based on the type of business and whether or not the applicant qualifies.

Some steps to follow are now mentioned.

Prepare official documentations

It is important to be legally secure when starting up a business albeit in your home country or in a foreign one. A legal representative can assist with the drawing up of all legal documentations for the company.

Open up a bank account in Hungary

To facilitate monies and transactions it is very important that a business bank account is opened. The requested fees required for business permit must be available as capital to operate the business. It is required that the account be opened by the company’s founders.

Business registration

It is by law required that all businesses be registered irrespective of it being an international business or one in the home country. When starting any business, it remains of paramount importance to register the business. Business registration in Hungary only takes a mere 2-3 working days to be official.

Why is business registration so important?

• Safeguards your ideas, products and gives the company its own identity, no two businesses by law are allowed to be registered under the same name and this will be verified upon registration.
• Protects the owner with limited liability if the business is a “limited liability” type of business and will hold the business responsible for payouts of sorts in an unfortunate event, and not the owner.
• Receive more recognition and wider market as many people trust registered businesses.
• If the registered business is successful it may live on even after the original founders may have passed away or retired from the company.

Registering a business for tax

It is important to register your business as all businesses are legal entities and is required by law no matter how big or small, to pay company tax. Business owners enjoy a low corporate tax rate in Hungary of 9% which is an estimate of around HUF 500M (EUR 1.6M) per annum.

Contact us today so we can assist you with your immigration, business permits and queries.