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Low taxes and prices (corporate income tax of only 10%) make Hungary an attractive country for entrepreneurs. You can do business with us in Hungary immediately. We will tailor the establishment of the company and the preparation of documentation for you.

Basic information about the country

  • Hungary became a member of the European Union in 2004.
  • The country is also a member of other international organizations such as the UN, NATO, OECD, etc.
  • Hungary is part of the Schengen area.
  • Many large companies have chosen Hungary as their headquarters.
  • The VAT rate is 27 %, the company is obliged to register for its payment.
  • Hungary did not accept the Euro. Therefore, the Hungarian currency remains the Hungarian forint (HUF).
  • With the Hungarian company k.f.t. registered for VAT in Hungary, you invoice WITHOUT VAT to all other EU member states.

Why start a company in Hungary?

As an entrepreneur interested in offshore investment opportunities, this is probably the right tax structure for you. It is possible in Hungary. The basic corporate income tax rate is 10 %, which is one of the lowest rates in the entire European Union.

Only limited bureaucracy – nothing you are not used to from home, which should save you nerves and health.
If you're a sole trader, you don't have to worry, as the rules only require one shareholder and one director – so you're on your own.

Hungarian companies can very well optimize their tax burden. The country has signed more than 60 treaties (!) regarding double taxation. The most common form of company is the Korlátolt Felelosségu Társaság (KFT), which is a type of company that corresponds to a limited liability company.

What to watch out for

  • A minimum capital of HUF 500,000 (about 1,600 Euros) is required, of which at least half must actually be deposited in a bank account.
  • The company must keep accounts and file tax returns.
  • If the company's profit exceeds HUF 500,000,000 (ie about EUR 1,600,000) per year, the tax rate increases to 19%.
  • The register of companies in Hungary is publicly accessible, but you can use nominee services.
  • Establishing a company in Hungary is suitable for both holding structures and active business activities.

What will business in Hungary bring you?

  • Hungary has an extensive network of double taxation treaties.
  • There are now two corporate income taxes, 19 % and 1 %. The reduced rate can be used on the tax base up to HUF 500 million (Eur 1.7 million).
  • In Hungary, dividends are exempt from withholding tax regardless of where they are paid. So it doesn't matter if he leaves for English Ltd. or the Seychelles.
  • Another advantage is the exemption of income from capital gains as well as taxation of income from license fees in the amount of 5 %.
  • Invoicing to or from Seychelles is exempt from withholding tax.
  • Offers an interesting tax environment for foreign capital.
  • Hungarian companies can be used for holding purposes as well as for active business activities.
  • Excellent knowledge of the Hungarian market and the Hungarian language is our added value.
  • All in all, if you add it up, you can easily calculate how much you will save on taxes, and this is often the very reason why companies move their business to Hungary.

How to set up a company and what is needed for it

We will confirm the order, issue an advance invoice, after crediting the payment, we will prepare all the documents necessary for establishment with you and request from you:

  • selection of a suitable name, followed by KFT
  • designation of at least 1 managing director and partner and their personal data
  • a partner can be a natural person as well as a legal entity
  • the executive does not have to have a permanent residence in Hungary
  • the obligation to have a registered office of the company – we will arrange it in Budapest, including forwarding the mail
  • minimum capital of HUF 500,000 / approx. EUR 2,000

Basic information

  • Type of legal entity: KFT (korlátolt felllÅ‘ségű sángátÅ‘)
  • Establishment time: 10 days
  • Number of shareholders: minimum 1, can be any nationality
  • Shareholders: members can be FO or business entities
  • Share capital: at least EUR 10,000
  • Shares on bearer: not allowed
  • Registered address is mandatory, but does not have to be physical
  • The company secretary is not mandatory
  • Directors: minimum 1, maximum not defined
  • Resident function of the director: the director does not have to be a resident of Hungary
  • General meeting: obligation to hold a general meeting yes

Taxation

  • Corporate income tax rate of 10 % (on the first 500 million HUF = 1.77 million EUR of income, 19 % above this)
  • Branch Tax rate 10 % (on first income HUF 500 million = EUR 1.77 million, 19 % above this)
  • Dividends, interest paid to companies 0 %
  • Dividends, interest paid to individuals 16 %
  • Net operating losses can be carried forward for up to 5 years
  • The state VAT rate is 27 %, reduced by 5 % and 18 %
  • The company receives a VAT number immediately upon establishment
  • With a Hungarian company registered for VAT, YOU INVOICE AND PURCHASE WITHOUT VAT to and from other member states of the European Union
  • Double taxation agreements with various countries were applied, determining tax rates on dividends, interest and royalties
  • Accounting. Billing and preparation of accounts is required
  • An audit is not required if the legal conditions are met
  • Anonymity and privacy. Information about directors (administrators) and shareholders is open in the commercial register

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