{"id":794,"date":"2020-07-01T18:20:56","date_gmt":"2020-07-01T16:20:56","guid":{"rendered":"http:\/\/www.whisperingtree.hu\/blog\/?p=794"},"modified":"2021-09-28T03:09:09","modified_gmt":"2021-09-28T01:09:09","slug":"starting-a-private-enterprise-in-hungary","status":"publish","type":"post","link":"https:\/\/www.whisperingtree.hu\/blog\/starting-a-private-enterprise-in-hungary\/","title":{"rendered":"Starting a private enterprise (sole entrepreneurship) in Hungary"},"content":{"rendered":"\n<p>This article was inspired by two of our recent clients. One of them arrived to Hungary from Canada and the other one from the United States. Both of them were about to open a <strong>Hungarian private enterprise<\/strong> (sole entrepreneurship). Their story, background and plans can be a very useful experience for others and well worth sharing it.<\/p>\n\n\n\n<h2>Legal background<\/h2>\n\n\n\n<h3>What is a private enterprise?<\/h3>\n\n\n\n<p>Private enterprise, or sole entrepreneurship in other words, is a type of Hungarian businesses. It is considered as private individual who is entitled to carry out certain business activities. Therefore, in Hungary, private enterprise is not a legal person and it is never separated from the natural person who runs it.<\/p>\n\n\n\n<h3>How much capital i need to start a private enterprise?<\/h3>\n\n\n\n<p>In the Hungarian legislation, there is no such thing as minimum capital required for private enterprises. Actually, the term capital itself cannot be applied to a private enterprise.<\/p>\n\n\n\n<h3>What responsibilities I will carry?<\/h3>\n\n\n\n<p>Private enterprise in Hungary means full financial responsibility. I.e. the private individual is liable for all of the depts. of the private enterprise.<\/p>\n\n\n\n<h3>What are the limits for the Hungarian private enterprise?<\/h3>\n\n\n\n<p>There is no limitations set for the private enterprise in Hungary. That means you can gain as much income as you can and employ as many people as you can.<\/p>\n\n\n\n<h3>Who can start a private enterprise in Hungary?<\/h3>\n\n\n\n<p>Basically, Hungarian, EU and non-EU adult (above the age of 18) citizens may also start a private enterprise in Hungary. If you are not an EU citizen, you will need to have one the following titles of residency in order to start your sole entrepreneurship:<\/p>\n\n\n\n<ul><li>Family reunification<\/li><li>Gainful activity<\/li><li>Student<\/li><\/ul>\n\n\n\n<h2>Steps of starting a Hungarian private enterprise<\/h2>\n\n\n\n<h3>STEP 1: Planning<\/h3>\n\n\n\n<p>Before you start your business in Hungary, <strong>carefully make a good and detailed legal, financial and taxation<\/strong> plan. What would you like to do? Who will be your customers? What kind of contracts you will make? How will you invoice your services? What taxation method you will apply? Those are some of the important questions that you should answer during the planning procedure.<\/p>\n\n\n\n<p><strong>If you need help, please contact a professional consultant before moving forward. Any mistake you made during the startup is very hard or even impossible to correct later.<\/strong><\/p>\n\n\n\n<p><strong>Almost all of the customer services and government websites use only Hungarian language. This may also mean a major barrier for you.<\/strong><\/p>\n\n\n\n<h3>STEP2: Decision about private enterprise income taxation method<\/h3>\n\n\n\n<p>You will have to pick a proper taxation method. Basically, you may choose among the following three taxpaying methods:<\/p>\n\n\n\n<ul><li>Personal income tax (default, 15%)<\/li><li>KATA (very popular, 50k HUF\/month)<\/li><li>Average tax (not so popular anymore, however, it is still in the legislation)<\/li><\/ul>\n\n\n\n<p><strong>KATA taxation<\/strong> is the most popular in Hungary. Its benefits are obvious: <strong>12 million HUF yearly income limit at the cost of the fixed amounts of 600k HUF KATA and 50k HUF local tax<\/strong>.<\/p>\n\n\n\n<p>We also published a comprehensive <a href=\"http:\/\/www.whisperingtree.hu\/blog\/kata-in-hungary\/\" target=\"_blank\" rel=\"noreferrer noopener\">article about KATA taxation<\/a> that digs into the details. You may consider reading it also.<\/p>\n\n\n\n<h3>STEP 3: Sole entrepreneurship and value added tax (VAT)<\/h3>\n\n\n\n<p>As a private enterprise, in Hungary, you may be:<\/p>\n\n\n\n<ul><li>A normal VAT payer (default)<\/li><li>VAT free (up to 12 million HUF of yearly income)<\/li><\/ul>\n\n\n\n<p>If possible, we <strong>strongly recommend choosing the VAT free system.<\/strong><\/p>\n\n\n\n<h3>STEP 4: Starting you private enterprise<\/h3>\n\n\n\n<p>You may start your Hungarian private enterprise either by using <a href=\"https:\/\/www.nyilvantarto.hu\/ugyseged\/\" target=\"_blank\" aria-label=\"undefined (opens in a new tab)\" rel=\"noreferrer noopener\">Webes \u00dcgyseg\u00e9d<\/a> or in person by visiting one of <a href=\"https:\/\/www.nav.gov.hu\/nav\/ugyfelszolg\" target=\"_blank\" aria-label=\"undefined (opens in a new tab)\" rel=\"noreferrer noopener\">NAV\u2019s customer services<\/a>.<\/p>\n\n\n\n<p>To startup online, you will need a preliminary registration of Electronic Government gate (\u00dcgyf\u00e9lkapu). This can be done only in person at any of the <a href=\"http:\/\/kormanyablak.hu\/hu\/kormanyablakok\" target=\"_blank\" aria-label=\"undefined (opens in a new tab)\" rel=\"noreferrer noopener\">Government Windows<\/a> (Korm\u00e1nyablak). To complete this, you will need a valid ID card or passport. Opening and maintaining an Electronic government Gate is free of charge.<\/p>\n\n\n\n<h3>STEP 5: Invoicing in Hungary<\/h3>\n\n\n\n<p>Invoicing in Hungary is a crucial issue. As we <a href=\"http:\/\/www.whisperingtree.hu\/blog\/tax-changes-hungary-2020\/\" target=\"_blank\" aria-label=\"undefined (opens in a new tab)\" rel=\"noreferrer noopener\">already published in our blog<\/a>, <strong>from 1<sup>st<\/sup> July 2020<\/strong>, every invoice which is issued to another Hungarian VAT payer (i.e. has a Hungarian tax number) should be reported to the Tax Office (NAV) electronically.<\/p>\n\n\n\n<p>This may be fulfilled either by issuing a paper invoice and report it manually or buy an invoicing software and connect it to <a aria-label=\"undefined (opens in a new tab)\" href=\"https:\/\/onlineszamla.nav.gov.hu\/home\" target=\"_blank\" rel=\"noreferrer noopener\">NAV\u2019s online invoicing database<\/a> system. The latter is done through setting up XML keys as demonstrated by the following infographic.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large is-resized\"><a href=\"https:\/\/www.whisperingtree.hu\/blog\/wp-content\/uploads\/2021\/09\/Hungarian-Private-Enterprise-invoicing.png\"><img loading=\"lazy\" src=\"https:\/\/www.whisperingtree.hu\/blog\/wp-content\/uploads\/2021\/09\/Hungarian-Private-Enterprise-invoicing-820x1024.png\" alt=\"NAV Invoicing Cloud and invoicing software connection\" class=\"wp-image-875\" width=\"500\" height=\"600\" \/><\/a><figcaption>NAV Invoicing Cloud and invoicing software connection<\/figcaption><\/figure><\/div>\n\n\n\n<p>You may check out our <a aria-label=\"undefined (opens in a new tab)\" href=\"http:\/\/www.whisperingtree.hu\/blog\/how-to-register-to-hungarian-tax-office-online-invoicing-system\/\" target=\"_blank\" rel=\"noreferrer noopener\">article about online invoicing<\/a> that focuses on setting up online invoicing connection with NAV.<\/p>\n\n\n\n<h3>STEP 6: Opening a bank account<\/h3>\n\n\n\n<p>Hungarian enterprises are required to open and maintain at least one local bank account. This may be evaded, if you have a private business and you are not a VAT payer (i.e. you fall under the VAT free status).<\/p>\n\n\n\n<p><strong>However, it is better to separate your private funds and transactions from the ones you generate with your sole enterprise.<\/strong><\/p>\n\n\n\n<h3>STEP 7: Finalizing the registration of your private enterprise<\/h3>\n\n\n\n<p>After you opened your Hungarian private enterprise and bank account, you will have to register them at the <a aria-label=\"undefined (opens in a new tab)\" href=\"https:\/\/www.bkik.hu\/hu\/\" target=\"_blank\" rel=\"noreferrer noopener\">Local Chamber of Commerce<\/a> and at the local tax office (depends on your official HQ address).<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-full is-resized\"><a href=\"https:\/\/www.whisperingtree.hu\/blog\/wp-content\/uploads\/2021\/09\/Hungarian-Private-Enterprise-registrations.png\"><img src=\"https:\/\/www.whisperingtree.hu\/blog\/wp-content\/uploads\/2021\/09\/Hungarian-Private-Enterprise-registrations.png\" alt=\"Mandatory registrations after private enterprise startup\" class=\"wp-image-879\" width=\"500\" srcset=\"https:\/\/www.whisperingtree.hu\/blog\/wp-content\/uploads\/2021\/09\/Hungarian-Private-Enterprise-registrations.png 1000w, https:\/\/www.whisperingtree.hu\/blog\/wp-content\/uploads\/2021\/09\/Hungarian-Private-Enterprise-registrations-300x232.png 300w, https:\/\/www.whisperingtree.hu\/blog\/wp-content\/uploads\/2021\/09\/Hungarian-Private-Enterprise-registrations-768x593.png 768w, https:\/\/www.whisperingtree.hu\/blog\/wp-content\/uploads\/2021\/09\/Hungarian-Private-Enterprise-registrations-192x148.png 192w\" sizes=\"(max-width: 1000px) 100vw, 1000px\" \/><\/a><figcaption>Mandatory registrations after private enterprise startup<\/figcaption><\/figure><\/div>\n\n\n\n<h2>How can we help you?<\/h2>\n\n\n\n<p>For a fair and competitive fee, we can help you in the following issues:<\/p>\n\n\n\n<ul><li>Legal, taxation and business consultancy<\/li><li>Opening Electronic Government Gate (transport and translation)<\/li><li>Opening Hungarian private enterprise<\/li><li>Setting up you invoicing system<\/li><li>Finalizing your registration<\/li><\/ul>\n\n\n\n<h2>How much does it cost to start a private enterprise in Hungary?<\/h2>\n\n\n\n<p>Our gross fee is around <strong>HUF 15.000.-20.000.- (or EUR 50-65)<\/strong><\/p>\n\n\n\n<p>That price includes:<\/p>\n\n\n\n<ul><li>General taxation and business consultancy<\/li><li>Opening a private enterprise<\/li><li>Complete the other required registrations<\/li><li>E-mailing electronic documentation<\/li><\/ul>\n\n\n\n<p>Time required: ca. 3 hours.<\/p>\n\n\n\n<h2>Other possibilities<\/h2>\n\n\n\n<p>If private enterprise does not work for you, registering a Hungarian company and applying other taxation methods like <a href=\"https:\/\/www.whisperingtree.hu\/blog\/best-taxation-in-hungary-personal-income-tax-pit-kata-kiva-or-corporate-income-tax-cit\/\" target=\"_blank\" rel=\"noreferrer noopener\">KIVA and corporate income tax<\/a> may do the job.<\/p>\n\n\n\n<h2>Contact<\/h2>\n\n\n\n<p>If you have further questions or would like to request and inquiry, please feel free to contact us.<\/p>\n\n\n\n<p>Web: <a href=\"http:\/\/www.whisperingtree.hu\" target=\"_blank\" aria-label=\"undefined (opens in a new tab)\" rel=\"noreferrer noopener\">www.whisperingtree.hu<\/a><\/p>\n\n\n\n<p>E-mail: <a href=\"mailto:whispeirngtreebt@gmail.com\" target=\"_blank\" aria-label=\"undefined (opens in a new tab)\" rel=\"noreferrer noopener\">whispeirngtreebt@gmail.com<\/a><\/p>\n\n\n\n<p>Tel\/VIBER\/WhatsApp: <a href=\"tel:+36205484103\">+36 20&nbsp;548 4103<\/a><\/p>\n\n\n\n<p>Facebook: Whispering Tree Gazdas\u00e1gi Tan\u00e1csad\u00f3 Iroda<\/p>\n","protected":false},"excerpt":{"rendered":"<p>This article was inspired by two of our recent clients. One of them arrived to Hungary from Canada and the other one from the United States. Both of them were about to open a Hungarian private enterprise (sole entrepreneurship). Their story, background and plans can be a very useful experience for others and well worth &hellip; <a href=\"https:\/\/www.whisperingtree.hu\/blog\/starting-a-private-enterprise-in-hungary\/\" class=\"more-link\"><span class=\"screen-reader-text\">Starting a private enterprise (sole entrepreneurship) in Hungary<\/span> r\u00e9szletei&#8230;<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false},"categories":[30,61],"tags":[254,434,371,433,373,36],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Starting a private enterprise (sole entrepreneurship) in Hungary<\/title>\n<meta name=\"description\" content=\"A comprehensive and helpful article for non-taxation-experts which you should read if you are about to start a private enterprise Hungary.\" \/>\n<meta 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