{"id":38,"date":"2015-09-17T17:38:53","date_gmt":"2015-09-17T17:38:53","guid":{"rendered":"http:\/\/www.blog.whisperingtree.hu\/?p=38"},"modified":"2018-10-31T11:28:11","modified_gmt":"2018-10-31T10:28:11","slug":"company-registration-in-hungary","status":"publish","type":"post","link":"https:\/\/www.whisperingtree.hu\/blog\/company-registration-in-hungary\/","title":{"rendered":"The process and costs of starting a business enterprise in Hungary"},"content":{"rendered":"<p>If you are planning to <strong>register a company in Hungary<\/strong>, you may read this article before your final decision. It provides you a brief overview on company incorporation possibilities, process and costs.<\/p>\n<h1>Why to start a business in Hungary?<\/h1>\n<p>First of all, it is very important to clarify, the advantages of opening a company in Hungary.<\/p>\n<ul>\n<li><strong>9% corporate income tax.<\/strong><\/li>\n<li><strong>No dividend tax<\/strong> if dividend is paid to legal persons, non-legal organizations or to private persons not tax resident in Hungary.<\/li>\n<li>Low costs and salaries.<\/li>\n<li><strong>Cheap and very flexible company registration<\/strong> with relatively low initial capital necessary. <strong>No government fee is charged for company registration<\/strong>.<\/li>\n<li><strong>EU member country from 2004. Part of Schengen-zone <\/strong>(i.e. you can have EU VAT number + Schengen residency).<\/li>\n<li>Free economy, free money movement, safe country, good infrastructure, full on-line services, low crime rate.<\/li>\n<li>Wide variety of available banks.\u00a0Flexible bank account opening.<\/li>\n<\/ul>\n<h1>Basic legal definitions<\/h1>\n<p>Above all, one must understand the very basic legal terms about enterprises in Hungary. Here you may find some definitions you should review before going ahead with the article.<\/p>\n<ul>\n<li><strong>Unlimited liability:<\/strong> the owner of the enterprise, in proportion of his ownership, has full financial responsibility for all the debts of the company. I.e. his private holdings could also be subject of diligence.<\/li>\n<li><strong>Limited liability:<\/strong> the owner of the enterprise is only responsible for the liabilities of the company up to the capital he provided.<\/li>\n<li><strong>One-person company:<\/strong> there is only one owner of the company who, usually, also acts as a CEO.<\/li>\n<li><strong>Limitation in size:<\/strong> limitation of revenue, number of employees, registered capital or number of business relationships.<\/li>\n<li><strong>Private enterprise:<\/strong> an enterprise run by a private individual. Private enterprise is not a legal person.<\/li>\n<li><strong>Company:<\/strong> an enterprise that is a separate legal person.<\/li>\n<\/ul>\n<p><strong>State provided founding documents template:<\/strong> if a template determined by local legislation is applied during the company registration, the fees and time may be significantly reduced. The template allows little customization, however that usually satisfies the needs of most of our Clients<\/p>\n<h1>Options to be considered<\/h1>\n<p>You should be able to decide what type of business you would like to start with. Below is a very simplified and brief but well understandable comparison of the possible legal business forms in Hungary (not considering public limited liability company \u2013 NYRT \u2013 as an option).<\/p>\n<table style=\"height: 1132px;\" width=\"850\">\n<tbody>\n<tr>\n<td width=\"140\"><strong>Description<\/strong><\/td>\n<td width=\"119\"><strong>Private enterprise<\/strong><\/td>\n<td width=\"119\"><strong>Associations (KKT, BT)<\/strong><\/td>\n<td width=\"119\"><strong>Limited liability company (KFT)<\/strong><\/td>\n<td width=\"119\"><strong>Private limited liability companies (ZRT)<\/strong><\/td>\n<\/tr>\n<tr>\n<td width=\"140\">Legal person?<\/td>\n<td width=\"119\">No<\/td>\n<td width=\"119\">Yes<\/td>\n<td width=\"119\">Yes<\/td>\n<td width=\"119\">Yes<\/td>\n<\/tr>\n<tr>\n<td width=\"140\">Limited in size?<\/td>\n<td width=\"119\">No<\/td>\n<td width=\"119\">No<\/td>\n<td width=\"119\">No<\/td>\n<td width=\"119\">No<\/td>\n<\/tr>\n<tr>\n<td width=\"140\">Company registartion needed?<\/td>\n<td width=\"119\">No<\/td>\n<td width=\"119\">Yes<\/td>\n<td width=\"119\">Yes<\/td>\n<td width=\"119\">Yes<\/td>\n<\/tr>\n<tr>\n<td width=\"140\">Minimum registerd capital<\/td>\n<td width=\"119\">N\/A<\/td>\n<td width=\"119\">1 HUF<\/td>\n<td width=\"119\">3\u00a0000\u00a0000 HUF<\/td>\n<td width=\"119\">5\u00a0000 000 HUF<\/td>\n<\/tr>\n<tr>\n<td width=\"140\">Limited liability?<\/td>\n<td width=\"119\">No<\/td>\n<td width=\"119\">Unlimited for min. 1 of the owners<\/td>\n<td width=\"119\">Yes<\/td>\n<td width=\"119\">Yes<\/td>\n<\/tr>\n<tr>\n<td width=\"140\">Is there a one-person option?<\/td>\n<td width=\"119\">N\/A<\/td>\n<td width=\"119\">No<\/td>\n<td width=\"119\">Yes<\/td>\n<td width=\"119\">Yes<\/td>\n<\/tr>\n<tr>\n<td width=\"140\">Pros<\/td>\n<td width=\"119\">Easy and cheap to start and end, regulated by personal income tax law<\/td>\n<td width=\"119\">No minimal registered capital, legal person<\/td>\n<td width=\"119\">Legal person, very popular: this is considered as a \u201cstandard\u201d form in practice, no limitation. Can be applied for any goals. E.g. very big companies use this form<\/td>\n<td width=\"119\">Limited liability, can issue shares but that can only be distributed non-publically<\/td>\n<\/tr>\n<tr>\n<td width=\"140\">Cons<\/td>\n<td width=\"119\">Unlimited liability, not a legal person, has no separate CEO. Although it is unlimited in size but the taxation possibilities are restricted<\/td>\n<td width=\"119\">One of the owners has unlimited liability, only that owner is entitled to represent the company (i.e. act as a CEO)<\/td>\n<td width=\"119\">There is a minimal registered capital and the establishment costs more<\/td>\n<td width=\"119\">More restricted regulations on the operation, higher establishment costs<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<h1>The process of company registration<\/h1>\n<p>The basic process of company registration is as follows:<\/p>\n<h2>Step 1. Consulting with a local expert<\/h2>\n<p>Before take any steps, it is very advisable to visit a local expert. Our company can provide you the necessary information to make the right choice.<\/p>\n<h2>Step 2. Making the decision on the legal form of the enterprise<\/h2>\n<p>Depending the activity you would like to carry out, different legal form might be appropriate for you. However, as a rule of thumb, limited liability company is considered the most suitable company form in Hungary and it may be your best choice.<\/p>\n<h2>Step 3. Nominating the owners and the CEO, setting up the basic structure, decision of the place of signature<\/h2>\n<p>You may establish a one-person enterprise. If not, you will need at least one additional partner. You also need to decide the ownership ratio.<\/p>\n<p>The company founding documents may be signed in Hungary OR abroad by applying apostilled authorizations (power of attorneny).<\/p>\n<p>What is an apostille? An apostille is an authentication method that certifies the personality of the person who signs a certain document.<\/p>\n<p>How can I obtain it? By applying certified public notary in your current country OR by going to the Hungarian Embassy in your current country.<\/p>\n<p>You may read more about apostille on the <strong><a href=\"http:\/\/konzuliszolgalat.kormany.hu\/information-on-the-legalisation-procedure-of-documents-to-be-used-abroad\" target=\"_blank\" rel=\"noopener\">official site of the Hungarian Consular Services.<\/a><\/strong><\/p>\n<h2>Step 4. Picking a proper and unique company name<\/h2>\n<p>Rules of the Hungarian company name are:<\/p>\n<ul>\n<li>The company name must be unique (no similar name is registered in the Hungarian company register) You may visit the <strong><a href=\"https:\/\/www.e-cegjegyzek.hu\/\" target=\"_blank\" rel=\"noopener\">official Hungarian on-line company register<\/a><\/strong> to check for similar names.<\/li>\n<li>The Hungarian company name should not contain historical reference, although, applying foreign country names is possible (e.g. Solutions of Germany Szolg\u00e1ltat\u00f3 Kft.). Full English name is also possible.<\/li>\n<li>The name of your company to be registered should contain a so-called call word and a description phase in Hungarian. E.g. Galaxy Kereskedelmi Kft. (=Galaxy Trading Ltd.)<\/li>\n<li>One may also define a foreign name (usually English) of the Hungarian company to be registered.<\/li>\n<\/ul>\n<p>To put it simple: Hungarian company name = Name + Description of the company purpose in Hungarian.<\/p>\n<h2>Step 5. Choosing a main business activity<\/h2>\n<p>You should pick at least one main activity, for which we can provide the proper statistical code (TE\u00c1OR).<\/p>\n<p>These codes are defined and maintained by the Hungarian Statistical Office (KSH).<\/p>\n<p>You may browse the <strong><a href=\"http:\/\/www.ksh.hu\/teaor_eng_menu\" target=\"_blank\" rel=\"noopener\">TE\u00c1OR activity codes<\/a> <\/strong>on the official homepage.<\/p>\n<h2>Step 6. Raising the necessary funds for the registered capital and the registration costs<\/h2>\n<p>Depending on the company form, you should be able to pay the necessary funds. Legally, registered capital must be paid at the time of establishment. Non one-person companies may postpone it for a maximum of 1 year. However, in practice, registered capital is usually paid in parallel to company incorporation as petty cash.<\/p>\n<h2>Step 7. Requesting Hungarian pesonal tax number, opening government portal, signing the company founding documents<\/h2>\n<p><strong>Obtaining Hungarian personal tax number<\/strong> for all the owner(s) and manager(s) of a business is not mandatory, however, very practical. We do that in all of the cases (service is included in our fee). How is it done? If your are here in person, we will accompany you to the tax office. If you cannot visit Hungary, we will do that as proxy (power of attorney).<\/p>\n<p><strong>Opening a Hungarian Electronic Personal Gate<\/strong>\u00a0(<a href=\"https:\/\/magyarorszag.hu\/\" target=\"_blank\" rel=\"noopener\">magyarorszag.hu<\/a>) for the manager(s) of a Hungarian company is <strong>mandatory<\/strong>. Why? Since that is the only way to give authorization of representation in front of tax offices. Without this, neither the tax returns, nor the registrations and financial statements may be submitted and company will be penalized!<\/p>\n<p><strong>How one may open Personal Electronic Gate?<\/strong> <span style=\"text-decoration: underline;\">It can be done only in person. There is no way of authorization or representation by proxy<\/span>. It may be done in Hungary (included in our fee) OR in your current country by visiting the Hungarian Embassy.<\/p>\n<p><strong>The documents of company establishment<\/strong> will be signed by the owner(s) and the general manger(s). All the documents will be countersigned by our lawyer OR apostilled by a public notary OR Hungarian Embassy in your current country (read more about apostille above).<\/p>\n<p>We link the\u00a0<strong><a href=\"http:\/\/www.kormany.hu\/en\/ministry-of-foreign-affairs-and-trade\/missions\" target=\"_blank\" rel=\"noopener\">list of Hungarian Embassies<\/a><\/strong><\/p>\n<h2>Step 8. Registering the company<\/h2>\n<p>Our lawyer will send the documents electronically to the Hungarian Company Court (C\u00e9gb\u00edr\u00f3s\u00e1g). The registration and documents exchange is fully electronics. The Hungarian Company Court will issue the certificate of registration as a digital document (.es3 file).<\/p>\n<h2>Step 9. Finalizing Hungarian company incorporation<\/h2>\n<p>Once the company is registered, opening a local bank account and submit the necessary registration forms:<\/p>\n<ul>\n<li>Central tax office (<a href=\"http:\/\/nav.gov.hu\/\" target=\"_blank\" rel=\"noopener\">NAV<\/a>)<\/li>\n<li>Local tax office<\/li>\n<li>Statistical office (<a href=\"http:\/\/www.ksh.hu\/\" target=\"_blank\" rel=\"noopener\">KSH<\/a>)<\/li>\n<li>Chamber of commerce (<a href=\"https:\/\/mkik.hu\/\" target=\"_blank\" rel=\"noopener\">MKIK<\/a>)<\/li>\n<\/ul>\n<h2>Step 10. Opening Electronic Company Portal (<a href=\"https:\/\/tarhely.gov.hu\/ckp-regisztracio\/tajekoztato.html\" target=\"_blank\" rel=\"noopener\">C\u00e9gkapu<\/a>)<\/h2>\n<p>From January 1st 2018, it is mandatory for every Hungarian company to open a so-called Electronic Company Portal. That is done electronically based on our authorization (this service is also included in our fees).<\/p>\n<h2>Picking a proper accountant<\/h2>\n<p>The company, from the very beginning, needs some administrative tasks to be completed, even if it does not carry out any actual business activity. An expert is essential for a newly established company.<\/p>\n<h1>What documents are needed for company registration?<\/h1>\n<p>The documents you will need for incorporating a Hungarian business entity are the followings:<\/p>\n<ul>\n<li>A valid passport or EU ID card each of the owners and the manager. This document may be sent in <strong>a scanned <\/strong>version also. Sometimes, official translation is also needed which is additional cost. In which cases? Ff the passport ID page contains entries not translated to English (e.g. Egyptian passport contains address also but only in Arabic)<\/li>\n<li>Articles of incorporation. This is the basic founding document of any Hungarian company to be registered.<\/li>\n<li>Specimen of signature of the general manager.<\/li>\n<li>Declarations of the general manager (usage of seat, acceptance of position, payment of capital, list of owners).<\/li>\n<li>Assignment of delivery. Every non-Hungarian-resident person who is included in the company as manager or owner, should have a delivery agent assigned. This service is included in our company registration fee.<\/li>\n<li>If the company&#8217;s founder is a legal person or organization: the apostilled company extract of that legal person or organization.<\/li>\n<li>In case of company is to be registered based on power of attorney. The apostilled authorization (power of attorney). This document will be prepared by us. One copy for each the owner(s) and the general manager(s).<\/li>\n<\/ul>\n<h1>The costs and fees of company incorporation<\/h1>\n<p>Last but not least, one of the most import questions: what does it cost to establish a firm in Hungary?<\/p>\n<p>According to our transparency principle, you may find below a comparison and summary table of the costs that may emerge during the company registration.<\/p>\n<p>(Please note that these prices refer to companies established by using the state-provided template and do not include 27% VAT. Our fee includes the submission of the documents connected to the incorporation of the company)<\/p>\n<table style=\"height: 949px;\" width=\"860\">\n<tbody>\n<tr>\n<td width=\"177\"><strong>Description<\/strong><\/td>\n<td width=\"109\"><strong>Private enterprise<\/strong><\/td>\n<td width=\"109\"><strong>Partnerships (KKT, BT)<\/strong><\/td>\n<td width=\"109\"><strong>Limited liability company (KFT)<\/strong><\/td>\n<td width=\"109\"><strong>Private limited liability companies (ZRT)<\/strong><\/td>\n<\/tr>\n<tr>\n<td width=\"177\">Lawyer&#8217;s fee<\/td>\n<td width=\"109\">&#8211;<\/td>\n<td width=\"109\">Incl. in our price<\/td>\n<td width=\"109\">Incl. in our price<\/td>\n<td width=\"109\">Incl. in our price<\/td>\n<\/tr>\n<tr>\n<td width=\"177\">Registration fee (paid for the state)<\/td>\n<td width=\"109\">&#8211;<\/td>\n<td width=\"109\">0 HUF (from March 2017)<\/td>\n<td width=\"109\">0 HUF (from March 2017)<\/td>\n<td width=\"109\">100\u00a0000 HUF<\/td>\n<\/tr>\n<tr>\n<td width=\"177\">Query of the document register (government fee)<\/td>\n<td width=\"109\">&#8211;<\/td>\n<td width=\"109\">2 700 HUF\/person<\/td>\n<td width=\"109\">2 700 HUF\/person<\/td>\n<td width=\"109\">2 700 HUF\/person<\/td>\n<\/tr>\n<tr>\n<td width=\"177\">Opening a bank account (per bank account) 1 HUF account is mandatory!<\/td>\n<td width=\"109\">0 EUR<\/td>\n<td width=\"109\">30 EUR<\/td>\n<td width=\"109\">30 EUR<\/td>\n<td width=\"109\">30 EUR<\/td>\n<\/tr>\n<tr>\n<td width=\"177\">Our all-inclusive fee<\/td>\n<td width=\"109\">100 EUR<\/td>\n<td width=\"109\">599 EUR<\/td>\n<td width=\"109\">599 EUR<\/td>\n<td width=\"109\">1.100 EUR<\/td>\n<\/tr>\n<tr>\n<td rowspan=\"2\" width=\"177\"><strong><em>TOTAL in EUR<\/em><\/strong><\/td>\n<td rowspan=\"2\" width=\"109\"><strong>100 EUR<\/strong><\/td>\n<td width=\"109\"><strong><em>~599-650 EUR<br \/>\n<\/em><\/strong><\/td>\n<td width=\"109\"><strong><em>~599-650 EUR<\/em><\/strong><\/td>\n<td width=\"109\"><strong><em>~1.100-1.200 EUR<\/em><\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h1>How much time does it take to register a company?<\/h1>\n<p>If you send all the necessary documents in advance, we are able to book all appointments well before and you will have to visit Hungary only once. The administration in this case will take about 1-2 day(s).<\/p>\n<p>By using the template, the registration procedure period may be reduced dramatically. For foreigners, the incorporation will take <strong>approx. from 2 days to 2 weeks.<\/strong><\/p>\n<p>After the company is registered, you will have to open a bank account in Hungary, however, for additional fee, we may undertake this tasks as attorney.<\/p>\n<h1>What is included in our service?<\/h1>\n<p>The following items are included in our company registration service fee:<\/p>\n<ul>\n<li>Consultancy (costs EUR\u00a0 60 which will be fully credit if company incorporation service is obtained)<\/li>\n<li>Lawyer fee<\/li>\n<li>Government fee<\/li>\n<li>Mandatory registrations fee (central tax office, local tax office, chamber of commerce, statistical office)<\/li>\n<li>1-year official seat service service fee<\/li>\n<li>1-year Company Portal service fee<\/li>\n<li>1-year delivery agency service fee<\/li>\n<li>Company bank account opening fee<\/li>\n<\/ul>\n<blockquote><p>You may find interesting and useful our article about <a href=\"http:\/\/www.whisperingtree.hu\/blog\/company-registration-in-hungary-2\/\" target=\"_blank\" rel=\"noopener\">Hungarian taxation <strong>system<\/strong><\/a> also.<\/p><\/blockquote>\n<h1>FAQ<\/h1>\n<p>Q: Should I come to Hungary or can I open the company from abroad?<\/p>\n<p>A: A Hungarian company may be started based on authorization (power of attorney), so &#8211;\u00a0 legally &#8211; neither the general manager(s) or owner(s) should come to Hungary in person. Only drawback: you will have to have the<\/p>\n<p>&nbsp;<\/p>\n<p>Q: Should I open the bank account personally?<\/p>\n<p>A: No. We can manage this with the power of attorney.<\/p>\n<p>&nbsp;<\/p>\n<p>Q: What banks you have in Hungary?<\/p>\n<p>A: Please refer to <strong><a href=\"https:\/\/en.wikipedia.org\/wiki\/List_of_banks_in_Hungary\" target=\"_blank\" rel=\"noopener\">Wikipedia<\/a><\/strong> about this. We prefer <a href=\"https:\/\/www.otpbank.hu\/portal\/en\/Retail\" target=\"_blank\" rel=\"noopener\"><strong>OTP bank<\/strong><\/a> since it is the biggest.<\/p>\n<p>&nbsp;<\/p>\n<p>Q: Can I open more bank accounts?<\/p>\n<p>A: You can open as many bank accounts as you want, however, one domestic account is required by the law.<\/p>\n<p>&nbsp;<\/p>\n<p>Q: How can I access my bank account?<\/p>\n<p>A:\u00a0 Depends on bank. We prefer OTP which uses SMS login. That is safe and flexible. All you need is SIM card and a phone. <strong>Foreign mobile number may also be used<\/strong> with no additional fee!<\/p>\n<p>&nbsp;<\/p>\n<p>Q: Are there any additional\/hidden costs?<\/p>\n<p>A: No. We prefer absolute transparency. Extra costs may be: official translation of foreign documents. We use <strong><a href=\"https:\/\/www.reflex.hu\/en\/\" target=\"_blank\" rel=\"noopener\">REFLEX<\/a><\/strong> as official translator and reinvoice the cost based on their invoice. I.e. we do not make any profit on translation.<\/p>\n<p>&nbsp;<\/p>\n<p>Q: Why should I separate the role of manager and owner?<\/p>\n<p>A: Due to minimal social security tax. Pleas refer to our <strong><a href=\"http:\/\/whisperingtree.hu\/Download\/eBook_Complete_Guide_to_Doing_Business_in_Hungary.pdf\" target=\"_blank\" rel=\"noopener\">free downloadable eBook<\/a> <\/strong>about this very important issue!<\/p>\n<p>&nbsp;<\/p>\n<p>Q: Will the Hungarian company registered have a VAT number and\/or EU VAT number?<\/p>\n<p>A: Yes. Tax registration is part of our service and included in the price.<\/p>\n<h1>Other useful information, quotation<\/h1>\n<p>You may check out our <strong><a href=\"http:\/\/www.whisperingtree.hu\/EN\/fees.html\">fees<\/a><\/strong>\u00a0or fill out our<\/p>\n<p style=\"text-align: center;\"><strong><a href=\"https:\/\/docs.google.com\/forms\/d\/e\/1FAIpQLScKVtHsbCHHw9c6OoPRl-oG9qW7yoHw5iL-o-2OtY9SGW4s_w\/viewform\" target=\"_blank\" rel=\"noopener\">ONLINE QUOTATION FORM<\/a><\/strong><\/p>\n<p>Also, there is a very comprehensive <strong><a href=\"http:\/\/www.whisperingtree.hu\/blog\/the-complete-guide-to-doing-business-in-hungary-ebook\/\">article about company registration in Hungary<\/a><\/strong> with a <a href=\"http:\/\/whisperingtree.hu\/Download\/eBook_Complete_Guide_to_Doing_Business_in_Hungary.pdf\" target=\"_blank\" rel=\"noopener\"><strong>downloadable free eBook<\/strong><\/a> you may be interested in.<\/p>\n<p>For further information, please check out our <strong><a href=\"http:\/\/www.whisperingtree.hu\/EN\/index.html\">website.<\/a><\/strong><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you are planning to register a company in Hungary, you may read this article before your final decision. It provides you a brief overview on company incorporation possibilities, process and costs. Why to start a business in Hungary? First of all, it is very important to clarify, the advantages of opening a company in &hellip; <a href=\"https:\/\/www.whisperingtree.hu\/blog\/company-registration-in-hungary\/\" class=\"more-link\"><span class=\"screen-reader-text\">The process and costs of starting a business enterprise in Hungary<\/span> r\u00e9szletei&#8230;<\/a><\/p>\n","protected":false},"author":1,"featured_media":39,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false},"categories":[30,61],"tags":[330,184,177,176,180,178,182,142,181,183,331,332],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Company registration in Hungary - The process and costs<\/title>\n<meta name=\"description\" content=\"If you are considering company registration in Hungary, you may want to read this article which describes the process and costs of starting up a business.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.whisperingtree.hu\/blog\/company-registration-in-hungary\/\" \/>\n<meta property=\"og:locale\" content=\"hu_HU\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Company registration in Hungary - 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