The Most Popular Company Forms In Hungary

Setting up a company in Hungary offers numerous benefits, including low corporate tax, reduced labor expenses, and a central European location. However, navigating the legal complexities can be challenging. Our article introduces the most popular company forms in Hungary.

Benefits of setting up a company in Hungary 

Before we explore the most commonly chosen company forms in Hungary, let’s understand why more and more international businesses decide to form a company in the country.

Lowest corporate tax in Europe

Are you seeking to find a country with exceptional tax rates for your business operations? Well, Hungary boasts the lowest corporate tax in Europe. Companies incorporated in Hungary pay no more than 9% in corporate tax. To help compare, here are the corporate taxes in other European countries.

• Austria: 23.0%
• Belgium: 25.0%
• Bulgaria: 10.0%
• Croatia: 18.0%
• Cyprus: 12.5%
• Czech Republic: 19.0%
• Denmark: 22.0%
• Estonia: 20.0%
• Finland: 20.0%
• France: 25.8%
• Germany: 29.9%
• Greece: 22.0%
• Iceland: 20.0%
• Ireland: 12.5%
• Italy: 27.8%
• Latvia: 20.0%
• Lithuania: 15.0%
• Luxembourg: 24.9%
• Malta: 35.0%
• Netherlands: 25.8%
• Norway: 22.0%
• Poland: 19.0%
• Portugal: 31.5%
• Romania: 16.0%
• Slovak Republic: 21.0%
• Slovenia: 19.0%
• Spain: 25.0%
• Sweden: 20.6%
• Switzerland: 19.7%
• Turkey: 25.0%
• United Kingdom: 25.0%

Central European location

Hungary, situated in Central Europe, grants businesses easy access to the entire continent. Additionally, Hungary boasts a well-developed transportation infrastructure and two international airports.

Highly qualified yet affordable workforce

Setting up a company in Hungary can aid in reducing your labor costs while recruiting talented, highly educated, and motivated employees. Build your dream team while keeping labor costs reasonable!

Easy and fast company formation process

Did you have enough of never-ending bureaucratic processes? Are you ready to cut through red tape? The Hungarian company formation process, with the proper legal assistance, is a quick and easy procedure. You can kickstart your business operations in 1-2 days.

Residence permit

Hungary grants residence permits to foreign nationals, including non-EU citizens, for work, study, or residency. Benefits include visa-free travel in the Schengen area and eligibility for Hungarian state health insurance. Hungary offers self-sufficient guest residence permits to all foreign investors equally if they establish a company in Hungary that provides services or trades goods.

Most popular company forms in Hungary

Hungarian corporate law provides numerous company forms. To simplify, we will focus on the most popular company forms in Hungary and outline their major differences.

Limited partnership (betéti társaság, Bt.)

Limited partnership stands as one of Hungary’s most popular company forms. If your business anticipates low turnover, a limited partnership can be an excellent choice. Let’s explore its key features:

• Limited partnerships do not mandate founders to possess authorized capital for establishment.
• A Bt. consists of at least two members:
• a general partner with unlimited responsibility and
• a limited partner with restricted liability.
• The general partner assumes liability for the company’s obligations with all their assets.
• The Assembly of Members serves as the highest body of a limited partnership and convenes at least once annually.

Limited liability company (korlátolt felelősségű társaság, Kft.)

Small and medium-sized enterprises typically opt for the limited liability company, which offers numerous benefits. Let’s examine its benefits:

• To establish a limited liability company, you will require authorized capital of 3,000,000 Hungarian forints, approximately 7500 Euros. 
• Once incorporated, this capital can be used for business expenses.
• Members are liable for the company’s liabilities up to their contribution to the authorized capital, while the managing director bears unlimited responsibility.
• The Assembly of Members serves as the supreme body of the limited liability company and convenes at least once a year.

Private limited company by shares (zártkörűen működő részvénytársaság, Zrt.)

The private limited company by shares ranks among the most popular company forms in Hungary. Let’s explore its most important features:

• Zrt. operates as a share company but is not open to the public, meaning its stocks are not traded on the stock exchange.
• The private limited company by shares has an authorized capital of 5,000,000 Hungarian forints, approximately 128,000 Euros.
• Shareholders are generally not liable, with exceptions stipulated by law.
• At least 30% of the contribution must be in cash.
• The General Assembly serves as the supreme body of a Zrt. and is convened at least once a year.

Get professional assistance for your Hungarian company setup!

Do you require assistance in determining the appropriate company form for your business? Crystal Worldwide Group, an international law firm with over two decades of experience, is ready to assist you in establishing your company in Hungary from start to finish.

Get in touch!