The costs of registering a company in Hungary and the advantages of this business instrument

The cost of setting up a business company in Hungary is made up of three types of expenditures: the state duties and fees, the indirect costs (a trip to the country is required to open a bank account), and the intermediary fee. Theoretically, you can register a company in Hungary without an intermediary but we do not recommend that you do so because you will be running too high a risk of making mistakes and the process can extend over a long period. The same is true for trying to register the company online or choose the intermediary who charges less than others do.

Therefore, if you are after success in registering a company in Hungary, you should not try to save on the company formation procedure especially if you have never dealt with the Hungarian registration authorities. You have to realize that it is impossible to register a foreign company, including one in Hungary, at a zero cost.

What is the text below about? It is about the general advantages of Hungary as a place to register a foreign company. It is also about the costs that our clients incurred when setting up companies in this country. Now they are happy owners of Hungarian KFTs (the most popular form of company ownership in the country that is an LLC in essence).

We have to make some preliminary remarks though:

• All the quoted figures and other information hold for the moment when the text was written.
• All the prices indicated are true prices and of any of them changes, we will update the text.
• We are not to be held responsible for the results of company registration in Hungary if you go about doing so after reading the text but without involving our experts in the process.
• This is an informational article and it cannot be thought of as a systematic guide to company formation in Hungary.
• Please apply for our professional assistance in order to acquire a personal consultation and discuss all the details of the company registration process.
• We will also gladly help you if your case is non-standard (for instance, if you would like to set up a management company in Hungary).

Main advantages of Hungary for company domiciliation

The costs of registering a company in Hungary may appear quite high but please do not jump to conclusions. This jurisdiction offers international business people very lucrative conditions so your investments into company registration will pay back soon. The only potential problem is the complexity of the registration procedure. However, if you trust our experts to set up a company in Hungary for you, you can forget about this problem and simply enjoy doing business in the country. 

The main reasons to register a company in Hungary:

• Sympathetic attitude towards foreigners in the country;
• Lack of serious restrictions for non-residents;
• A simple procedure of acquiring a legal residence permit in Hungary;
• A stable national currency (the Hungarian Forint, HUF);
• Short company registration timeframe. There can be exceptions, however, if you would like to register a company with a complicated ownership structure, for example, or if company beneficiaries come from sanctioned countries, or if the company has questionable partners, suppliers, etc.
• Transparent corporate legislation that is constantly improved;
• The cost of registering a company in Hungary is lower in comparison to the cost of setting up companies in other onshore jurisdictions;
• Relatively small fiscal burden. Some offshore and midshore jurisdictions will charge less in taxes but if you compare Hungary with other countries popular with foreign entrepreneurs such as Cyprus, Czech Republic, or Great Britain, for instance, you will see that Hungary is less expensive. 

Types of company ownership in Hungary

Those international entrepreneurs who choose Hungary as the country of their company domiciliation usually choose to open an LLC there (KFT, Korlátolt Felelosségû Társaság, in Hungarian). However, there are other options in the country as far as the company ownership form is concerned. Please contact our experts at the address above and they will help you choose the best type of ownership for your Hungarian-based company.

Requirements to a limited liability company in Hungary – KFT:

• Charter capital: from 3 million HUF / from 20 million HUF.
• Minimum deposited charter capital: 50% / 30%.
• If part of the company charter capital comes not in the form of money but in some other form (such as real property, for instance), the worth of the property shall be assessed by a local independent expert, a citizen of Hungary.
• Company owners’ residential statuses do not matter.
• Open sale of company shares: prohibited/ allowed (both registered stock and bearer shares can be issued).
• Requirements to company directors: minimum 1 person or 1 corporate entity/ from 3 to 11 people, only private individuals (not corporate entities) to act as company directors. 
• Supervisory Board requirements: if the capital exceeds 50 million HUF and the number of company employees exceeds 200 people/ in any case.

Requirements to a partnership, limited or unlimited – KKT or BT, in Hungary:

• The amount of the required charter capital is not specified.
• The charter capital shall be equally divided between the partners.
• There shall be minimum 2 partners.
• The partners’ residential statuses do not matter.
• General partners have unlimited liabilities while the liability of limited partners does not exceed the amounts of their contributions to the charter capital.
• Transfer of shares is possible only on the decision of a general meeting.
• The Articles of Association shall contain all the principles/ methods of company management.

Please note: Registering a Partnership in Hungary costs a bit less than registering an LLC there!

Online and offline company registration in Hungary: main stages

The company registration procedure involves several steps and some of them are rather complicated. This is why we do not recommend that you should engage in the procedure on your own. If you try to save on professional assistance in the matter, you are almost guaranteed to lose more money on correcting your mistakes let alone wasting extra time. Let us also remind you that this article is not a step-by-step guide to company registration in Hungary. 

The main stages of registering a business company in Hungary:

• Choose the company name. The requirements are quite standard: suggest at least two alternative names (but better more than two); the suggested name shall be unique/ not registered before; Latin letters shall be used; company ownership type shall be reflected in the company name (for example, the name shall end in KFT if it is a KFT); some words are prohibited from use (typical examples would be the words Budapest, state, Hungarian, national, and so on).
• Determine the company structure, residency, directors, and stockholders.
• Define the distribution of the charter capital between company owners.
• Define the spheres of business activities that the company is going to be engaged in.
• Find out the provisional costs of registering a company in Hungary (add the state duties, the travel costs, and the Internationalwealth.info experts’ fees).
• Prepare the package of personal/ corporate application documents. This is probably the most demanding stage and the document preparation should be handled with great care. Otherwise, the success of the endeavor may appear questionable.
• Pass through the Due Diligence/ AML/ KYC procedures.
• Register the company in the Hungarian Company`s Court. This is the organization that will issue the company registration certificate.
• Register the company with the tax authorities and acquire a taxpayer number.
• Register the company with the Hungarian social security service.
• Open a corporate bank account. We must note that a Hungarian-registered company can have accounts anywhere in the world but the local legislation required that at least one bank account should be set up in Hungary.

Please note: If you would like to set up an additional bank account for your Hungarian-based company in Singapore or Switzerland, for example, the cost of company registration is going to be higher! Please think twice before choosing this option.

When the company registration process is completed, you will receive an electronic document that will contain the following information:

• The official decision to register your company in Hungary;
• Company By-laws (called ‘Corporate Contract’ in Hungary);
• The list of company stockholders;
• Signature samples for company officers;
• A bank statement certifying that the charter capital has been deposited (fully or partially but in no lesser amount that is required by law);
• A document certifying the company registered legal address;
• A letter of consent from a local agent who will receive the mail/ correspondence.
• A letter from a designated GLS Hungary.

Calculation of the costs of registering a company in Hungary

Before we quote the prices, we have to draw your attention to several important points. Please mind that only cheaters can suggest that a company can be registered in Hungary free of charge. It is impossible, as at least the government fees and the cost of a short trip to Hungary (to set up a bank account) need to be covered.

Other important points:

• Our prices are in euros. The national currency in Hungary can fluctuate and so can the costs of our services.
• We accept bitcoins.
• We provide services only on an advanced-payment basis.
• If you do not find a description of the service that you need, please contact our experts.
• If you have changed your mind after covering the costs of our services, the payment will not be returned.
• The prices are indicated for standard services that require a standard volume of work. If a service requires more time and effort to provide or if an unforeseen even occurs, the price may be changed. We will inform you about such situations asap.
• Our prices include the state duties and fees. If these change, we will have to change our pricing too. Please understand that we do not control the Hungarian Government!
• Our prices are quoted in euros but this currency is not immune to inflation. Thus, we periodically update our pricelists.

Below please find the prices for various services that we provide in relation to registering and maintaining business companies in Hungary.

Special limited-time offer: company registration + bank account opening – 5,000 EUR

• Company registration;
• EU VAT acquisition;
• A bank account in Hungary;
• Company legal address (valid for a year, extension required);
• Corporate mail handling;
• Tax identification numbers for company owners/ directors;
• Access to ÜGYFÈLKAPU state online portal.

This is a product that sells especially well. The company can be registered online within 24 hour, however, a short trip to Hungary is required to set up the bank account. You are welcome to apply for additional services as well.

Services if ordered separately

• Company registration – 2500 / 3000 (with a visit to Hungary/ without a visit);
• Bank account opening – 2999.

Annual mandatory payments

• Extension of legal address – 900.
• Nominee company director* (per month) – 600.
• Nominee shareholder* (per month) – 500.
• Accounting support (minimal service package) – 450.

Please note that services marked with asterisks * are mandatory only of you would like to use the nominee services.

Additional services

Below please find a list of services whose cost is not covered in the proposed service package. You can order these services from us or you can abstain from it.

• Submission of corporate documents – 100;
• Apostil – 200;
• Document preparation – 200 (ultimate cost will depend upon the amount of time that our expert spends preparing your documents);
• Delivery of the document package – 250 (approximately);
• Acquisition of tax number and access to Ügyfélkapu & Cégkapu online portals – 300;
• Minimal accounting support – 450.

Please note that the ultimate cost of registering a company in Hungary has to be calculated in each particular case.

When you have a company registered in Hungary, your business has every chance to flourish. The country is a clean onshore jurisdiction and thus it could not possibly face problems typical of zero-tax offshore jurisdictions. Foreigners are welcomed in Hungary and they enjoy almost the same rights in the country as locals do. We highly recommend that you seriously consider the opportunity to set up a company in Hungary. If you are interested, we will be happy to help! Please contact us via email, WhatsApp, or live chat. We always reply promptly!