Setting up a company in Hungary

Setting up a company in Hungary costs €1500 + VAT.

Why start a business in Hungary?

Hungary is one of the most advanced economies in Central Europe. As a member of the European Union, it is the gateway to a market of more than 500 million people, 250 million of whom live within a 1000 km radius.

Hungary has a number of fast-growing sectors: automotive, life sciences, pharmaceuticals and medical technology, electronics, IT, R&D, renewable energy, supply chain management and distribution logistics. Setting up a company in Hungary is much smoother and clearer with the help of our LC Service Centre specialists: we will advise you on the right legal form to choose and how to comply with all the relevant requirements.

Hungary has the lowest corporate tax rate in the EU: 9%. Dividends paid to owners in Hungary and abroad are not taxed. There is also a local business tax. It is collected on the gross profit of the company, i.e. the income after deduction of the cost of goods sold and services rendered.


Currently, different types of business forms can be set up in Hungary:

– A company limited by shares (limited liability company - Kft)

A company whose initial capital is made up of contributions of a predetermined amount. The members’ obligations to the company are limited to their contributions to the capital and to any other contributions provided for in the statutes. The members are not liable for the company’s obligations. The minimum share capital is HUF 3 000 000 (approximately 8300€). Additional capital may be placed in a ‘capital reserve’. The establishment of a limited liability company is the most popular legal form, given the simplicity of incorporation, relatively low capital requirements and liability requirements.

– General partnership (general partnership - Kkt)

This form of enterprise is usually set up by individuals who wish to engage in agricultural activities. The liabilities of the members are unlimited, and the members of such a company are liable for any breach of obligations with all the assets of the members and the assets of the company (joint and several liability). There is no minimum capital and at least one member is required to set up such a company.

– Limited Liability Company - Bt

At least two founding members are needed to set up a company. The liability of at least one shareholder is unlimited and the liability of at least one shareholder is limited to the amount of his capital contribution.

Branch (Fióktelep)

This form of business may be suitable for foreign companies wishing to open an office in Hungary. A branch is not granted the status of a “legal entity” and may operate in Hungary as a sub-entity of the founder. Registration with the Commercial Court is required and a manager must be appointed for the branch, who may be an employee of any nationality or a Hungarian citizen/resident. Branches have a number of tax and accounting specialisations which require different treatment from the general administration.

How is a company set up in Hungary?

Registering a company in Hungary is more convenient than ever – once selected, we offer our services to clients remotely, with professionals sending all the documents. The registration itself usually takes 1-3 weeks.

The prospective entrepreneur will receive a questionnaire and a list of documents to fill in. We will liaise with the notary and, if necessary, ask you for further details.

The minimum initial capital is 3 000 000 HUF, which is about 8300€. The capital contribution can be made in cash or in kind (after incorporation).

Setting up a company in Hungary involves several types of taxes:


In Hungary, the income tax rate is 15%, but if shareholders live abroad, the dividend tax is usually adjusted to a lower threshold of 10%.


The VAT rate is 27%. Some products (e.g. certain foodstuffs) are subject to a reduced VAT rate of 18%. Also, an 18% VAT rate applies to commercial accommodation services and admission services to music and dance events.


Dividend income taxed at a 15% rate


One of the advantages of incorporating a Hungarian company is that the share capital does not need to be deposited in a bank and 100% of this capital can be spent on company-related expenses immediately after incorporation. The amount of share capital is HUF 3 000 000 (about 8300€). All related services (e.g. accounting services, registered office) can be deducted from the share capital, so that in case of a tax audit (which is common in the early years for foreign-invested companies) the authorities will investigate the location of the money. If the share capital has not been spent prior to the audit (on start-up costs or other reporting expenses such as salaries or office/material costs), it may be necessary to have the amount in cash or in a bank account.

It is also important to note that the country has the lowest corporate tax rate in the EU – 9%. As a result, Hungary has one of the highest levels of FDI in the region. Another aspect that makes Hungary a very attractive region for investment is its financial stability. The Hungarian financial system is one of the most developed in the region. Setting up a business in Hungary is also facilitated by government legislation, favourable investment policies and tax incentives.

Foreign investment and financial stability mean that setting up a business in Hungary is increasingly a choice for entrepreneurs to set up and expand their business.

LCPC aims to provide you and your business with high quality assistance. Setting up a company is one of the first steps in building your business, and we will help you along the way!

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