Hungary remains one of the most attractive places in the EU to run a company: incorporation is fast and cheap, and the 9% corporate income tax rate is the lowest in the Union. A well-prepared limited liability company (Kft.) can be registered in as little as one working day, and the simplified procedure is duty-free. Here is how it works – and what to watch out for afterwards.
Choosing the company form
- Kft. (limited liability company): the standard choice. Members’ liability is limited to their contribution; minimum registered capital is 3 million HUF (roughly 7,500 EUR), which can include in-kind contributions and becomes the company’s working capital, not a lost cost.
- Bt. (limited partnership): no capital minimum, but the general partner is liable with their entire private wealth – suitable mainly for small family businesses.
- Zrt. (private company limited by shares): for larger structures and investor involvement; minimum capital 5 million HUF.
The incorporation process
Legal representation is mandatory in Hungarian company procedures: the attorney drafts and countersigns the deed of foundation, performs the statutory client identification, and files everything electronically with the company court. The tax number is issued automatically in the same one-stop procedure. Using the statutory template documents, registration is typically completed within one working day, and the simplified procedure is exempt from duty and publication fees – your only cost is the attorney’s fixed fee.
Foreign owners and directors
Hungarian companies can be 100% foreign-owned, and directors need not be Hungarian residents. Two practical points: a foreign officer without a Hungarian address must appoint a delivery agent (kézbesítési megbízott) in Hungary to receive official mail – this can be arranged through my office – and the incorporation itself can be completed remotely, with consultations by video call in English. Together with my partner accounting firm, tax registration and bookkeeping are handled under one roof.
After incorporation: the 30-day amendment rule
Any change affecting the registered company data – registered seat, managing director, transfer of a business quota (with attention to the other members’ pre-emption rights), capital increase, name or main activity – must be filed with the company court within 30 days, again with mandatory legal representation. Missing the deadline can trigger a supervisory procedure, fines, and in persistent cases even compulsory strike-off. Not every change needs a court filing, however: secondary activity codes, for instance, are reported only to the tax authority – at the consultation we always clarify what genuinely requires an attorney.
The most common founding mistakes I see: a 50–50% ownership split with no deadlock mechanism; no shareholders’ agreement covering exit, dispute or divorce scenarios; and treating the legal and the tax setup as separate questions. All three are cheap to prevent at incorporation and expensive to fix later.
Questions about your own case?
I advise clients in English and Hungarian, in person in Győr and Mosonmagyaróvár or by video call from anywhere in the world. The 20,000 HUF consultation fee is fully credited against my fee if you retain me.
This article provides general information and does not constitute legal advice. Fees, duties and thresholds are set by law and change from time to time; every case is different – please contact me about your specific situation.