Question 1

What is the process for business registration in Hungary?

Accepted Answer

Choose Legal Form: A limited liability company (Kft) or a joint-stock company (Zrt)
Prepare the Necessary Documentation
Submit to Authorities: To the Company Court Registry Office (Cégközlöny Iroda) or the relevant district court, The court will issue a registration number and entry in the Companies Register (Cégnyilvántartás)
Tax and Social Security Registration: Obtain a tax number (Adószám) from the National Tax and Customs Administration (NAV)
Await Approval: Usually takes 1-2 weeks.

Question 2

What are the typical necessary documents and other obligations for the registration of a new company?

Accepted Answer

Articles of Association (Társasági Szerződés): A legal document outlining the company's general information. This document is called Deed of Foundation (Alapító Okirat) if the company has only one member

Syndicate Agreement ( Szindikátusi Szerződés ): A contract signed by the shareholders, specifying their rights and obligations, as well as the rules governing the company's operations

Proof of Identity: Copies of passports or national identity cards for all shareholders and directors

Registered Address: Documentation confirming the company's registered address

Payment of Registration Fee

Question 3

When registering a subsidiary in Hungary, what does the parent company need to provide?

Accepted Answer

Company Documents: The parent company's general information and the official Hungarian translation

Authorization Documents: A formal authorization letter, empowering a representative or agent to register the subsidiary in Hungary and sign related documents on behalf of the parent company

Proof of the parent company Address

Identification Documents: Copies of passports or national identity cards for key shareholders and directors of the parent company

Business Plan for the subsidiary.

Question 4

What other procedure should I do after successfully registering?

Accepted Answer

Registration with the competent chamber of commerce and industry

Notifications to the Central Statistical Office (KSH) and the Hungarian Tax Authority (the registration concerning the local business tax at the local government is started automatically based on a notification of the tax authority);

Company Portal (“cégkapu”) subscription;

Selection of an appropriate invoicing and/or accounting program or obtaining a stamp.

Question 5

How does Hungary's tax system affect foreign investors?

Accepted Answer

Corporate Tax Rates: A standard rate of 9% on corporate profits up to a certain threshold

Incentives for Foreign Investors: Include tax credits, grants, subsidies, and exemptions for specific industries or regions

Double Taxation Treaties

Value Added Tax (VAT): Applies to most goods and services. The standard VAT rate is 27%, with reduced rates of 5% and 18% for certain goods and services

Question 6

What legal and regulatory requirements must be met to operate a business in Hungary?

Accepted Answer

Legal requirements Company Formation

Taxation: Hungarian tax laws dictate obligations such as corporate tax payments, VAT reporting, and payroll taxes

Employment Laws: Hungarian labor laws govern aspects like minimum wage, working hours, employment contracts, and employee benefits

Accounting Standards: Hungarian companies must maintain accurate financial records and adhere to accounting standards set by the Hungarian Accounting Act. Regular financial reporting and auditing may be required.

Business Licenses and Permits: Certain industries or business activities may require specific licenses or permits from regulatory authorities

Data Protection: Compliance with data protection laws, such as the General Data Protection Regulation (GDPR) of the European Union

Question 7

What is the minimum wage in Hungary 2024?

Accepted Answer

It is essential to highlight the distinction between the two types of minimum wage in Hungary. The minimum wage applies when the position does not require a high school diploma or any higher qualification. The guaranteed minimum salary applies when the position requires at least a high school diploma.

Question 8

What is the difference between Kft. and Zrt.?

Accepted Answer

The two main types of companies in Hungary are the following: (i) limited liability company (Kft.) and (ii) private company limited by shares (Zrt.).

Question 9

How much does it cost to register a new company?

Accepted Answer

The government fee for the registration of a company may depend of the company type. The establishment of a Kft. is free of charge. The minimum capital requirement for company registration in Hungary is 3 million (3,000,000 H)UF, which is approximately 7,700 euros.

Question 10

How to open a company account?

Accepted Answer

Choose a Bank: OTP Bank, K&H Bank, Erste Bank, Raiffeisen Bank,UniCredit Bank,Bank of China
Gather Required Documents: registration certificate, articles of association, identification documents for authorized signatories, and proof of address, company  shareholders, directors, and the nature of its business activities.
Book and Attend the Appointment: Visit the bank in person.
Await Approval: This may take several days to weeks, depending on the bank's procedures.

Question 11

What are commonly needed visas?

Accepted Answer

Business Visa: This visa is suitable for individuals traveling to Hungary for business purposes (as owners or directors of companies).
Work Visa: Issued to individuals planning to work for a Hungarian company.
Investor Visa: Designed for foreign investors intending to invest a significant amount of capital in a Hungarian residential real este, real estate funds , or public purpose foundations.

Question 12

How to rent an office？

Accepted Answer

Research Online Listings: Websites such as ingatlan.com, officefinder.hu, and property.hu OR Contact Real Estate Agents
Provide company documents: as part of the leasing process
Negotiate lease terms: including rental rates, duration, and maintenance responsibilities.
Conduct Due Diligence: including inspections, zoning regulations, building permits, and environmental assessments.
Sign the lease agreement: pay the required deposit and rent, and set up utilities before moving in.

Question 13

What about the personal income tax and social contributions?

Accepted Answer

In Hungary flat rate personal income tax applies: 15%. The following contributions are generally payable: The employee will pay 18.5% of the social security contribution .The employer  will pay an additional 13 % of the social security contribution 
The total tax burden (tax + contribution) in case of normal salary is 33.5%, so the general level of net salary is 66.5% of gross salary. The net to total company cost ratio is 58.8%.
Passive incomes (such as dividends or capital gains) and the benefits in kind for employees become subject to 13% contribution, too. However, in case of capital incomes, there is an upper limit of tax liability, hence, social contribution tax is only payable until the natural person’s income (both from non-independent and independent work and capital gains) reaches twenty-four times the mandatory minimum wage.

Question 14

Can I live in Hungary without knowing the language?

Accepted Answer

Hungarian is the country's only official language. English is spoken by more and more people, especially in Budapest. Around 25% of the population speaks English while 10% know German. For a comfortable life in the country, it is best to learn the language at a basic level.

Question 15

As a company director, do l have to live in Hungary Full-time to mantain my residency?

Accepted Answer

No, company directors are not even required to be residents or citizens of Hungary and therefore, do not have to live there full-time, even if they have a residence status. The residency requirements for company directors in Hungary typically focus more on the director's involvement in the company's operations and management rather than physical presence in the country.

Question 16

How about Hungary regional aid intensity?

Accepted Answer

The maximum regional aid intensity in Hungary varies between 20% and 50% (which might be increased further in the case of SMEs).
Central Hungary (excluding Budapest) is expected to be eligible for up to 50% regional aid intensity. Central Transdanubia (max. 30% aid intensity ) and in Western Transdanubia (max. 30% aid intensity). 
In the case of large investments with over EUR 50 million eligible costs, the intensity rate is adjusted for the portion of costs exceeding EUR 50 million, based on EU rules.
Moreover, in the counties eligible for Just Transition Fund (Borsod-Abaúj-Zemplén, Heves and Baranya counties), the maximum state intensity can be increased if the EU Commission approves such status of these counties.

Question 17

What is the “company gate” in Hungary and why do I need it?

Accepted Answer

The company gate (or “Cégkapu” in Hungarian) is a web portal where you can access official mail the various Hungarian authorities send to your company. All companies are obliged to register. 
Logically, the person registering the company at the company gate should be one of the following persons: the managing director, the owner,the company’s lawyer, or the company’s accountant.

Question 18

Does my company necessarily need an accountant?

Accepted Answer

Yes, in Hungary, all companies must submit regular accounting reports (in Hungarian) from the date of their incorporation.

Question 19

What are the most important dates for my accountant?

Accepted Answer

fiscal year closing / annual reports due: May 31st for the previous fiscal year
VAT declarations and payments: on the 20th of each month, for the preceding month or quarter (depending on how often the company declares VAT)
payroll taxes & social contributions: on the 12th of each month, for the preceding month
corporate tax advances: paid quarterly on the 20th of July, October, January and April, in 4 equal installments, calculated on the basis of the previous closed fiscal year
local business tax advance: paid twice a year (15th March and September)

Question 20

How should I write my business plan ?

Accepted Answer

To register a company in Hungary, you do not need to present a business plan for the registration itself, however a business plan including market analysis, business objectives, budget, and forecasts is always useful. Furthermore, in order to receive a residence permit for the owner or the director of a company , a business plan which may include the following will be highly recommended:
the company is viable and its plans are realistic
the director (i.e. the applicant) is capable of running the company successfully
the director’s full-time presence in Hungary is required for the company’s operations(Not necessary to do it, but we recommend you to write this).
the company will produce enough profit to support its own operations as well as the livelihood of the applicant and the dependents of the applicant.

Question 21

How much living cost in Hungary?

Accepted Answer

The cost of living in Hungary is generally considered low by European standards. A single person living with the cheapest options, might need around 160.000-200.000 Ft/month (416-520 EUR) for living.

Question 22

What the average rent fee if I rent an apartment ？

Accepted Answer

Renting a room / an apartment; Cost can be very different depending on living in or outside of the capital, HUF 70,000–180,000 or HUF 120,000–220,000 in Budapest a month plus overheads and utility bills. The landlords usually require you to pay a deposit in advance, which usually equals a minimum of 2 months’ rental fee (this will be paid back when you move out.)

Question 23

What’s the currency in Hungary and how to open personal bank account?

Accepted Answer

Forint (HUF) has been the local currency in Hungary. Banknotes come in denominations of 500, 1000, 2000, 5000, 10,000 and 20,000. Six different coins are in use: 5, 10, 20, 50, 100 and 200 forint coins. 
You can also open a bank account as the non-residential account service is designed especially for foreign nationals. All you need is your passport. You can open a HUF account or any other currency account.

Question 24

Who can buy property in Hungary, and what are their rights and obligations?

Accepted Answer

As a Chinese citizen, you must obtain permission for real estate purchase at the Government Office of the county  the property is located. The permission is obtained by the lawyer who accompanies the deal. The procedure - including obtaining the permission and the normal registration procedure at the land registry takes up to 4-5 weeks.
Foreigners must fully compensate for property purchase, ownership, and maintenance expenses. Buyers pay the title transfer stamp duty - general rate is 4% of the purchase price - , owners pay utility charges and the annual real estate tax, and sellers have to pay the capital gains tax.

Question 25

What the expenses for property ownership and maintenance?

Accepted Answer

The annual property tax maximum rate is about 3% of the property's cadastral value, or about € 1 per ㎡ a year.
Monthly utility costs depend on the property area, the energy efficiency class of the building, and the water and electricity consumption. On average, owners of 85 ㎡apartments pay €100-230
Property insurance in Hungary is optional. Only properties purchased with a mortgage are  subject to obligatory insurance.

Question 26

What the taxes for selling real estate in Hungary?

Accepted Answer

When selling real estate in Hungary, the owner has to pay a capital gains tax. The tax rate is 15% of the difference between the selling price and the property purchase expenses.The longer the owner holds the property, the lower the tax rate upon selling. The capital gains tax is not paid if the property possession time is at least 5 years.

Question 27

What are the main industries driving the Hungarian economy for potential investment?

Accepted Answer

Automotive Manufacturing: Hungary is a key player in the European automotive industry, with major manufacturers like Audi, Mercedes-Benz, and BMW operating in the country.
Electronics: Hungary has a strong electronics industry, particularly in the production of consumer electronics, telecommunications equipment, and electronic components.
Pharmaceuticals: The pharmaceutical industry is a significant contributor to Hungary's economy, with several multinational pharmaceutical companies having manufacturing facilities in the country.
Information Technology: Hungary has a growing IT sector, with a focus on software development, IT services, and innovation hubs.
Agriculture: Agriculture remains an important sector in Hungary, with a diverse range of agricultural products including cereals, fruits, vegetables, and livestock.

Question 28

What is HIPA and how can it helps me?

Accepted Answer

HIPA, the Hungarian Investment Promotion Agency, is a government-backed organization dedicated to assisting foreign investors interested in doing business in Hungary. It.dedicated to attracting foreign direct investment (FDI) and promoting Hungary as an ideal investment destination. 
HIPA serves as a one-stop resource for foreign investors, navigate the investment process, and maximize their success in Hungary's dynamic business environment.

Question 29

Besides HIPA, are there other government institutions in Hungary that can assist me?

Accepted Answer

Hungarian National Tradehouse (HNTH): Provides information and support for international trade and investment opportunities in Hungary.
National Office for Research, Development and Innovation (NKFIH): Offers resources and funding opportunities for research, development, and innovation projects.
Hungarian Chamber of Commerce and Industry (MKIK): Provides business advisory services, networking opportunities, and support for foreign investors.
Hungarian Tax and Customs Administration (NAV): Offers guidance on tax regulations, customs duties, and other financial matters related to business operations in Hungary.
Hungarian National Bank (MNB): Oversees monetary policy and provides financial stability and regulatory support for businesses.

Question 30

How can I get health insurance?

Accepted Answer

National Health Insurance Fund (NHIF): everyone legally working in Hungary must contribute to NHIF to receive basic healthcare coverage(TAJ card)
Private insurance companies:You can choose to purchase private health insurance for more comprehensive medical coverage. 
Employer-provided health insurance: If you are employed in Hungary, your employer may offer health insurance as part of employee benefits.

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