How to Start a Business in Hungary

How to start a business in Hungary? This is the question we at Business Management Hungary get first most of the time. Let’s see the short summary about this question.

How to start a business in Hungary, or actually anywhere in the World might raise questions. Especially for those who would like to start their first company ever.

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How to Start a Business in Hungary: Contact Us

Now we are going to summarize the most general points and solution for starting a business in Hungary, focusing for a simple company foundation in case of a Limited company. Of course, there are several more business types. And there are so many details what might have effect on your plans and schedule. But, in one hand it’s almost impossible to collect everything into one article. In the other hand, in 99% of the cases the following collection is going to be a good lead.
Founding a company
A company to be able to get incorporated at least an owner and a managing director (CEO) is needed. If the owner is a private person the following data is need to be provided:
– Company name.
– Registered seat address.
– CEO’s and owner’s (personal) data, what are: name, given name, date of birth, place of birth, Mother’s name, tax number, home address.
– Passport copy of the owner (and the CEO).
– For foreigners a Hungarian handling representative is a must, to be sure that when the state, for example the Tax Authority (IRS, NAV) sends a letter to the owner, the letter is going to be delivered.
If there are more owners, we will need everbody’s personal data and the percent value: who will own how many percent in the company.
If the registered seat is by a registered seat service or in a rent office, the following documents are needed:
– Declaration of the property owner that you can use their office as a seat.
– If the seat provider also rents the office: a copy of their contract with the office building owner that includes that they are allowed to provide this service to you.
If the company owner is going to be a foreigner company the needed papers are as follows:
– Company documents. (The Court of Registry’s certification will have to be officially translated to Hungarian.)
– Specimen of signature from the CEO.
– The official representative’s (CEO) personal data (as written above) and the passport copy.

Launching a company is a quite short process (few days) and must be done by an attorney. Right after the documents had been sent to the Registry Court, you can start working with your company, for example sign contracts or open a bank account. Also, with the incorporation you will automatically get a tax number and an EU VAT number as well.
The minimum capital of an Ltd. is 3 000 000 HUF (cca. 10 000 EUR). You do not have to deposit it in the bank account right after the company incorporation. Also, you can use all of the capital for the company’s purposes.

How to Start a Bussines in Hungary

How to Start a Bussines in Hungary

The CEO has to be reported as a full time employee at least with the minimal salary as if he can provide a form called A1 proving that he has social insurance in the EU. The minimum salary from 2017 is gr. 127 500 HUF, from 2018 it will be 138 000 HUF. In both cases you have to add +23,5 % on the top of this – this is the vocational training contribution (1,5%) and the social contribution tax (22%) together. This final amount is going to be the total employer’s cost after him.

Opening a bank account also will raise expenses – this strongly depends on the conditions the banks can offer.

The company foundation itself starts from 250 EUR ( +27 % VAT) as a lawyer’s cost. The fee for the state is 55 000 HUF.

The monthly booking starts from net. 40 000 HUF, the payroll calculation starts from monthly net 10-15 EUR per person.

Office rent: might go up to net 20 EUR per m2 monthly but it’s possible to find for 50 % less as well.

Registered seat service: shouldn’t be more than a monthly 100 EUR (+VAT).
When someone asks how to start a business in Hungary it means for us that he already learned the advantages of starting his business in Hungary and he made the decision. So we don’t have to answer the WHY?, we just have to talk about the “HOW?”. Still, taxation is as important that we have to shortly review it.

Corporate Tax (profit tax)
The previously 10% or 19% of Corporate Tax was originally low already, but from 2017 it had been decreased to 9%. So Hungary became a Tax Heaven.
Local Business Tax
The maximum rate of the local Business Tax is 2%, but there are towns where it is zero percent to attract entrepreneurs for investing there.

Value Added Tax (VAT)
Generally the VAT is 27%. It’s very high. But, to a company who holds EU VAT number the Hungarian company is able to issue invoice without VAT. Also, there are products and services which VAT content is less: 5% or 18%.

Employment taxes
The taxes and contributions are also not low, but not higher then anywhere else in the EU. And the salary you have to pay for the well trained manpower is still quite „cost effective” comparing to other countries. Roughly you have to calculate like this: the amount an employee gets (netto) is the half of what you have to pay (brutto) all together.
You can avoid EU import duties (on goods and services).
The dividend tax is 29 %: 15 % of social income tax and 14 % of health contribution tax.
There are several services what you might need during your business.
The “how to start a business in Hungary?” question, most of the time is notforegone by a business plan or a market research. We believe that or these or a feasibility study is more than necessary. Business Management Hungary is perfectly able to provide these services.

Employment process has its own particularity in the last years. Just to mention the differences between the capital, Budapest and the County Seats (the biggest cities in Hungary) and the other regions. In Budapest the majority searches job in the internet. In the other regions local newspapers and radio advertisements are still more famous.

Marketing, PR. You cannot let out of consideration this one. And all starts with a webpage. A professional marketing plan by a marketing expert costs around 300 000 HUF + VAT. Not included execution, included explanations and consultation.

Real estate. A very special market or business even if we are talking about rent, investment or building. The taxation is also unique. If you want to know more details about it, contact us!

Procurement. You have to count at least with time while you will find the perfect, not essentially local subcontractors and suppliers. Prepare for this if you don’t want to lose too much time.

Cars, communication, special permits and their fees: all are facts what depend on your future plan, on your business idea, on your requests. We can help you get to know all the details if you want Business Management Hungary to provide business services for you!
So again: how to start a business in Hungary? The most important is that there are several conditions what you have to learn and consider before you start it.

But for the Business’ sake! Who has ever told you that doing business is easy?


How may Business Management Hungary be at your service?

Would you like to start your business in Hungary? Would you need fully comprehensive information for launching your company? We suggest you the below service of ours:


Would you relocate to Hungary? Because of a work or business? Maybe with your family? Would you buy Investor Residency Bonds? We suggest you the below service of ours:


Do you want us to make a business plan for your company foundation? Would you need market research? Would you like to get tax consultation for you future- or existing venture? We suggest you the below service of ours:


Are you looking for a solution for a business problem related to your Hungarian firm not listed above? Give us a chance to help You!


If you would like to work with Business Management Hungary, please contact us!
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