Hungarian Company Formation
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Hungary is a low tax jurisdiction with a medium sized open economy in Central Europe. Incorporating the right corporate and management structures in the country will create a tax efficient company with access to EU and other consumer markets worldwide. The company can be fully owned and controlled by international directors and shareholders, and there is no requirement to appoint local shareholders and directors. This makes it advantageous for foreign companies involved in international business operations.
Universal Company Incorporations will support your incorporation from start to finish. Our team will help you make the most of the available benefits by implementing initiatives and solutions to specifically address your business requirements.
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Further Information
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There are three main types of company to incorporate in Hungary. These include:
- Joint Stock Company (public or private)
- Limited Liability Company
- Limited Liability Partnerships
The most popular format is the Joint Stock Company, as the company founder does not hold any liability for the business operations. There are two types of this company form; public (Nyrt) which sells its shares publicly, and private (Zrt) which sells its shares through a private offer. Hungarian regulations state that businesses in certain sectors, i.e. finance, must incorporate a Joint Stock Company.
The most common form of company is the Limited Liability Company as its requirements are accessible for all types of business. The shareholders’ liability is limited to their capital investment in the company. Only one owner and one director are required, and both individuals and companies are permitted.
A Partnership is less common but can be beneficial for certain types of business, usually small family run enterprises. There must be at least one general partner and one limited partner. The general partner’s liability extends to their private assets, and the limited partner is only liable up to the value of their investment. There is no minimum capital requirement.
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The main benefit of incorporating in Hungary is the efficient tax regime. Although this is not a financial incentive as such, it can be very advantageous for foreign investors. The benefits include low Corporate Tax rates, standing between 10% and 16%, and allowance for international director and shareholders. There are also reductions and exemptions from capital gains and dividends tax. Some forms of company will benefit greatly from additional tax reductions. In particular, holding companies have tax free dividends and royalty deductions.
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