In this guideline we will provide detailed
information about the legal forms of doing business in Hungary. If you have
questions about the discussed topic or about taxation in general, don't
hesitate to contact us! We are dedicated to help our clients with our high
quality, tailored services to find the best economic solutions in setting up
their business in Hungary.
Business activities in Hungary may be carried on both by private entrepreneurs and companies. Act no. V of 2013 on the Civil Code provides for the types of companies. The sole proprietorship is regulated in Act no. CXV of 2009 on Private Entrepreneurs and Sole Proprietorships.
Hungarian corporate forms with their ab-breviations are as follows:
- Limited Liability Company – korlátolt felelősségű társaság (Kft.)
- Public Limited by Shares – nyilvánosan működő részvénytársaság (Nyrt.)
- Private Company Limited by Shares - zártkörűen működő részvénytársaság (Zrt.)
- Limited Partnership – betéti társaság (Bt.)
- Unlimited Partnership – közkereseti társaság (Kkt.)
- Sole Proprietorship – egyéni cég (Ec.)
The table below indicates the most import-ant
characteristics of the abovementioned legal forms:
| FORM | LIABILITY OF SHAREHOLDER | MINIMUM CAPITAL (HUF) | MINIMUM OF FOUNDERS AND SHAREHOLDERS | REGISTRATION IN COMMERCIAL REGISTER |
| Kft. | limited | 3 million | one | required |
| Rt. | limited | 5 million for private, 20 million for public | one legal entity or at least two individuals | required |
| Bt. | na/a | n/a | at least two (general and limited) | required |
| Kkt. | unlimited | n/a | at least two | required |
| Ec. | unlimited or limited | n/a | one only | required |
Foreign investors may also engage business in
Hungary by establishing a branch office (≫fióktelep≪). A branch office is the
Hungarian-registered part of a foreign undertaking that operates in Hungary
with economic independence but without legal personality. A branch office may
carry on business activities, acquire property, exercise certain rights and
assume liabilities in its own name.
A commercial representative office (≫kereskedelmi képviselet≪) is registered in Hungary as part of a foreign undertaking, without legal personality. A commercial representative office may represent the foreign undertaking and carry on solely preparatory and auxiliary activities for the benefit of the foreign undertaking. The commercial representative office may conclude contracts necessary to its operation, but only in the name of the foreign under-taking. The mere existence of a commercial representative office does not render the parent company subject to Hungarian corporate taxation.
Both the branch office and the commercial representative office shall be registered by the court into the commercial/company register.
If you need a reliable partner in tax advisory, accounting, payroll or auditing, don't hesitate to contact us! We will also help you finding legal assistance for the incorporation of your company or to settle other corporate or labour law issues.
