Setting Up a Company in Hungary

The most popular company type to establish in Hungary is the Kft., which corresponds to a Slovak s.r.o. (limited liability company).

The Hungarian companies register may also be of use to you.

Company Types in Hungary

This form of company is comparable to a Slovak limited partnership (komanditná spoločnosť).
This form of company is comparable to a Slovak general partnership (verejná obchodná spoločnosť).
This form of company is comparable to a Slovak limited liability company (s.r.o.).
This form of company is comparable to a joint-stock company, but without a public offering of shares.

This form of company is comparable to a joint-stock company, but with a public offering of shares.

Taxation in Hungary

Corporate income tax is charged at 9% and local business tax at 2%. For Hungarian residents, dividends are taxed at 15%.
The standard VAT rate is 27%.
Annual fees for the companies register and the registered office.

Registering for VAT When Setting Up a Company in Hungary

One significant advantage of forming a company in Hungary is how simple VAT registration is. VAT registration, i.e. VAT payer status, can be obtained there within two to three days.

Non-VAT-registered company – a company that has not registered for VAT. It need not file VAT returns, but neither can it reclaim VAT (for instance on the purchase of a motor vehicle) or buy goods free of VAT when importing them from abroad.

Monthly VAT payer – a company that is registered for VAT and must file VAT returns every month. It is entitled to reclaim VAT on purchases such as a motor vehicle, mobile phone, PC or laptop, or property or another investment. When buying property that another VAT payer has owned for more than 5 years, a monthly VAT payer (unlike other VAT payers) pays only the price excluding VAT. A key advantage is that no VAT is paid on cross-border trade.

Quarterly VAT payer – must file a VAT return every quarter but waits longer for VAT refunds than a monthly VAT payer.