Company Registration of a Corporation in Hungary

1. Types of Business Entities in Hungary

• Foreign investors can choose from several business structures, including:
  • 1.1. Limited Liability Company (Kft.)
    Most common business entity.
    • Requires a minimum share capital of HUF 3 million (~EUR 7,800).
    • Owners’ liability is limited to their capital contribution.
  • 1.2. Private Company Limited by Shares (Zrt.)
    Suitable for larger businesses.
    • Minimum share capital: HUF 5 million (~EUR 13,000).
    • Shares are not publicly traded.
  • 1.3. Public Company Limited by Shares (Nyrt.)
    
    • Suitable for stock exchange listings.
    • Minimum share capital: HUF 20 million (~EUR 52,000).
  • 1.4. Branch Office (Fióktelep)
    • A foreign company can establish a branch in Hungary.
    • The foreign parent is liable for the branch’s activities.
  • 1.5. Representative Office (Képviseleti Iroda)
    • Cannot conduct business activities; only market research and promotion.

2. Company Registration Process in Hungary

• Step 1: Choose a Company Name
  • The name must be unique and comply with Hungarian company naming regulations.
  • Availability can be checked with the Hungarian Company Registry.
    • Step 2: Prepare Company Documents
      • Articles of Association (signed by a Hungarian lawyer).
      • Founders’ details (passport, address, and company ownership structure).
      • Declaration of registered office and business premises.
    • Step 3: Open a Bank Account
      • A Hungarian corporate bank account is required.
      • Share capital must be deposited before registration.
    • Step 4: Register with the Court of Registration
    • Submission through an electronic system managed by the Hungarian Ministry of Justice.
    • Processing time: typically 1-3 business days.
  • Step 5: Obtain a Tax Number and EU VAT Registration
    • The Hungarian National Tax and Customs Administration (NAV) issues the tax number.
    • EU VAT registration is required for businesses trading within the EU.
  • Step 6: Register for Social Security and Employment Tax
    • Companies hiring employees must register with the Hungarian Social Security system.
  
  
  

  3. Corporate Taxation in Hungary (2025)

  • Corporate Income Tax (CIT)
    • 9% (one of the lowest rates in the EU).
  • Value Added Tax (VAT)
    • 27% standard rate (highest in the EU).
  • Reduced rates: 5% and 18% for specific goods and services.
    • Local Business Tax
    • 0% to 2%, depending on the municipality.
  • Dividend Tax
    • 15% withholding tax (unless reduced by a double tax treaty).
  
  
  

  4. Employment and Payroll Taxes

  • Employer Contributions
    • 13% Social Contribution Tax.
  • Employee Contributions
    • 18.5% Social Security Contributions.
    • 15% Personal Income Tax (PIT).
  
  
  

  5. Residency and Work Permits for Foreign Investors

  • EU/EEA nationals can freely establish a business.
    • Non-EU investors may need a residence permit for business activities.
    • The Hungarian Golden Visa program allows residence permits for high-value investors.
  
  
  

  6. Business Incentives and Grants

  • EU-funded grants for startups and innovation.
    • Tax benefits for R&D and technology investments.
    • Special economic zones offer tax advantages.
  
  
  

  7. Compliance and Reporting

  • Annual financial statements must be submitted to the Hungarian Tax Authority.
    • Audits are required for larger companies (based on revenue and employee thresholds).
  
  
  

  Conclusion

  Hungary continues to offer an attractive environment for foreign investors in 2025, with low corporate tax, full foreign ownership rights, and a fast registration process.
  Understanding legal and tax requirements ensures smooth business operations.
  For legal and tax assistance, consulting a Hungarian accountant or legal expert is recommended.