Published on and written by Cyril Jarnias
Hungary, located in the heart of Central Europe, offers numerous advantages for entrepreneurs looking to establish their business there. This article presents the main reasons for setting up a company in Hungary, along with all the practical information to successfully carry out your project.
To discover more articles about setting up a company in Hungary:
Hungary has positioned itself as a highly attractive tax destination for businesses in the heart of the European Union. With [...]
Hungarian labor law has undergone profound transformations in recent decades, oscillating between socialist heritage and adaptation to European standards. This [...]
Hungary, a country at the heart of Central Europe, offers numerous opportunities for businesses seeking to recruit qualified personnel. With [...]
Hungary offers a favorable environment for foreign entrepreneurs looking to establish their businesses. With one of Europe’s lowest corporate tax [...]
Hungary offers a favorable environment for foreign entrepreneurs looking to establish their business there. With advantageous taxation and simplified procedures, [...]
Hungary, situated in the heart of Central Europe, offers an evolving economic landscape that is increasingly attracting attention from entrepreneurs [...]
Hungary, with its strategic position in the heart of Central Europe and its rapidly growing economy, is attracting more and [...]
Hungary is increasingly establishing itself as an attractive destination for entrepreneurs looking to launch their startup in Central Europe. With [...]
E-commerce in Hungary has experienced explosive growth in recent years, radically transforming the country’s commercial landscape. With an increasingly connected [...]
Hungary, with its undeniably charming capital Budapest, is attracting an increasing number of foreign investors looking to acquire real estate. [...]
Hungary: A Land of Opportunity for Businesses
Hungary offers several major advantages for foreign investors:
Strategic geographical position: Located at the crossroads of Central and Eastern Europe, Hungary offers privileged access to Eastern European and Balkan markets.
Favorable economic environment: The country benefits from sustained economic growth and controlled inflation. The Hungarian government implements proactive policies to attract foreign investment.
Skilled and competitive workforce: Hungary has a well-trained active population, particularly in technical and scientific sectors. Labor costs remain competitive compared to Western Europe.
Modern infrastructure: The country has a developed transportation network (highways, railways, airports) facilitating commercial exchanges.
Advantageous tax framework: Hungary offers one of the lowest corporate tax rates in Europe (9%), along with numerous incentive schemes for investors.
Legal Structures Available to You
Several legal forms are available to entrepreneurs wishing to set up a company in Hungary:
Limited Liability Company (Kft): This is the most common form for SMEs. It requires a minimum share capital of 3 million forints (approximately €8,000).
Joint Stock Company (Zrt): This structure is suitable for larger-scale projects. The minimum share capital is 5 million forints (approximately €13,500).
Limited Partnership (Bt): It includes at least one general partner and one limited partner. No minimum capital is required.
Branch Office: It allows a foreign company to operate in Hungary without creating a separate legal entity.
Attractive Taxation for Businesses
Hungary stands out for its particularly advantageous corporate taxation:
Corporate tax: The profit tax rate is set at 9%, one of the lowest in Europe.
VAT: The standard rate is 27%, but reduced rates of 18% and 5% apply to certain products and services.
Tax incentives: Numerous schemes exist to encourage investment, innovation, and job creation (tax credits, subsidies, etc.).
Tax treaties: Hungary has signed double taxation avoidance agreements with many countries, facilitating international exchanges.
Good to know:
Companies can benefit from a full corporate tax exemption for the first 5 years of operation, subject to certain investment and job creation conditions.
Setting Up Your Company in Hungary: Step-by-Step Guide
Here are the main steps to establish your legal structure in Hungary:
1. Choose the legal form suitable for your project 2. Reserve your company name with the commercial register 3. Draft the company statutes with the help of a Hungarian lawyer 4. Open a bank account and deposit the share capital 5. Obtain necessary permits according to your activity 6. Register the company with the commercial court (timeframe: 15 days) 7. Register with tax and social security authorities
Total timeframe: Approximately 1 month to finalize your company setup.
Cost: Between €1,000 and €2,000 (excluding share capital) for administrative and legal fees.
Good to know:
It is highly recommended to hire a local lawyer to assist you with the setup procedures, particularly for drafting statutes in Hungarian.
Hungary Compared to Other Offshore Jurisdictions
Compared to other popular destinations for offshore company formation, Hungary offers several advantages:
- A stable legal and tax framework, compliant with European standards
- Highly competitive taxation within the European Union
- Facilitated access to the European single market
- A more favorable brand image than some tax havens
- Overall operating costs lower than in Western Europe
However, other jurisdictions like Cyprus, Malta, or Ireland may offer specific advantages depending on your activity and tax strategy.
Your Social Obligations as an Employer
If you plan to hire staff in Hungary, here are the main obligations to know:
Social contributions: The employer must pay social contributions representing approximately 28% of the gross salary.
Minimum wage: It is set at 200,000 forints per month (approximately €540) in 2025.
Working hours: The legal working time is 40 hours per week.
Paid leave: Employees are entitled to a minimum of 20 days of paid leave per year.
Social protection: Employees benefit from health, unemployment, and pension coverage.
Good to know:
Hungary offers incentive schemes for hiring recent graduates and long-term unemployed individuals, allowing for reduced social charges.
Opening a Bank Account for Your Business
Opening a professional bank account is a crucial step for your Hungarian company. Here is the procedure to follow:
1. Choose a bank: Opt for a recognized institution offering services tailored to international businesses.
2. Prepare the necessary documents: – Company statutes – Extract from the commercial register – Identification documents of directors and shareholders – Proof of company address – Business plan (sometimes requested)
3. Schedule an appointment with a bank advisor
4. Sign the account opening contract
5. Make an initial deposit (amount varies by bank)
Timeframe: Allow about 1 to 2 weeks for the effective account opening.
Cost: Opening and management fees vary by institution but generally remain reasonable.
Good to know:
Some banks offer online services allowing you to initiate the account opening procedure remotely, thus facilitating the process for foreign entrepreneurs.
Promising Business Sectors in Hungary
Hungary offers numerous opportunities in various economic sectors:
Automotive industry: The country is a major hub for automotive production in Central Europe.
Information technology: Budapest has become a stronghold for tech startups and R&D centers.
Biotechnology and pharmaceutical industry: Hungary has recognized expertise in these fields.
Logistics and transport: Its geographical position makes it a strategic logistics hub.
Tourism: The sector is experiencing sustained growth, particularly in thermal and medical tourism.
Renewable energy: The government strongly encourages investments in this sector.
Building Your Team: Recruitment in Hungary
To recruit effectively in Hungary, follow these tips:
1. Precisely define your skill requirements
2. Use local recruitment channels: – Hungarian job sites (profession.hu, jobline.hu) – Specialized recruitment agencies – Professional networks (LinkedIn) – Partnerships with universities for recent graduates
3. Write your job offers in Hungarian and English
4. Prepare to conduct interviews in English or with the help of an interpreter
5. Familiarize yourself with Hungarian corporate culture
6. Offer attractive compensation packages, including in-kind benefits appreciated locally (meal vouchers, supplementary health insurance, etc.)
Good to know:
English proficiency is widespread among young Hungarian graduates, facilitating the integration of international teams.
Disclaimer: The information provided on this website is for informational purposes only and does not constitute financial, legal, or professional advice. We encourage you to consult qualified experts before making any investment, real estate, or expatriation decisions. Although we strive to maintain up-to-date and accurate information, we do not guarantee the completeness, accuracy, or timeliness of the proposed content. As investment and expatriation involve risks, we disclaim any liability for potential losses or damages arising from the use of this site. Your use of this site confirms your acceptance of these terms and your understanding of the associated risks.
Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
