All The Advantages of Company Incorporation in Hungary


Hungary is a central European, relatively stable member state of the European Union, having joined the EU in 2004. The country is becoming an increasingly popular option for company incorporation among clients from all over the world for a number of reasons, some of them being:

  • Hungary has the lowest corporate tax in all of Europe, since the corporate tax rate is only 9 %. This is often quoted as the main reason for Hungary being one of the leading choices for attracting foreign investment in Europe, together with the extensive network of double tax treaties.
  • Hungary can also offer an excellent banking infrastructure with several top tier banks that are comfortable for international businesses.
  • That foreigners can own 100 % of the shares in a Hungary Limited Liability Company, or LLC. This is often not possible in other jurisdictions, where local ownership or partnership is required.
  • It is possible to have only one member (shareholder) and one manager in a company, and this person (or entity) can be one and the same. This is generally not possible in most other jurisdictions.
  • The member (shareholder) liabilities to the company only extends to their respective capital contributions. That means members are never personally liable for the company’s possible liabilities and/or debts.
  • The minimum share capital for a Hungarian LLC is currently 3 million Hungarian Forints, equal to around 10,000 Euro. The whole amount does not have to be paid in full at the time of registration, in contrast to certain other jurisdictions where full payment at the time of registration is mandatory. Instead, the requirement is that all payments be made within 2 years of registration.
  • The geographical location of Hungary is often an advantage for those doing business with other European or Central European countries, as it is located near several core European markets. Additionally, the economic growth shown by the country in recent years is also very attractive for those seeking foreign investment opportunities such as start ups, real estate etc.
  • Hungary is also known for having a highly trained, multilingual workforce, earning salaries far lower than in most other EU countries.

A few other things you should know if company incorporation in Hungary interests you

  • A LLC must have a unique company name that does not bear a close resemblance to any other Hungarian legal entity’s name. If you register a LLC, the company name always has to end with the abbreviation “Kft.” (short for Korlátolt Felelõsségû Társaság)
  • A Limited Liability Company, or LLC, is a suitable and popular option for both private and commercial ventures.
  • A Hungarian LLC is not required to have a Board of Directors. Instead, all management is performed by one or several managers. It is the responsibility of the managing directors to keep records of all financial matters and decisions.
  • There is a requirement to file an annual report about the company’s business activities with the government every year, but an auditor is not required by law.

Porat Group can assist our clients with all aspects of company incorporation in Hungary, as well as arrangement of supporting infrastructure, such as corporate bank accounts, virtual offices, introduction to accountants, lawyers and other service providers. Contact us in order to book a consultation on the matter and/or for a personalized recommendation on what jurisdiction is best suited for your specific needs.