Company Incorporation in Hungary
Company incorporation in Hungary offers a strategic gateway to the European market with one of the lowest corporate tax rates in the EU, just 9%. It’s an attractive destination for entrepreneurs seeking a legally robust, yet flexible environment to establish their business. Setting up a company here is fast and efficient. In most cases, you can register your company in as little as 1–2 business days, with the entire process managed remotely if needed.
Hungary’s digital infrastructure allows for fully online company registration, supported by experienced legal representatives. Whether you're expanding your global footprint or launching a new venture, Hungary provides a cost-effective and straightforward solution, ideal for businesses with international ambitions and long-term growth plans.
Why Hungary?
Hungary has become one of the most attractive destinations for entrepreneurs seeking to expand or relocate their business within Europe.
It offers a rare combination of cost-efficiency, legal certainty, and international accessibility, making it ideal for both startups and established companies looking to optimize their operations.
Below are six key advantages that make company registration in Hungary a strategic move for forward-thinking business owners.
6 key benefits of incorporating in Hungary
Hungary offers a flat corporate tax rate of 9%, the lowest in the European Union. This gives businesses a significant edge in terms of profitability and reinvestment potential.
Whether you’re a small enterprise or a multinational group, this favorable rate applies across the board.
Lower taxation not only enhances your bottom line but also opens up more opportunities to scale efficiently and attract investors.
The business incorporation process in Hungary is fast, modern, and fully digital. A private limited company (KFT) can typically be registered within 1 to 2 working days, provided all documents are in order.
The process is legally secure and managed by licensed attorneys, ensuring full compliance with local regulations.
In most cases, online company registration in Hungary can be completed without your physical presence.
Hungary’s central location in Europe offers seamless access to both Western and Eastern markets. It’s part of the European Union, the Schengen Area, and several bilateral trade agreements.
This makes it an ideal hub for companies looking to serve clients across the EU while keeping operational costs low.
Its extensive infrastructure and multilingual talent pool further support international expansion.
Hungary does not impose withholding tax on dividends paid to foreign entities or individuals, under most treaty and EU-based scenarios.
This significantly enhances after-tax returns for foreign shareholders and simplifies international profit repatriation.
This advantage positions Hungary as a preferred jurisdiction for international holding structures and cross-border investment flows.
The country boasts a stable and reliable financial ecosystem, supported by EU banking standards and a transparent legal framework. Local banks are highly experienced in handling business accounts for foreign-owned entities, and legal services are readily available in English.
This infrastructure ensures that once your company is incorporated, you can operate confidently and efficiently with minimal administrative friction.
Hungary is increasingly popular among digital entrepreneurs, SaaS companies, and online retailers. With low operational costs, access to skilled developers, and a pro-business regulatory environment, it provides fertile ground for tech-driven growth.
Incorporating in Hungary also allows startups to benefit from IP protection, R&D incentives, and proximity to major European tech hubs like Berlin, Vienna, and Warsaw.
6 challenges to consider
While Hungary offers a highly competitive environment for business incorporation, it's important to be aware of potential challenges that may affect operations. Being prepared can help you plan more effectively and avoid costly delays.
Here are six key considerations when planning private limited company registration in Hungary.
Although English is widely used in business circles, most official documents and procedures are in Hungarian. This includes legal contracts, tax filings, and communication with public institutions.
Working with local advisors or bilingual legal representatives is essential to ensure compliance and avoid misunderstandings.
Hungary applies strict and detailed VAT and corporate tax compliance requirements. Monthly VAT filings are common, and tax deadlines are closely monitored by the authorities.
Non-compliance can lead to penalties, so it's critical to partner with qualified accountants familiar with the Hungarian tax system.
While incorporating your business may take only a few days, opening a corporate bank account can take significantly longer. Banks require thorough due diligence, including in-person verification and documentation.
Be prepared for multiple steps and extended timelines, especially if you're registering the company remotely.
Hungary has a standard VAT rate of 27%, the highest in the European Union. This can impact pricing strategies, especially for B2C businesses and online retailers.
Understanding VAT refund rules and exemptions will help manage cash flow and improve tax efficiency.
Hungarian law mandates rigorous bookkeeping and reporting requirements, including detailed monthly, quarterly, and annual submissions. Audits are also more frequent than in some other jurisdictions.
Outsourcing to a local firm that offers accounting and compliance services tailored to foreign-owned companies can streamline operations.
Although incorporation is fast, some administrative procedures can be slower, particularly when dealing with government approvals, permits, or changes to company structure.
Having local legal representation helps you navigate the system more efficiently and minimize unnecessary delays.
Banking system and requirements
Hungary’s banking system is well-regulated, stable, and integrated into the EU financial framework.
However, opening and managing a corporate account requires preparation, especially for foreign-owned companies.
Understanding the key steps and obligations will help you operate smoothly from day one.
Opening a bank account
To open a corporate account, you’ll need to provide detailed documentation, including company formation papers, personal identification of directors, and proof of business activity.
Most banks require in-person verification by at least one company representative, even if the company was registered online. Processing times can vary from a few days to several weeks.
Choosing a bank with experience serving international clients can make the process more efficient and reduce friction.
Digital banking alternatives)
Some entrepreneurs explore fintech solutions or digital banks to avoid the complexity of traditional banking.
While these platforms offer fast onboarding and lower fees, not all are accepted for official business use under Hungarian law.
If you plan to register for VAT or deal with regulated industries, a local EU-compliant bank account may still be mandatory.
Digital banks work best as complementary solutions, offering flexibility for transfers, payments, or multi-currency management.
Compliance, taxes, and reporting
Operating a company in Hungary comes with strict tax obligations and financial reporting standards. Staying compliant requires regular submissions, proper documentation, and coordination with licensed professionals.
Below is a breakdown of key components to consider.
Corporate tax
Hungary’s corporate income tax rate is 9%, one of the most attractive in Europe. This rate applies to both domestic and foreign-owned entities, regardless of revenue.
There are no thresholds or brackets, which simplifies long-term tax planning.
Dividend tax
In most cases, Hungary does not impose withholding tax on outbound dividends paid to foreign entities or individuals, provided treaty or EU rules apply.
This makes Hungary especially attractive for international holding companies or businesses with cross-border shareholders.
VAT
The standard VAT rate in Hungary is 27%, applicable to most goods and services. Some sectors benefit from reduced rates or exemptions, but these are limited and must be verified case by case.
Businesses must register for VAT when their annual turnover exceeds HUF 12 million (approximately €31,000), or earlier if engaging in intra-EU trade.
Reporting
Hungarian companies must submit monthly or quarterly VAT returns, annual financial statements, and various statutory reports. These documents must comply with local standards and may require digital submission via Hungary’s government portal.
Hiring a local accountant with experience in international business is not optional, it’s a key investment for ensuring full compliance.
Residency, visas, and foreign ownership
Hungary offers a business-friendly environment for foreign entrepreneurs, with clear rules for company ownership, residency, and visa requirements.
Understanding these frameworks will help you plan your relocation, expansion, or remote management effectively.
Foreign nationals can own 100% of a Hungarian company, including private limited companies (KFTs), without requiring local partners or sponsors.
If you plan to manage the company from within Hungary, you may apply for a residency permit based on business activity.
This typically includes proof of company formation, a business plan, and evidence of sufficient financial means.
In most cases, visa-free stays of up to 90 days apply to non-EU citizens from many countries.
For longer stays or operational involvement, residency and work permits are required, and the application process is best handled with legal support.
EU citizens do not need a visa to live or work in Hungary but must register their residence after 90 days if staying long term.
Estimated time to incorporate
Choose company name and structure: 1 day
Start by selecting a unique company name and deciding on the appropriate legal structure. For most entrepreneurs, the KFT (private limited company) is the preferred option due to its flexibility and limited liability.
This step can be completed quickly with legal assistance.
Prepare documents and appoint local accountant: 1–2 days
You'll need to prepare articles of association, proof of registered office, and director/shareholder details. Appointing a local accountant is required by law, especially for VAT reporting and ongoing compliance.
A lawyer will coordinate document preparation to ensure accuracy.
Submit incorporation forms via lawyer: 1 day
Only registered lawyers can file incorporation documents with the Hungarian Court of Registration. This is a fully electronic process, typically completed in 24 hours.
Legal representation is mandatory at this stage to ensure full compliance.
Receive company registration number and tax ID: 1–3 days
Once approved, your private company will receive a registration number and tax identification code. These credentials allow you to operate legally and apply for a bank account and VAT number.
Processing time varies depending on workload and documentation quality.
Open bank account and activate company: 3–5 days
The final step involves opening a corporate bank account and activating your business operations. The timeline depends on the bank's due diligence process and whether remote identification is possible.
After the account is opened, your Hungarian company is fully operational and ready to trade.
Hungarian business culture: what to expect
Hungarian business culture combines formality with efficiency. Meetings typically follow a structured agenda, and punctuality is highly valued. Professional communication, especially during initial interactions, tends to be polite, reserved, and detail-oriented.
Decision-making may take time, especially within larger organizations. However, once trust is built, relationships are reliable and long-lasting.
English is widely spoken in business, but legal and government interactions will require Hungarian documentation and interpretation.
Being well-prepared and working with local experts will help you navigate the system with confidence and cultural awareness.
How C2Z Advisory helps you set up in Hungary
At C2Z Advisory, we provide end-to-end support for entrepreneurs and companies seeking to enter the Hungarian market. From choosing the right structure to ensuring full compliance, our team ensures seamless execution from A to Z.
We handle legal filings, connect you with reliable accountants, and guide you through the banking and tax setup process.
With our global reach and local insight, we help you build a business foundation that’s fully operational from day one.
Our international presence means we are equipped to serve clients in every corner of the world, adapting to your business model and timeline.
Frequently asked questions
Yes. Hungary allows 100% foreign ownership of local companies, including the most popular legal form, the Kft (Korlátolt Felelősségű Társaság or private limited company).
There are no restrictions based on nationality or residency, making Hungary one of the most open jurisdictions in the EU for foreign entrepreneurs and investors.
This full ownership structure allows you to maintain complete control over operations, strategy, and profit distribution, while operating under a favorable EU legal framework.
No. Directors are not required to live or be physically present in Hungary to run a company. However, legal representation by a licensed Hungarian attorney is mandatory throughout the incorporation process and for certain post-registration actions.
Remote management is entirely possible, especially when working with a local advisory firm that handles day-to-day administrative and compliance tasks on your behalf.
The minimum share capital required for a Hungarian Kft is HUF 3 million (around €7,700). This amount can be fully paid in cash or as in-kind contributions such as assets or intellectual property.
While the capital must be declared during incorporation, it doesn’t need to be transferred immediately in full in all cases.
However, before dividend payments or certain legal changes, the full contribution must be verifiable.
In general, most Hungarian banks require the personal presence of at least one company representative during the account opening process.
This is due to strict EU-level anti-money laundering (AML) regulations and the bank's own due diligence procedures.
Some banks may offer limited remote onboarding via video verification or through a representative, but this remains the exception rather than the norm. It’s advisable to plan a brief in-person visit or work with advisors who can schedule and coordinate everything in advance.
If all required documents are in place, the company incorporation process typically takes 3 to 5 business days.
This includes drafting the deed of foundation, submitting applications through a lawyer, and receiving your company registration number and tax ID.
However, timelines may vary depending on whether you're setting up VAT registration, opening a bank account, or handling residency permits simultaneously.
With expert guidance, most businesses are fully operational within one to two weeks.
Hungarian companies benefit from a 9% flat corporate income tax, the lowest in the European Union. In addition, businesses may be subject to a local business tax imposed by municipalities, typically ranging between 0% and 2% of net revenue.
If your company engages in taxable transactions, VAT registration is required. The standard VAT rate in Hungary is 27%, with reduced rates applied in specific sectors.
For foreign shareholders, dividends are generally exempt from withholding tax, particularly under EU law or double taxation treaties.
This structure makes Hungary especially attractive for international investors and holding companies.