Set up your business in Hungary (EU)

Hanjalka Csabai at December 02, 2021

Access the EU markets via tax-efficient structures form Hungary

DBH Finance provides comprehensive support for foreign individuals and companies intending to launch a business in Hungary. The detailed summary below maps the necessary steps to aid you as our prospective partner in the process.

Our team of accountants and tax experts provide complex advice and comprehensive assistance for our partners in choosing the appropriate legal and ownership structure for their business and running it efficiently, as well as advice on tax planning and accounting services.

Market research – selection of the scope of activities

Once you have decided what kind of business you want to start, it is important to know the market saturation in Hungary and in the EU.

Having got to know your team and your business objectives, we will conduct the necessary market research to identify the market niche in which you can maximize your success.

Legal form and ownership structure

After defining the scope of activities (main and auxiliary activities), the next step is to choose the company form and the form of taxation.

You have several options.

Company forms

  • General partnership (Kkt)
  • Limited partnership (Bt)
  • Limited liability company (Kft)
  • Public limited companies, Private limited companies (Nyrt, Zrt)
  • Joint company (Kv)
  • Sole proprietorship (Ev)
  • Individual company (Ec)

Choosing the appropriate company form for your business is imperative as it defines possibilities of your business activities and may require different extent of the contribution of assets.

International examples for Kft

  • English: Ltd, the Private Limited Company
  • German: GmbH, the Gesellschaft mit beschränkter Haftung
  • French: SARL, meaning Société avec Responsabilité Limitée

Tax methods

  • Corporate tax (TAO)
  • Flat-rate tax for small taxable enterprises (KATA)
  • Small business tax (KIVA)

In general, there is corporate taxation, compared to which there are simplifications under kata, and kiva, taxation

Company Name and Registered Office

Make sure that there is no Name Exclusivity – Your company name must be different from the name of any other registered company and be capable of being unique. If you want to check that the name you have chosen is taken, you can do so here: http://www.e-cegjegyzek.hu/

In addition to these, Name validity is also very important – The name of the company must not contain any term that could be misleading to others about its activities.

Pay attention to Nominability too! When setting up a company in Hungary, you should also be careful that the name of your company cannot consist solely of numbers or letters, and that it must also comply with Hungarian spelling rules.

Important! A company cannot be incorporated without a registered office in Hungary!

The company can have its registered office anywhere in Hungary and can be your own property or property owned by someone else. In this case, the owner of the property must be asked to provide a declaration of establishment authorising the use of his property as the company’s registered office.

In addition to the real estate, a registered office service may also be chosen in this case. 

Headquarters service provider: an external service provider provides everything that the authority expects from a seat, for example to receive official mail or even to maintain a customer service if necessary.

Designation of manager, beneficial owner

The company cannot be run by just anyone, there are criteria that have to be met.

You cannot be a director if you are under a tax disqualification or do not have a clean certificate of morality, and importantly you must be over 18 and of legal capacity.

In the case of a beneficial owner, there are no major restrictions, the only obstacle being a disqualification by the National Tax and Customs Office (NAV).

Documents

Once you have decided on the scope of activities, name and registered office of the company to be established, and have appointed the managing officers and the beneficial owner, the next step is to prepare the documents, for which it is highly recommended to consult a competent expert!

It’s easy to get lost in the details of setting up a company, so it’s not worth saving money on expert advice – you don’t want to miss a step in the process that could prevent you from getting your business off the ground.

Got questions? Contact us, our company is at your disposal!

https://dbh-group.com/en/contact

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