Hungary

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Hungary

General information about the jurisdiction

Hungary – is a state in Central Europe, famed by thermal springs and the Lake Balaton

The independence of Hungary was repeatedly attacked by the neighboring countries (Austria, USSR), but, in the end, the country asserted its right on independence. Hungary is the EU member since 2004.  

The state with stable economic and political conditions, beautiful nature and European standards of living may be a great place for starting business or even your second home. 

1. Legislation

Company activity in Hungary is regulated by Commercial Companies Act 1997.

2. Company formation

2.1 Types of companies

The legislator provides some corporate forms (partnerships, Limited Liability Company, public and private joint stock company etc), but the most preferable is the Limited Liability Company (Kft).

2.2. Private Limited Liability Company (Kft):

  • The minimum authorized capital – 500 000 Forints (approximately $2300). The share of each shareholder man not be less than 100 000 Forints. 
  • The authorized capital is divided into shares.
  • Director - at least 1, individual or legal person, no residency required.
  • Members – at least 1, individual or legal person, no residency required. Director and shareholder may be the same person. 
  • Secretary – not required, but the company needs to have a registered agent in Hungary.
  • Publicly available information: information about members and directors. The nominee service may be used. 
  • Company is obliged to keep and submit an annual financial report, to be audited.  
  • Registered office in Hungary is required (it may be agent's address). 

3. Taxes

Income tax – 10% (if the profit is not more than 500 million Forints, ≈ $2,3 millions), 19%  - if the profit is more.

Tax on dividends from foreign companies – 0% (under certain conditions).

VAT - 25% (for some goods – 0-18%)

4. Currency control

None

   5. Agreements on avoidance of double taxation

Estonia concluded more than 60 agreements on avoidance of double taxation, including Ukraine.