Introduction
Hungary, with its strategic location in Europe and business-friendly environment, offers a compelling proposition for entrepreneurs and businesses. This guide aims to provide a comprehensive overview of the company formation process in Hungary, its taxation system, and the numerous advantages it offers. This article will focus on the Hungary company formation process so you have all input you need to get to the next step.
Hungary Company Formation:Process
Name Check and Reservation: The first step involves ensuring the desired company name is available and reserving it.
Registration Application Submission: This application is submitted to the Company’s Court (Registry) in Hungary.
Government Fees for Registration: Mandatory fees are payable for the registration process.
Registration with Tax Authorities (NAV): It's essential to register the newly formed company with NAV, the Hungarian tax authority.
Company Seal Requirement: Obtaining a company seal is necessary for official documents.
Remote Company Registration: The process allows registration via Skype certification, taking approximately 7-10 days after receipt of all required documents.
Additional Services and Associated Costs
Legal Address Provision: A legal address for the company is provided for 1 year.
VAT Number Application: Assistance with applying for a VAT number.
EORI Number for International Trade: Essential for businesses engaged in international trade.
Document Delivery Service: A service for the delivery of official documents.
Accounting Services: Monthly charges based on transaction volume, with statutory accounts charged separately.
Taxation System in Hungary
Corporate Income Tax: Hungary offers one of the lowest corporate tax rates in Europe at 9%.
Dividend Payments: Exemption from tax for non-resident legal entities.
VAT: A standard rate of 27%, one of the highest in Europe.
Corporate Bank Account Opening
Requirement: Opening a local bank account is mandatory within 3 months of company registration.
Assistance with Bank Account Opening: Professional assistance is available for opening a bank account in Hungary.
Documents for Account Opening: Includes company documents, director’s passport, business description, and contact information.
Company Structure and Business Benefits
Eligibility: Open to foreign individuals, companies, social organizations, or entities. A single member can form a business.
Management: Only one managing director is required, who can be a non-resident.
Registration Timeline: The registration process is swift, often completed within a few days.
Share Capital Requirements: A minimum share capital, which is withdrawable post-incorporation.
EU VAT Number Eligibility: Enables immediate trade with EU companies at 0% VAT.
Business Environment and Advantages in Hungary
Business-Friendly Environment: Hungary’s EU membership and significant foreign capital inflow make it an attractive business destination.
Quality Infrastructure and IT Standards: Well-developed public road, fluvial infrastructure, and advanced IT infrastructure.
EU Benefits: Free movement of capital and labor within the EU, and ease of trading with EU Member States due to Customs Union membership.
Language and Accounting: English is widely used in business settings, and foreign language bookkeeping is available.
Conclusion
Setting up a company in Hungary presents a unique opportunity for business expansion within the EU, leveraging its low corporate tax rates, strategic location, and business-friendly environment. For expert guidance and assistance in navigating the Hungarian company formation process, contact us today.
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