EUROPEAN COUNTRIES
Company Formation in Hungary
Up-to-date guide to company formation in Hungary for foreign entrepreneurs: 9% corporate tax, Kft setup with HUF 3 million capital, required documents, itemised costs, taxes, bank account and residence permit rules.
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Company formation in Hungary is one of the most cost-effective ways to enter the EU single market, thanks to the European Union's lowest corporate tax rate of 9%. The most common entity, the Kft (limited liability company), requires minimum share capital of HUF 3,000,000 (about EUR 7,500-8,000) and can be registered in 5-10 business days once documents are ready. Foreign investors can own 100% of the company, appoint a non-resident director and complete the entire process remotely by power of attorney.
The difference is tangible: on EUR 100,000 of annual profit, the total burden in Hungary including local business tax is about EUR 11,000, compared with roughly EUR 30,000 in Germany or EUR 25,000 in Türkiye. Below you will find everything that applies under current legislation, from company types and required documents to an itemised budget and residence permit rules, with links to the official sources.
Why Does Company Formation in Hungary Make Sense?
Four concrete factors make Hungary attractive for foreign entrepreneurs:
- 9% corporate income tax (TAO). The lowest rate in the EU; Bulgaria charges 10%, Ireland 12.5% and Germany about 30%. The rate is flat and does not increase with profit.
- EU and Schengen membership. A Hungarian company sells goods and services to 27 member states without customs barriers and trades on Amazon, Allegro or eMAG as a domestic EU seller.
- Low set-up and running costs. A registered seat costs HUF 30,000-80,000 per month and accounting HUF 50,000-200,000 per month, roughly a third of Western European levels.
- Treaty network. Hungary has double tax treaties with more than 80 countries, no withholding tax on dividends paid to foreign companies and a favourable holding regime for participation gains.
The disadvantages should be stated just as clearly: the standard VAT rate of 27% is the highest in the EU, Hungarian is the official language, and incorporation documents must be prepared by a Hungarian attorney. All three are manageable with proper planning, as the sections below show. To see Hungary side by side with other EU options, read our guide to the best countries to start a business in Europe.
Which Type of Company Should You Set Up in Hungary?
The vast majority of foreign investors choose the Kft. The other forms exist for specific situations.
| Entity | English equivalent | Minimum capital | Liability | Best suited for |
|---|---|---|---|---|
| Kft (Korlátolt Felelősségű Társaság) | Limited liability company | HUF 3,000,000 | Limited to capital | Trading, services, e-commerce, holding; the standard choice for foreign investors |
| Zrt (Zártkörűen Működő Rt.) | Private company limited by shares | HUF 5,000,000 | Limited to capital | Larger structures expecting investors and frequent share transfers |
| Nyrt (Nyilvánosan Működő Rt.) | Public limited company | HUF 20,000,000 | Limited to capital | Companies planning a stock exchange listing |
| Bt (Betéti Társaság) | Limited partnership | None | At least one partner unlimited | Very small local businesses; not recommended for foreigners |
| Kkt (Közkereseti Társaság) | General partnership | None | All partners unlimited | Rarely used |
| Fióktelep | Branch of a foreign company | None | Parent company liable | Temporary operations of a foreign parent |
| Egyéni vállalkozó | Sole proprietorship | None | Unlimited | Individuals resident in Hungary |
The Kft has two practical advantages. First, it can be founded by a single member (egyszemélyes Kft), and that member can be an individual or a foreign company. Second, the HUF 3 million does not have to be paid in full at incorporation: the founding document sets a payment schedule, the capital is not blocked at the bank and can be spent on company expenses. The only consequence is that no dividend can be paid until the capital is fully contributed.
Branch or Kft?
If your existing company only needs to run a single project or a temporary operation in Hungary, a branch (fióktelep) may be enough. But a branch has no separate legal personality, the parent is liable for all its debts, and Hungarian banks apply heavier scrutiny to branch accounts. For lasting trade, marketplace sales or holding purposes, a Kft is always the more robust structure.
What Documents Do You Need to Register a Company in Hungary?
The list you need to prepare at home is short; the Hungarian attorney handles most of the paperwork.
For shareholders and the managing director
- Valid passport copy (notarised)
- Proof of address (utility bill or residence certificate issued within the last 3 months)
- Tax identification number from your home country
- For corporate shareholders: certificate of incorporation, register extract and signatory list (apostilled, with certified Hungarian translation)
- If you will not travel: power of attorney for the attorney (notarised and apostilled)
For the company
- Company name ending in "Kft." (check availability on e-cegjegyzek.hu)
- Registered seat (székhely): a lease or a registered office service agreement
- Main activity code (TEÁOR, the Hungarian version of the EU NACE classification)
- Capital structure and shareholding ratios
- Appointment of the managing director (ügyvezető): can be a foreign national with no Hungarian residence requirement
- Ultimate beneficial owner (UBO) declaration
With this information the attorney drafts the articles of association (társasági szerződés, or alapító okirat for a single-member company), the list of members, the specimen signature and the proof of right to use the registered seat. There is no separate notarial stage: under Hungarian law the attorney's countersignature is sufficient.
How Does Company Registration in Hungary Work Step by Step?
- Preparation and name check (1-2 days). Company name, activity code, capital structure and registered seat are finalised and the name is pre-checked in the register.
- Document preparation abroad (3-5 days). Passports and the power of attorney are notarised, apostilled and translated by a certified translator.
- Drafting of incorporation documents by the attorney (2-3 days). The articles and annexes are prepared and signed by the members electronically or via the power of attorney.
- Electronic filing with the Court of Registration (Cégbíróság), 1-3 business days. Under the simplified electronic procedure (egyszerűsített cégeljárás) registration is typically decided within one business day; a Kft is exempt from the registration duty and publication fee. The company registration number and tax number (adószám) are issued in the same decision.
- Tax authority (NAV) registration, automatic. The tax number, VAT status and the EU VIES number are created together with registration. A technical user is set up in the NAV Online Számla system for invoicing.
- Bank account opening (2-7 days). A corporate account with a Hungarian IBAN must be opened right after registration. OTP, K&H, Erste, Raiffeisen and MBH are the usual choices; some banks allow remote onboarding via video KYC. The share capital is paid into this account.
- Accountant appointment and first filings. A registered accountant (mérlegképes könyvelő) is engaged for monthly or quarterly VAT returns, the annual corporate tax return and the local business tax return. If staff will be hired, the company is registered as an employer.
Handled fully remotely, the whole process takes 2-3 weeks including apostille and translation; if you travel to Hungary, 5-10 business days.
How Much Does Company Formation in Hungary Cost?
A realistic budget is EUR 2,500-4,500 for the incorporation itself and EUR 3,000-6,500 for first-year running costs. The share capital (HUF 3 million) is not an expense but equity the company can use.
| Item | Amount (approx.) | Note |
|---|---|---|
| Minimum share capital (Kft) | HUF 3,000,000 ≈ EUR 7,500-8,000 | Stays in the company account and can be used for expenses |
| Attorney and incorporation advisory | EUR 1,000-2,000 | Includes the mandatory attorney countersignature; no notary needed |
| Court registration duty and publication fee | HUF 0 | Kft is exempt under the simplified electronic procedure |
| Notarisation, apostille and certified translation abroad | EUR 150-400 | Depends on the number of documents |
| Registered seat (annual) | HUF 360,000-960,000 ≈ EUR 900-2,400 | HUF 30,000-80,000 per month |
| Accounting (annual) | HUF 600,000-2,400,000 ≈ EUR 1,500-6,000 | HUF 50,000-200,000 per month depending on volume |
| Bank account fees (annual) | HUF 50,000-100,000 ≈ EUR 125-250 | Lower with digital banks |
| Chamber of commerce contribution | HUF 5,000 per year | Paid at registration and annually |
| Statutory audit | Not required for small Kft | Mandatory above HUF 300 million revenue or 50 employees |
Figures use current exchange rates (EUR 1 ≈ HUF 390-400); attorney and accounting fees vary by provider. If the managing director will be insured in Hungary, add the minimum monthly social contributions (about HUF 100,000 per month). World Company Setup prepares a fixed quote based on your business model during the initial consultation.
What Taxes Does a Hungarian Company Pay?
The tax system is the main reason to set up a company in Hungary, but the picture is broader than the 9% headline rate.
| Tax | Current rate | Notes |
|---|---|---|
| Corporate income tax (TAO) | 9% | Flat rate; losses carried forward 5 years; extra allowances for R&D and IP income |
| Local business tax (HIPA) | 0-2% | Set by the municipality; 2% in Budapest; base is net revenue less certain direct costs |
| VAT (ÁFA) | 27% / 18% / 5% | 27% standard; reverse charge on intra-EU B2B sales; exemption available below HUF 20 million annual turnover |
| Small business tax (KIVA) | 10% | Optional alternative to TAO; entry thresholds raised to HUF 6 billion revenue and 100 employees; attractive for labour-intensive businesses |
| Dividends to corporate shareholders | 0% | Hungary levies no withholding tax on dividends paid to foreign companies |
| Dividends to individual shareholders | 15% | Personal income tax (SZJA); reduced or credited under double tax treaties |
| Employer social contribution tax (szocho) | 13% | On gross salary |
| Employee deductions | 15% + 18.5% | Personal income tax plus social security contribution |
The latest amendments favour small companies: the VAT exemption threshold rose from HUF 18 million to HUF 20 million (HUF 22 million in 2027 and HUF 24 million in 2028), the KIVA entry thresholds doubled, and the limit for monthly corporate tax advance payments rose from HUF 5 million to HUF 20 million, so most new Kfts pay quarterly. The simplified reporting threshold also rose to HUF 360 million net revenue. The minimum wage is HUF 322,800 and the guaranteed minimum wage for skilled positions HUF 373,200.
Two caveats. Groups with consolidated revenue above EUR 750 million fall under the OECD global minimum tax (15%), so the 9% advantage is designed for SMEs and mid-sized companies. And moving the registered seat to a small municipality with a low HIPA rate, without real activity there, can be treated as an artificial arrangement by NAV. Structuring the group correctly from the start is where international tax advisory pays for itself.
Does Company Formation in Hungary Give You a Residence Permit?
No; incorporation alone does not grant residence, but it creates the legal basis for an application. Under the immigration act in force since 2024, third-country nationals have three main routes. Applications are filed through the Enter Hungary portal with the National Directorate-General for Aliens Policing.
Guest self-employment residence permit (vendég önálló vállalkozó). Available to owners or managing directors of a Hungarian company. Issued for 1 year and extendable for 2 more; a business plan is required and the applicant must show that the company is genuinely active and that their presence in Hungary is necessary for it. Holders submit quarterly income reports. Family reunification becomes possible after the first year, and after 5 years of continuous residence the EU long-term residence card can be obtained.
Guest investor permit (vendégbefektető). A 10-year residence permit for investing EUR 250,000 in a Hungarian real estate fund or EUR 500,000 in residential property; no minimum-stay requirement, family included. Combined with a Kft it delivers both the right to live in the EU and a low-tax trading structure. Compare it with other programmes on our Golden Visa page.
Residence permit for employment. The third option for a foreign national who will work as a salaried managing director; the gross salary is expected to exceed the minimum wage (HUF 322,800, or HUF 373,200 for skilled positions).
Is Opening a Corporate Bank Account in Hungary Difficult?
Opening the account is the most time-consuming step, because EU anti-money-laundering rules impose extensive due diligence on banks. For foreign-owned companies, banks typically ask for a business plan, expected transaction volumes, main customer and supplier countries and proof of source of funds. A genuine registered seat, evidence of real activity in Hungary (contracts, lease, staff) and a coherent business story noticeably improve approval rates.
Alongside traditional banks, licensed e-money institutions such as Wise Business and Revolut Business issue Hungarian or EU IBANs within days; however, some marketplaces and public bodies still expect a local bank IBAN. For most clients the most resilient set-up is a local bank account plus a multi-currency digital account. See our international bank account opening service for the process and document list.
Hungary vs Estonia vs Dubai: Which Jurisdiction Fits?
The decision depends on where your customers are, how you plan to distribute profits and whether you need a physical presence.
| Criterion | Hungary (Kft) | Estonia (OÜ) | Dubai (free zone) |
|---|---|---|---|
| Corporate tax | 9% | 0% on retained profit, 22% on distribution | 0% on qualifying income, otherwise 9% |
| EU single market | Yes | Yes | No |
| Minimum capital | HUF 3 million (~EUR 7,500) | EUR 0.01 | Depends on the zone |
| Remote incorporation | Yes, by power of attorney | Yes, via e-Residency | Yes |
| VAT | 27% | 24% | 5% |
| Residence route | Application through the company | None (e-Residency grants no residence) | Investor or employee visa |
| Best profile | Physical trade into the EU, Central European distribution, low-tax holding | Digital services, SaaS, profit reinvestment | Gulf and Asia trade, tax-free income |
For companies that sell physical goods, plan a warehouse or team in the EU and distribute profits regularly, Hungary usually delivers the lowest total tax burden. Digital businesses that reinvest profits for years may prefer company formation in Estonia, while businesses trading outside the EU may be better served by company formation in Dubai.
How World Company Setup Handles Your Hungarian Kft
The process starts with a free consultation in which we review your business model, target market and profit distribution plan and confirm together whether a Hungarian Kft or another jurisdiction is the right fit. Our team then coordinates notarisation, apostille and translation in your home country, while our partner attorney in Budapest drafts the incorporation documents and files them with the Court of Registration. After registration, the bank account application, NAV e-invoice activation and accountant appointment are handled by one team, and the residence permit application can continue from the same file if you wish.
We have served more than 8,000 clients in over 50 countries. For Hungary, our goal is to hand over an operational Kft with an open bank account within 3 weeks, without you having to travel. Other European jurisdictions can be evaluated in the same consultation.
Get a fixed quote for your Hungarian Kft, tailored to your business model.
Get a Free Quote and ConsultationOfficial Sources and Legal Notice
The rates and thresholds on this page are based on the following official sources:
- NAV (National Tax and Customs Administration): corporate tax, VAT and KIVA rates and current thresholds
- e-cégjegyzék (Hungarian Company Register): name availability and registration records
- Nemzeti Jogszabálytár (National Legislation Database): Civil Code company law provisions, Accounting Act, Company Registration Act
- National Directorate-General for Aliens Policing and Enter Hungary: residence permit types and requirements
- HIPA (Hungarian Investment Promotion Agency): investment incentives and business environment data
The information on this page reflects legislation in force at the time of publication and does not constitute legal or tax advice. Schedule a free consultation with World Company Setup advisors before making an investment decision.
FREQUENTLY ASKED QUESTIONS
Company Formation in Hungary frequently asked questions.
Yes. There is no citizenship, residency or local-partner requirement; a Kft can be 100% foreign-owned by individuals or companies from any country. The only mandatory element is that the incorporation documents are drafted and countersigned by a Hungarian attorney.
Budget EUR 2,500-4,500 for incorporation services (attorney, apostille, translation, advisory) and EUR 3,000-6,500 for first-year registered seat and accounting. The HUF 3 million minimum capital is paid into the company's own account and remains available to the business.
Court registration takes 1-3 business days under the simplified electronic procedure; including the bank account, 5-10 business days in total. If handled remotely by power of attorney, allow 2-3 weeks for apostille and translation.
A flat 9%, the lowest in the European Union. Municipalities add a local business tax (HIPA) of 0-2%; in Budapest the combined burden is roughly 11%.
Yes. With a notarised and apostilled power of attorney, a Hungarian attorney completes the entire registration. Some banks open accounts via video identification; where they do not, a single visit to Budapest after registration is enough.
Not automatically. As owner or managing director you can apply for the guest self-employment residence permit (1 year + 2-year extension); a 10-year guest investor permit is available with a EUR 250,000 fund investment.
Only for sales to Hungarian consumers. B2B sales to companies in other EU states fall under the reverse-charge mechanism, exports outside the EU are zero-rated, and small companies with annual turnover under HUF 20 million can opt for VAT exemption.
Hungary levies no withholding tax on dividends paid to foreign corporate shareholders. Dividends paid to individuals are subject to 15% personal income tax, reduced or credited under Hungary's network of more than 80 double tax treaties.
Yes. Under the Hungarian Accounting Act, books must be kept by a registered accountant in Hungary and every invoice is reported in real time to the NAV Online Számla system. World Company Setup provides this through its partner accounting office in Budapest.
No. The founding document can set a payment schedule for the HUF 3 million; the capital is not blocked and can be used for company expenses. Dividends cannot be distributed until the capital is fully paid in.
CLIENT REVIEWS
What do our clients say about us?
Experiences shared by clients whose company formation and corporate processes we have managed across multiple jurisdictions.
“The World Company Setup team was a huge help in setting up my company in Estonia and provided excellent service. They guided me in detail at every step and helped us complete the bureaucratic procedures quickly and smoothly. Thanks to their professionalism and customer-focused approach, the whole process was far easier and more efficient. I would absolutely recommend them to anyone looking to set up a company in Estonia. (Translated from Turkish)”
“From start to finish they managed a difficult and demanding process perfectly. They have a very experienced team — congratulations. The right firm for setting up a company abroad and handling every step correctly. I definitely recommend them. (Translated from Turkish)”
“Throughout my company formation in Dubai — from the decision stage all the way to the post-setup accounting work — it meant a great deal to work with a team that inspired confidence at every stage and patiently guided me even when I asked the same questions more than once. I recommend them to everyone with complete peace of mind. (Translated from Turkish)”
“I would like to thank the entire team, and especially Mr Turgut and Ms Gülhan, for the care and attention they showed throughout our company formation process, which let us complete everything quickly and without a single problem. (Translated from Turkish)”
“The support was just excellent The support was just excellent. Wr had a complicated case. A Holding. Companies in different countries and through their wide network they could help us out and establish a company In Dubai. Thank you”
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“High Quality The operations proceeded as initially described, without any unexpected issues or surprises.”