Company registration in Hungry

Hungry

The main advantages of setting up a business in Hungary are confidential register of beneficiaries and the lowest tax rate in Europe — 9%.

6 simple steps to purchase a company

  1. choosing a country

  2. choosing a bank

  3. payment (by any method)

  4. sending documents

  5. company registration

  6. bank account opening

Legal framework

Local legislation provides for the following types of companies:

  1. Limited liability company (Hungarian: KFT) is established with an initial capital made up of the contributions by the participants whose liability for the company obligations is limited to the share of the contribution.
  2. Joint stock company (Hungarian: RT) is established with a share capital that consists of the predetermined number and par value of shares. Members’ liability for the company obligations is limited to the value of shares they own. RTs are divided into public (Nyrt.), that is, traded on a stock exchange, and private (Zrt.), which cannot be listed.
  3. Societas Europaea — the name of such company shall be ended by the abbreviation SE. These companies operate (or intend to operate) across the territory of the European Union.

Limited liability company (KFT)

Requirements:

  1. The director position can only be held by an individual, while shareholders can be both individuals and legal entities, with no restrictions being imposed on residency and number of participants.
  2. A registered office, where meeting minutes, register of members, and other documents are stored, is mandatory.
  3. Tax return and financial statement must be filed annually by the deadline of March 31.
  4. The company is required to have a minimum share capital of HUF 3 million (about €10,000).

KFT registration procedure:

  1. A notary is drawn on in order to prepare the necessary documentation. According to Hungarian legislation, the foundation documents can only be filed with the Court of Registry by a qualified local attorney-at-law. The latter is to be provided with the following data:
    1. Company name
    2. Main activity
    3. Founders’ identity documents and proof of residence (in the case of entities — registration documents + power of attorney)
    4. Information on company’s members and share capital
  2. Before applying to the Court of Registry, the notary prepares the set of documents listed below:
    1. Application
    2. Founders’ sample signatures
    3. Proof of company’s registered office address
    4. Articles of association signed by all founders in the presence of the notary (if signed outside Hungary, the articles must be apostilled)
  3. The notary can file the documents with the Court of Registry in two ways:
    1. By means of electronic communication if model founding document is used (takes 1 day)
    2. Via standard registration procedure (takes up to 15 working days)

Before registration, each company is subject to inspections by tax and customs authorities. It should be noted that all entities are also registered for taxation purposes by Central Administration of National Pension Insurance, Chamber of Commerce and Industry, and local government.

When registration process is complete, the Registrar returns the company’s articles of association and issues the following documents:

  1. Certificate of incorporation
  2. Extract from the registry of companies

Joint stock company (RT)

Requirements:

  1. The director position can only be held by an individual. There must be a board of directors consisting of at least three members or a general director of any residency. Shareholders can be both individuals and legal entities, with no restrictions being imposed on residency.
  2. A registered office, where meeting minutes, register of members, and other documents are stored, is mandatory.
  3. Tax return and financial statement must be filed annually by the deadline of March 31.
  4. Zrt. is required to have a minimum share capital of HUF 5 million (about €17,000), Nyrt. — HUF 20 million (about €67,000). When registering a company, not less than 25% of the share capital is to be paid up, and the remainder must be provided within a year of registration.

RT registration procedure:

  1. A notary is drawn on in order to prepare the necessary documentation. According to Hungarian legislation, the foundation documents can only be filed with the Court of Registry by a qualified local attorney-at-law. The latter is to be provided with the following data:
    1. Company name
    2. Main activity
    3. Founders’ identity documents and proof of residence (in the case of entities — registration documents + power of attorney)
    4. Information on company’s members and share capital
  2. Before applying to the Court of Registry, the notary prepares the set of documents listed below:
    1. Application
    2. Founders’ sample signatures
    3. Proof of company’s registered office address
    4. Articles of association signed by all founders in the presence of the notary (if signed outside Hungary, the articles must be apostilled)
  3. The notary can file the documents with the Court of Registry in two ways:
    1. By means of electronic communication if model founding document is used (takes 1 day)
    2. Via standard registration procedure (takes up to 15 working days)

Before registration, each company is subject to inspections by tax and customs authorities. It should be noted that all entities are also registered for taxation purposes by Central Administration of National Pension Insurance, Chamber of Commerce and Industry, and local government.

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