Understanding Company Registration in Hungary

Hungary offers a range of business structures for foreign investors, including public and private limited companies, limited liability partnerships, and more. Selecting the appropriate entity is critical, as each type carries distinct legal and tax obligations. Establishing a subsidiary in Hungary can enhance your firm's credibility and facilitate global expansion, as local presence often builds trust with partners and clients.

Public Limited Company (Nyrt/Zrt)

Hungarian public limited companies may be private or public, depending on share distribution. The minimum share capital is HUF 5 million for private entities and HUF 20 million for public ones.
A board of directors is mandatory for all public limited companies.
Public entities must establish a supervisory board, general meeting, and audit committee.
Private companies may opt out of a supervisory board but must ensure shareholders hold at least 5% of voting rights.

Limited Liability Company (Kft)

This popular structure requires a minimum capital of HUF 500,000 and functions similarly to private limited companies in other jurisdictions.
At least one shareholder and one managing director are required, with liability limited to their capital contributions.

General Partnership (Kkt)

General partnerships lack legal personality and have no minimum capital requirement.
All partners bear unlimited liability for company debts, and at least two partners must assume joint responsibility.

Limited Partnership (Bt)

Similar to general partnerships, limited partnerships have no legal status or minimum capital.
At least one partner must assume unlimited liability for obligations.

Company Registration Process in Hungary

The registration process typically involves:

Preparation of incorporation documents by a Hungarian lawyer, taking approximately one day.
Opening a corporate bank account, usually completed within one day.
Electronic submission to the court of registration for company enrollment and tax ID acquisition, requiring constitutional documents and fee payments.
Registration with tax authorities, municipalities, chambers of commerce, and social security within 15 days of commencing activities.
Submission of employee data via government portals upon hiring.

Establishing a Presence as a Foreign Enterprise

Foreign companies can enter the Hungarian market through:

Subsidiary Formation

A subsidiary operates as a separate legal entity, managing local taxes and operations independently while maintaining ties through board representation.

Branch Office

Branches lack legal independence; the parent company remains liable for all activities, including debts, and must register with commercial and social security registries.

Representative Office

This option supports non-profit activities like storage or marketing. While exempt from local taxation, registration is still required.

Hungarian Corporate Law Framework

The Companies Act serves as the primary legislation, governing incorporation, taxation, and dissolution. Regular updates to compliance requirements necessitate ongoing monitoring or professional consultation to mitigate risks.

Streamlined Talent Acquisition Without Entity Setup

For businesses seeking to hire in Hungary without establishing a legal entity, SailGlobal offers Employer of Record (EOR) services. As the legal employer, SailGlobal manages payroll, benefits, tax compliance, and regulatory obligations, allowing you to focus on core business growth while ensuring full legal adherence.

Company Registration in Hungary: A Guide for Foreign Businesses