How to Start a Business in Hungary from the UK

Thinking of setting up a business in Hungary? It’s an attractive destination for UK entrepreneurs, due to its stable economy, ease of starting a company and access to the huge EU market. The country also has one of the lowest corporate tax rates in Europe.¹

In this guide, we’ll walk you through the process of company formation in Hungary. We’ll cover what documents you’ll need, what the process is and the legal structures you can choose for your new business. You’ll be up and running in Budapest, Szeged or Debrecen in no time.

We’ll also show you a smart way to manage your company’s finances in Hungary and worldwide, using Wise Business - the ideal solution for international businesses.

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Doing business in Hungary

There are many reasons you might want to start a business in Hungary as a foreign entrepreneur, startup or even an established company. This includes access to EU markets, a stable economy and ease of starting a company and doing business. Hungary also has one of the lowest corporate tax rates in Europe.¹

Scoping out business opportunities in Hungary? A good place to start your research would be the country’s largest and fastest growing industries, which include the following:²

• Automotive
• Electronics
• Pharmaceutical and medical technology
• Information and communications technology
• Food

The business culture in Hungary is hierarchical and a little hampered by bureaucracy and slow decision making.

The good news for UK entrepreneurs though is that the working hours tend to be similar, and many people speak English. It could be worth learning a little Hungarian to get by, although it is a notoriously difficult language to pick up.

Hungary company formation

To open a business in Hungary, you must file your incorporation documents at the Hungarian Court of Registry and get an EU tax identification number.

But before you can do that, you’ll need to decide on a legal structure for your new company.

The different entity types you can choose from in Hungary include the following:

• Limited liability company
• Company limited by shares
• Sole proprietorship
• Limited partnership
• Unlimited partnership
• Professional association
• Cooperative
• Foreigners' commercial representative office in Hungary

We’ll run through each in a little more detail below.

Limited liability company³

A limited liability company is founded by a minimum required capital of 3 million HUF. Liability of members is limited to the extent of their contributions. The company requires at least one managing director.

Company limited by shares³

This business type is founded with a minimum share capital of 20 million HUF. Its members are not liable for the debts and obligations of the company. A company limited by shares can be either private or public.

Sole proprietorship³

A sole proprietorship is designed for businesses set up and run by just one person. The company has no legal personality of its own, and the founder has unlimited liability for its obligations.

Limited partnership³

A limited partnership requires at least two founding members. At least one founder will have unlimited liability for the company’s obligations, while at least one other partner has liability only up to the extent of their capital contributions. There’s no minimum capital requirement for this business type.

Unlimited partnership³

Also known as a general partnership, this business type must be founded by at least two people. These founders have unlimited liability for the company’s debts. There’s no minimum share capital requirement for an unlimited partnership.

Professional association³

This entity type is a non-profit organisation which has an independent legal personality. This structure is for professionals wanting to coordinate business activities under a shared name. The members of a professional association will have unlimited, joint and several liability for the debts of the organisation.

Cooperative³

A cooperative in Hungary is an organisation with the aim of fulfilling the economic and social needs of its members. It must be founded by at least 7 members and have an investment fund share capital determined in its charter. The members of the cooperative are responsible for its obligations in relation to their equity contributions.

Foreigners' commercial representative office in Hungary³

This is a commercial representative office set up in Hungary by a foreign parent company based in another country. It doesn’t conduct business activities however - the aim of this entity type is to promote the parent company, test the market and generally prepare to enter the Hungarian market.

Starting business in Hungary - Step-by-step

To open a business in Hungary, you need to follow these steps:⁴

1. Choose a legal structure for your business
2. Get a registered office address in Hungary for your new company
3. Prepare your incorporation documents, and make sure they’re signed in the presence of a Hungarian lawyer (this can be done over video call).
4. Register for Client Gate and Company Portal platforms
5. Get a Hungarian Personal Tax Number (if needed)
6. File the registration documents at the Court of Registration of Hungary
7. Get an EU tax ID
8. Open a business bank account in Hungary and deposit the required amount of capital (if required for your business type).
9. Register with the Chamber of Commerce and the relevant Government Municipality.

It could also be worth consulting with tax and/or accountancy specialists to ensure your new business will comply with Hungarian rules and regulations.

The documents you’ll need for company formation include the Articles of Association, proof of address for your registered office in Hungary and both details and ID documents for the directors and shareholders of the new company.

Company registration in Hungary - FAQs

New to Hungary or starting your very first business? It’s only natural that you’ll have questions.

We’ll tackle some of the most commonly asked questions below, covering everything from fees and costs to business tax.

Is Hungary a business friendly country?

Yes, Hungary is known as a business-friendly country. It has many qualities that make it an attractive choice for foreign entrepreneurs and startups.

This includes access to EU markets, low corporate tax rates, a stable economy and a fast, easy process for setting up new businesses.

Is it easy to open a company in Hungary?

It is relatively easy to start a business in Hungary, especially compared to some other places in Europe. The incorporation process is similar to many other countries, but much quicker - you could have your new business registered in as little as a day.⁵

How much does it cost to set up a company in Hungary?

The registration fee is between 50,000 HUF and 600,000 HUF, depending on company type.⁶ You may also have other fees to pay for:

• Legal representation
• Document translation services
• Costs relating to setting up a registered office in Hungary
• Notary services

Check below the current conversion rate between GBP and HUF.

Wise Business account is a handy tool for UK business expanding abroad. Once you set up your business in Hungary you can easily convert British Pounds to Hungarian Forint to hold money on the currency, receive HUF with your account details or set payments like a local. All conversion is done based on the mid-market exchange rate with low and transparent fees.

Get started with Wise Business 🚀

Can a foreigner set up a company in Hungary?

Yes, starting a business in Hungary as a foreigner is not only possible, but reasonably straightforward.

You may not even need to be present in the country to register a business, especially if you use a third-party or consultancy service to set the company up for you.

If you will be living in Hungary to run your business though, you’ll need to make sure you have the appropriate visa and/or work permit.

What is the corporate tax rate in Hungary?

The corporate tax rate in Hungary is set at a flat rate of 9% for all business types, which is one of the lowest rates in Europe.¹

Manage your international company's finances with Wise Business

A Hungarian bank account will certainly be useful for your new business. But it’s also worth considering alternatives which could save you time and money when managing your finances internationally.

Open a Wise Business account and you can manage your company’s finances in 40+ currencies all in one place, including HUF, EUR, GBP and USD. You’ll be able to pay suppliers and staff in their own currency, as well as receiving payments in multiple currencies.

You can even automate payments using the powerful Wise API to save even more time. See how it works here in our case study.

Wise payments are fast and fully secure (even for large amounts). Best of all, you’ll only pay low, transparent fees and always get the mid-market exchange rate.

This is the rate that banks use to buy and sell currency, and is widely considered the fairest rate you can get. When banks carry out currency conversions on behalf of customers, they usually add a mark-up or margin to the exchange rate. This makes it more expensive for your business, as less of your money reaches your recipient.

It’s quick and easy to open a Wise Business account, with a fully digital application, verification and on-boarding process Check out the requirements here.

Get started with Wise Business 🚀

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And that’s it - your essential guide to company formation in Hungary. We’ve covered the process from start to finish, including info on legal structures, fees and documents. You should be all set to launch your new venture in Hungary. Good luck!

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Sources used for this article:

1. OnDemand International - Benefits of setting up a company in Hungary
2. Company Incorporation Hungary - Top 5 industries in Hungary
3. Company Register - Company forms in Hungary
4. Company Formation Hungary - How to establish a company in Hungary?
5. Company Formation Hungary - Company Formation in Hungary
6. EUGO Hungary - Starting Up in Hungary

Sources checked on 08-05-2024.