What are the main arguments for setting up a business in Hungary?
- Low Tax Rates: Hungary has a favorable tax system, it has one of the lowest corporate tax rates in the European Union, ranging from 9% to 19%, and the personal income tax of private individuals is 15%. This makes HU an attractive location for companies looking to maximize their profits.
- Strategic Location: Hungary is located at the crossroads of Europe, making it an ideal location for companies looking to take advantage of the continent’s diverse markets. It has a well-developed infrastructure, good transportation links to other European countries, including a well-connected highway system, multiple airports, and a major port on the Danube River. From Budapest, you can get to London in 2.5 hours, Dubai in 5 hours and Munich in 1 hour by plane.
- Digitalization: The government is obliged to communicate with you digital only; so are you.
- Low Labor Costs: Labor costs in Hungary are much lower than in other European countries, making it a cost-effective option for companies looking to minimize overhead expenses.
- Skilled Workforce: Hungary has a well-educated and highly-skilled workforce that is well-equipped to handle the challenges of the modern workplace.
- Strong Government Support: The Hungarian government is very supportive of foreign investment, offering incentives and tax breaks to companies that choose to establish operations in the country.
- Easy to Establish: Only a smartphone with a camera and an ID is needed.
How to make it happen?
- Find a Lawyer: Our lawyers have years of experience in establishing companies. We know the process and help you to prepare the founding documents.
- Choose a Company Type: Choose the type of company you would like to establish.
- Decide on a Name: Choose a name for your company that is unique and complies with the Hungarian Companies Act.
- Prepare the Founding Documents: Prepare the founding documents, which include the articles of association and the company’s bylaws.
- Appoint the Board of Directors or the Managing Director: Appoint the managing director or a „management board” (i.e. board of directors) and select a „chief executive officer” (i.e. company director).
- Register the Company: Register the company with the local court and obtain a business registration number.
- Open a Bank Account: Open a bank account for the company in Hungary.
- Apply for Licenses and Permits: Apply for any necessary licenses and permits required for the operation of the company.
The four types of business entities in HU are the followings:
- Limited Liability Company(Kft.), with a minimum registered capital requirement of HUF 3,000,000;
- General Partnership (Kkt.), with no minimum registered capital requirement;
- Limited Partnership (Bt.), with no minimum registered capital requirement;
- Private and Public Company Limited by Shares (Zrt. & Nyrt.), with a minimum registered capital requirement of HUF 5,000,000 for private and HUF 20,000,000 for public limited companies.
The above factors and the low registered minimum capital requirements make Hungary an attractive location for businesses looking to expand into the European market.
If you are one of those who want to start or expand your business and for this purpose establish a company in Hungary, feel free to contact dr. Balázs Ács from NZP NAGY LEGAL. Balázs and the NZP Team will be pleased to give legal counsel and represent you.
The author of this article is on the list of lawyers and law firms provided by the U.S. Embassy of Hungary as a convenience to U.S. citizens and companies.