Establishing a company in Hungary offers foreign investors access to a stable economy and a legal system aligned with European Union standards. Located in Central Europe, Hungary’s business environment is welcoming, efficient, and cost-competitive within the EU. Many international entrepreneurs consider establishing a company in Hungary to benefit from low taxes, skilled labor, and strategic EU access. Establishing a company in Hungary is a strategic move for investors seeking access to the European Union with minimal tax burdens.
Limited Liability Company Kft. (Korlátolt Felelősségű Társaság) in Hungary
When establishing a company in Hungary, the Korlátolt Felelősségű Társaság (Kft.) is the most popular company type for foreign investors. It can be established by one shareholder and one director, with no restrictions on nationality. The minimum share capital required is 3,000,000 HUF, and the liability of shareholders is limited to their contributions. The simple and flexible structure makes the Kft. a preferred choice for small to medium-sized enterprises.
Joint Stock Company (Részvénytársaság Rt.) in Hungary
Joint Stock Company Rt. can be set up by one shareholder (foreginers can be shareholder) and minimum 5.000.000 HUF of share capital is reqiured to open Rt. İn Hungary. Joint Stock Companies can be private or public; in case of being public company it is listed at the Stock Exchange. The liability of the shareholders are limited by their shares at the company.
Representative and Branch Offices in Hungary
Representative and Branch Office in HungaryForeign companies can open its branch offices in Hungry as legal entity and can carry out commercial activities. Also foreign companies can open the representative (liaison offices) in Hungary but representative offices are not allowed to conduct commercial activities, they can only promote and introduce their parent companies.
Taxation in Hungary
Corporate income tax
Hungary offers one of the most competitive tax regimes in Europe. The corporate income tax rate has been reduced to 9% since 2017, providing a significant advantage for companies.
VAT Value Added Tax in Hungary
Hungary applies a standard VAT rate of 27%, with reduced rates of 5% and 18% for specific goods and services, making VAT planning an important part of business operations.
