Company Incorporation Hungary

Hungary has been part of the European Union since 2004 and is part of the EU’s single market. The country is a medium sized open economy in Central Europe. It can be a great place to incorporate a business, if structured well, incorporation in Hungary can be a tax-efficient solution.

Benefits include low Corporate Tax rates between 10% and 16% and no requirement to appoint local shareholders and directors, meaning that the company can be fully owned and controlled by international directors and shareholders.

Additional advantages of forming a corporate entity in Hungary include low (in some cases exemption from) capital gains and dividends tax. However, Hungarian company formation is not seen as an offshore corporate structure or a tax haven.

Some types of companies will benefit more than others in Hungary; for example a holding company, as dividends paid to any resident or non-resident person are legally tax free and any paid royalties are considered expenditures and can be deducted from corporate profits.

Company Formation FAQs

  • What are the main types of company in Hungary?
  • What are the main features of Joint Stock Companies?
  • What are the main features of Limited Liability Companies?
  • What are the main features of a Partnership?
  • How easy is it to close a Hungarian company?

Branch and Subsidiary Information

Open a Subsidiary in Hungary

Hungary has one of the lowest corporate tax rates in the EU and a number of double taxation treaties, making it an extremely tax efficient country. The establishment of subsidiaries is much quicker than branches (2-7 days) and is also more advisable from a legal point of view.

Similarly though, the set-up is regulated by the Act on Hungarian Branch Offices and Commercial Representations of Foreign-Registered Companies. Some restrictions may apply for countries outside of the EEA concerning a Hungarian representative, but generally foreign investment is non-discriminatory.

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