Are you planning to launch your company in Hungary? Here is a guide that provides tips on the registration of limited liability companies in the country.
Advantages of doing business in Hungary
Hungary is a member country of the European Union, which means it is in the jurisdiction of Europe and the positive image of the country makes it suitable for business. The country is not included in the blacklist of offshore zones; Hungary’s banking system is stable and standard and opening a bank account with any of the country’s local banks takes one day. Obtaining a residence permit in Hungary means you can move visa-free around countries in the Schengen area.
Creating a business in Hungary is quick and affordable, the corporate tax for companies is low at 9% and 0% for tax on dividends and capital gain, and the maximum tax burden for any country operating in the country is 11%.
Requirement for incorporation of an LLC in Hungary
The article of association is an important document that explains the company’s legal form and business operation or activities and is necessary for the registration of your LLC in the company register at the Court.
The court also requires a commercial license, a document for incorporation, the company address, and a unique name for the entity. The receipt of the fees bank for the company registration should also be included for filing at the company register of the court.
The incorporation of the LLC also requires an attorney to represent the company legally and complete all the necessary steps of registration. The documents submitted should be legally backed by the power of attorney.
Methods of registration
There are two methods used to register a Limited Liability Company with the Court of Registration in Hungary:
The official website
The online method is the fastest method, the deed of association and application must be countersigned by the attorney or notary. An attorney is required during the registration process. There is a standard charter document provided by the Hungary Companies Act, which can be copied and filled in to ensure a swift process. Through the official website of the court of registration, the application can be completed in one day.
General application
After the decision of the shareholder on their terms and conditions in the Deed of association is made, the registration process can be continued. The registration process may last longer than a week.
The fee paid for registration through the online process is 50,000 HUF while the general application is 100,000 HUF.
Incorporation of Limited Liability Company
There are preliminary activities to undertake before applying to the court of registration for incorporation. Hungary has two most common company types which are the limited liability company and joint stock company. The following are the procedures relating to registering a limited liability company in Hungary.
Articles of Association
The articles of association should be prepared. The article of association is a representation of the fundamental act of setting up a business in Hungary. The document expresses the legal form and business activities of the company, the document also contains information about the business entity and shareholders (the limited liability can be registered with one investor).
Business name
Choose the business name and ensure that it is unique, and the business type should reflect the name.
Registration with the companies’ court
Register the company in the Hungarian company’s court either online or through a general application and receive a registration certificate.
Others
- Obtain a taxpayer number from the state tax department
- Register the company with the Hungary social security service
- Open a corporate bank account
Tax registration of the Limited Liability Company
The court registers the company with the state tax authority and the statistical office for income taxes and VAT through an online system. This is done during the registration process at the Hungarian Trade Registry and all forms of company in the country must register for social security through the use of an application form, to obtain the Trade registration certificate.
