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Company registration in Hungary

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Located in the heart of Europe, Hungary offers a strategic location, a skilled workforce, and a business-friendly environment. Whether you're a startup or an established enterprise, our tailored solutions cater to your specific needs.

Our dedicated team of legal experts navigates the intricate landscape of Hungarian regulations, ensuring a smooth and compliant setting up a company in Hungary. From handling paperwork to liaising with local authorities, we take the hassle out of the process of company incorporation in Hungary.

At the core of our services is a commitment to transparency and efficiency. We prioritize clear communication, providing you with a comprehensive understanding of each step. Our goal is to empower you with the knowledge needed to make informed decisions for your business.

Why Hungary Company Formation?

Company formation in Hungary provides you with a blend of strategic advantages and a business-friendly environment.

Strategic location

Hungary's central position in Europe and membership in the European Union provide unparalleled access to diverse markets, making it an ideal hub for businesses seeking strategic connectivity.

Business-Friendly Environment

Hungary's commitment to creating a conducive business environment is evident. The country's legal framework allows individuals and entities, both local and foreign, to open a company in hungary and operate without unnecessary restrictions, except in specific sectors like agriculture.

Favorable Tax System

Hungary boasts a tax system that encourages business growth. 9% corporate tax rate is the lowest amongst OECD countries. Local business tax rate aligns with the specific location of Hungarian company and ranges from 0% to 2%. Dividends, interest, and royalties paid to resident or non-resident legal entitles are tax-free. Personal income tax rate is 15%. Hungary's corporate structure is not considered an offshore haven, and the country's policies promote transparency and compliance.

Skilled Workforce

Hungary takes pride in its workforce – highly trained, multilingual professionals whose salaries remain competitive, offering cost-effectiveness compared to many other EU countries.

Main advantages of company incorporation in Hungary

Types of Hungarian Companies

Hungary company formation involves strategic choices in company structures tailored to your objectives. Explore the diverse types of Hungarian companies available to both local and foreign entrepreneurs.

Opting for a representative office presents an alternative route. While lacking the ability to engage in commercial activities, a representative office plays a pivotal role in supporting the parent entity. This includes assisting in contract preparation and providing advertising services. Registration with the Hungarian Court of Registration is a prerequisite.

Services Provided by InteliumLaw

Our services related to the assistance with company formation in Hungary usually include:

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Process of company registration in Hungary

Legal requirements for company registration in Hungary

Documents required to company formation in Hungary

Document requirements vary based on the chosen business structure. Whether you opt for a sole trader, partnership, or a limited liability company, we're here to streamline the process for you.

In general, the following documents should be provided:

- Memorandum and Articles of Association. These documents delve into crucial details such as shareholder information, director appointments, share capital, legal address, and the primary object of activity.

- Documents certifying identity of all shareholders and general managers.

- Utility bills of all shareholders and general managers.

- Resolution of founders or article of foundation.

Official translation of the documents with notary certification and apostille/legalization could be also required.

Taxation and Accounting

CIT and LBT. Resident companies in Hungary are obligated to pay 9% income tax on their global earnings, while non-resident companies are taxed solely on income generated within Hungary. Hungarian companies generally enjoy an income tax exemption on dividends, except those distributed by a controlled foreign company.

Additionally, Hungary's unique Local Business Tax (LBT) system allows municipalities to levy LBT, which is capped at 2%. LBT is deductible for Hungarian CIT purposes.

Duty to Support Innovations. A levy of 0.3%, based on the municipal business tax base, supports innovations. However, medium and small businesses are exempt from this levy.

Capital Gains. There is no separate tax on capital gains. Capital gains are integrated into the taxable base of income tax. Capital gains from the sale of shares by a shareholder of a Hungarian real estate company, resident in a treaty-absent country, are taxed at 19%.

VAT. The standard VAT rate stands at 27%, with reduced rates of 18% and 5% applicable to specific goods and services.

WHT. Non-resident companies are not subject to withholding tax on dividends, interest, and royalties. For non-resident individuals, the tax rate may reach 15%, unless reduced under a double taxation treaty.

CFC rules. Controlled foreign company (CFC) rules are applicable to foreign companies subject to a tax rate less than half of Hungary's rate. Exceptions apply, especially if the taxpayer demonstrates that the foreign company's income isn't related to tax evasion.

Accounting. Financial year in Hungary starts on 1st January and ends on 31st of December. Accounting rules are set forth by Hungarian Accounting Act, intricately woven with Hungarian Accounting Standards.

The obligation to appoint an auditor arises when a company surpasses certain thresholds. Specifically, if a company's average annual net sales revenue surpasses HUF 300 million for two successive business years, or if the average number of employees exceeds 50 over the same period, the appointment of an auditor becomes mandatory. However, in instances where these criteria are not met, the appointment of an auditor remains an optional, strategic decision for the company.

Ongoing Compliance and Support

Registering a company in Hungary is just the beginning. Ensuring its ongoing compliance with Hungarian regulations is an equally crucial aspect of long-term success. At InteliumLaw, we go beyond the initial registration phase, offering a comprehensive suite of ongoing compliance and support services.

In the ever-evolving legal landscape, staying informed is paramount. InteliumLaw keeps a vigilant eye on regulatory changes and updates, ensuring that your company remains well-informed and proactive in adapting to new requirements. We provide timely alerts and insights to navigate any shifts in compliance standards.

InteliumLaw offers ongoing legal support to address any queries, concerns, or legal challenges that may arise during the course of your operations. Our experienced legal team is just a message or call away, ready to provide guidance and solutions.

Why choose InteliumLaw to register a company in Hungary

To open company in Hungary, you definitely need a partner who not only understands the intricacies of the legal landscape but also prioritizes your unique business needs. At InteliumLaw, we offer a suite of unparalleled services designed to make the process smooth, efficient, and tailored to your success.

Expertise

InteliumLaw boasts a team of seasoned professionals well-versed in Hungarian corporate law, ensuring that your company registration adheres to all regulatory requirements.

Personalized guidance at each step

We recognize that every business is distinct, and your journey should be treated as such. Our team provides personalized guidance from the inception of the registration process to its successful completion. Whether you are a startup or an established enterprise, we tailor our approach to meet your specific requirements.

Efficient process

InteliumLaw takes pride in its streamlined and efficient processes. We understand the value of time in the business world, and our goal is to expedite your company registration without compromising on precision. Our well-defined procedures ensure a hassle-free experience for our clients.

Comprehensive support

Our commitment to your success extends beyond the registration phase. InteliumLaw offers comprehensive support, providing insights and assistance on various aspects of business operations in Hungary. From compliance to ongoing legal support, we stand by you every step of the way.

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FAQ

How much does it cost to open a company in Hungary?

Company formation Hungary fees depend on a chosen type of legal entity and supporting services. We will be pleased to provide you with our commercial offer tailored to your needs.

How long does the company formation process typically take in Hungary?

It takes up to 15 days following the preparation of required documents to open company in Hungary.

Can I set up the company as a subsidiary to my existing business?

Yes. A subsidiary can be registered as a new legal entity in Hungary with foreign parent company being its sole shareholder. Also, foreign businesses could consider registering a branch or representative office.

A branch, duly registered with the Court of Registration, operates as an extension of the parent company. While maintaining ease of administration, it does require adherence to Hungarian law, including the necessity of a business license. Unlike a legal entity, a branch doesn't mandate a minimum share capital, offering flexibility in structuring your business presence in Hungary.

Opting for a representative office presents an alternative route. While lacking the ability to engage in commercial activities, a representative office plays a pivotal role in supporting the parent entity. This includes assisting in contract preparation and providing advertising services. Registration with the Hungarian Court of Registration is a prerequisite.

Why do I need a client gate in Hungary?

The Client Gate serves as your exclusive gateway, connecting you to a spectrum of essential services. More than just a portal, the Client Gate is a key tool maintained by the Government to streamline various administrative tasks crucial to your business operations.

From the submission of tax reports to the scheduling of residency and work permit appointments, the Client Gate is a multifaceted platform designed to enhance your administrative efficiency. Beyond tax-related functions, this portal also provides a seamless entry point to the Company Gate, a hub where company-related issues can be addressed and resolved with ease.

Opening the Client Gate is a personalized process that necessitates your physical presence, either in Hungary or at the Hungarian Embassy in your chosen city.

Do I need to deposit the share capital amount to my company’s bank account?

No. There is no requirement to deposit the amount of the share capital, while you are setting up a company in Hungary. The share capital can be paid within 2 years.

What are the tax implications for a foreign-owned company in Hungary?

Dividends, interest, and royalties paid by a Hungarian company to its foreign parent company are not subject to withholding tax in Hungary. In case the shareholder are non-resident individuals, withholding tax rate may reach 15%, unless reduced under a double taxation treaty.

Do I need to be a resident of Hungary to form a company there?

No. The country's legal framework allows individuals and entities, both local and foreign, to operate without unnecessary restrictions, except in specific sectors like agriculture.

Can InteliumLaw help with opening a corporate bank account in Hungary?

Yes. InteliumLaw simplifies the process by guiding you to the right banking institution. Whether you need a business account for daily transactions or require specialized services, we facilitate a smooth banking experience.

What is the minimum share capital required for a Hungarian company?

The minimum share capital for a Hungarian LLC (Kft.), currently amounts to 3 million HUF (around EUR 7,900). The minimum share capital for a Hungarian Joint Stock Company (RT) currently amounts to 5 million HUF (around EUR 13,100). There is no requirement to deposit the amount of the share capital.

Can InteliumLaw provide accounting and tax services after company formation?

InteliumLaw can assist with finding suitable accounting and tax services providers by referring you to our partners in Hungary.

Other services

Bank and merchant accounts opening

Inteliumlaw has a developed network of foreign banks and non-banking financial institutions, as well as payment aggregators around the world to offer our clients tailored Payment Solutions for Business. We help our clients with the selection of an institution for opening an account that meets their goals and wishes and fully support the account opening process, including bank compliance stage. We provide services for opening personal and corporate, current, savings and wealth management accounts, merchant accounts, accounts in crypto-processing, which allow our clients to accept payments in crypto-currencies. Corporate accounts well-functioning Corporate Bank Account is an important element for any type of businesses, regardless of jurisdiction or industry. Company exists only on paper if it does not have a bank account. It could not be a fully-functional market participant, conduct its activities, accept incoming and make outgoing payments, accumulate earned funds, and distribute profits. Even working with cryptocurrencies, in order to organize transparent activity of your business, increase economical substance, etc. your company will need a bank account, as well as solutions allowing processing of crypto-payments on your web-site and conversion of cryptocurrencies into fiat. Based on the analysis of your business, our firm will advise you on payment solutions the most suitable for your business needs and help you to Open Bank Account with a Foreign Bank. It could be a traditional account with a foreign bank and/or account with non-banking financial institutions (Electronic Money Institutions, Payment Institutions), integration with payment aggregator or crypto processing. Process of opening accounts in banking institutions is becoming an increasingly complex. Banks are ready to consider the most transparent businesses with a low-risk level, in particular traditional offline businesses. The nexus approach becomes more popular, as a result just limited number of banks accept foreign companies (not incorporated in/tied to the country of bank location). Given all the difficulties with opening accounts in traditional banking institutions, accounts in non-banking financial institutions (EMI or PI) are considered as solutions for online businesses – software companies, eCommerce, digital marketing, online gambling and others. At the same time, it should be noted that due to the tightening of global legislation in the field of combating the financing of terrorism and money laundering, passing the Know Your Client (KYC) procedure during the acceptance of clients has become more difficult not only in banks but also in non-banking financial institutions. To open an account, it will be important for the client to show the business plan for the project / business, justify the source of wealth for the business and beneficiaries, ideally, disclose the experience in the chosen business field, the planned first contracts with clients, and so on. Inteliumlaw will be happy to assist you with selection of a relevant payment solution for your business, support the process of account opening and make it to the extent possible smooth and easy. If you have any questions or require assistance, please contact our specialists. Personal bank account Opening personal accounts in reliable banking jurisdictions for the placement of distributed profit, saving and disposing of personal funds is a matter of particular importance that every business owner faces. The choice of a bank in this case can significantly affect the level of asset protection. Depending on the goals pursued by the client, it is possible to open two types of accounts: current account and savings account. It should be note that today only few banks are ready to consider foreign clients for the purpose of current accounts opening. In this regard, accounts in non-banking payment institutions (Electronic Money Institutions, Payment Institutions) are becoming increasingly popular, which, due to their functionality, can fully replace ordinary banks. Savings accounts It should be note that today only few banks are ready to consider foreign clients for the purpose of current accounts opening. In this regard, accounts in non-banking payment institutions (Electronic Money Institutions, Payment Institutions) are becoming increasingly popular, which, due to their functionality, can fully replace ordinary banks. Today, the process of personal account opening is no less complicated than the process of opening a corporate account. Banks carefully check the candidacy of potential clients within the KYC procedure. Among others, the key aspects of the research are the source of origin of clients’ funds, its history, reputation, etc. If you are interested in opening of a personal current or savings account, please contact our specialists, we will be happy to help you with your query. Leave Us A Message And we wil get back to you Contact Us Other services Leave a request for a service The accumulated experience and tracking of future changes in this area allow us to be proactivefor our clients and develop the most adapted business structures to modern conditions. By submitting this form, you hereby authorize Inteliumlaw to process your information for the purpose of addressing your inquiry. You retain the right to revoke this consent at any point. For further details, please review our Privacy Policy.

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International Corporate Structuring

International Structuring

International structuring is of great importance for any business, both already functioning and planning to enter the international market. The correct organization of the legal structure and rational tax planning is the initial and basic guarantee of successful business development in the future. Given the current global trends, among the rest of the automatic exchange, counteracting the erosion of the tax base, the shift of profits, and other measures to combat tax evasion, the competent structuring of business in world markets becomes even more important. The support of professionals in this area will be of great importance for the adaptation of businesses to various innovations, ensuring their continuous operation and protecting interests in the new realities. The most optimal solution is to entrust the planning to a specialized law firm. Key factors International structuring is an extensive set of legal processes. All of them contribute to protecting business assets, minimizing legal and tax risks, using the most rational ways in the field of taxation, and solving other tasks set by the client. The necessary solutions are developed using legally acceptable mechanisms and tools. Specialists use the available tools in such a way as to ensure the maximum effectiveness of the measures taken to protect and optimize the business of clients. A full international structuring in most cases consists of the following steps: First, a meeting or call is scheduled with the client. During it, we discuss the initial data, as well as determine the goals and objectives. Our experts analyze the provided description, work out all the preliminary options and possibilities. Further, communication with the client continues to clarify the details and features, preliminary agreement on possible jurisdictions and mechanisms for their further more detailed consideration by professionals. A memorandum is being prepared outlining the structuring options. Next, the specialists present the options developed in the memorandum to the management of our client. After that, we further discuss and agree on the most suitable options. At the final stage, our company provides full support for the implementation of the structuring option, and individual restructuring elements chosen by the client. Benefits A number of positive factors influence the demand for the services of our lawyers. Our specialists have significant experience in international planning, they know the practical features and all the possible difficulties that may arise in this area. Inteliumlaw constantly monitors current trends, planned transformations and innovations in the field of international taxation. Thanks to the accumulated experience and monitoring of upcoming changes in this area, we work proactively for our clients and develop structures for businesses that are most adapted to modern conditions. Our offer Our specialists provide full support for the process of international corporate structuring. Inteliumlaw provides a wide range of services in this area. Specialists conduct preliminary consultations on optimizing the structure of groups of companies. At the request of our client, we prepare legal opinions on the peculiarities of the work of jurisdictions and taxation in certain countries. Our company develops optimal business structures according to customer requests. We take into account the peculiarities of the business and the priorities set. We also analyze the current structures of groups of companies and their restructuring. Inteliumlaw provides full legal support for the implementation of the developed business structure, as well as the inclusion of individual companies in the group structure. In addition, our client can receive a complete implementation of the international business structuring project with professional support at every stage – from consulting to the full implementation of the project. Other services Leave a request for a service The accumulated experience and tracking of future changes in this area allow us to be proactivefor our clients and develop the most adapted business structures to modern conditions. By submitting this form, you hereby authorize Inteliumlaw to process your information for the purpose of addressing your inquiry. You retain the right to revoke this consent at any point. For further details, please review our Privacy Policy.

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Legal Due Diligence

Due Diligence and Transaction Structuring

Legislation in the country is constantly changing. New concepts are added, existing norms are changed and obsolete ones are removed. Businesses do not always have time to keep track of changes. After all, it is important for entrepreneurs to carry out activities strictly in the legal field. Keeping an experienced lawyer on staff who monitors the compliance of the company’s activities with changes made to the legislation is not always profitable and expedient. It is often much more efficient to entrust this procedure to third-party companies. Our experts perform a legal due diligence with the following recommendations to address the identified issues. What does a legal audit examine? A legal audit of an enterprise is a set of measures that allow checking the compliance of a certain company’s activities with the current legislation of the country in which it operates. During the inspection, the following is studied: Why do you need legal business consulting? A legal audit of an enterprise is a set of measures that allow checking the compliance of a certain company’s activities with the current legislation of the country in which it operates. During the inspection, the following is studied: availability of necessary documents and their correctness; compliance of the legal side of the activity with the legislation; probability of bringing employees to justice for improper documentation; document flow. Due Diligence is complicated However, the legal audit of the company is not limited to the research of only one area. This is a large-scale system audit that covers all aspects of the company’s operations. Specialists analyze compliance of each aspect with legal norms and established corporate standards. The key purpose of this procedure is to identify errors, inconsistencies, inaccuracies and deficiencies. In addition, lawyers develop recommendations to eliminate identified shortcomings. All actions are aimed at eliminating the risks of unplanned losses. Due to the timely conduct of a legal audit of a business, it will be possible to avoid fines and sanctions from the tax service and other regulatory bodies. The audit minimizes the risks of losses associated with incorrect actions of counterparties. It also allows you to avoid the possible costs of court proceedings in the case of prosecution of employees or managers of the company. When are legal audit services needed? Usually, Legal Due Diligence is conducted before the merger of two companies. Thanks to this, it becomes possible to assess the legality and truthfulness of the information provided by partners. It is also important to carry out the procedure for attracting investors. This makes it possible to understand the expediency of investing funds and significantly improves the company’s reputation. This procedure is often carried out before the sale of the company. In this way, the real state of affairs in the company is shown to the potential buyer. The best option is to conduct an audit from the time the company was founded. And you need to do it regularly. After all, thanks to this, the entrepreneur will be able to avoid possible penalties from the regulatory authorities. Depending on the customer’s requirements, a complex audit or an inspection of a separate field of activity is carried out. Our company provides legal audit services in the following areas: checking the corporate situation; audit of commercial activity; management and personnel systems; contractual activity; real estate and assets of the company. During the audit, specialists perform extensive and painstaking work. In addition to primary analytics, they perform a review of each area of activity. They have to check literally every document and business process. The audit involves studying the following: company assets; financial flows; sources of funds; requirements for partners; tax issues; statutory documentation. Legal audit services Our company offers services for conducting legal audits of businesses/projects in various countries of the world. Highly qualified specialists will carefully and quickly perform all the necessary analytics. At the same time, our work will in no way interfere with the activities of your company/project. That is, the customer/object of inspection will not have to lose his profit during the inspection of the business. Trusting our specialists, you invest in the future of your business and its stable operation. Leave Us A Message And we wil get back to you Contact Us Other services Leave a request for a service The accumulated experience and tracking of future changes in this area allow us to be proactivefor our clients and develop the most adapted business structures to modern conditions. By submitting this form, you hereby authorize Inteliumlaw to process your information for the purpose of addressing your inquiry. You retain the right to revoke this consent at any point. For further details, please review our Privacy Policy.

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Leave a request for a service

The accumulated experience and tracking of future changes in this area allow us to be proactive
for our clients and develop the most adapted business structures to modern conditions.

By submitting this form, you hereby authorize Inteliumlaw to process your information for the purpose of addressing your inquiry. You retain the right to revoke this consent at any point. For further details, please review our Privacy Policy.

LEAVE A REQUEST FOR A SERVICE

The accumulated experience and tracking of future changes in this area allow us to be proactive
for our clients and develop the most adapted business structures to modern conditions.

By submitting this form, you hereby authorize Inteliumlaw to process your information for the purpose of addressing your inquiry. You retain the right to revoke this consent at any point. For further details, please review our Privacy Policy.