Hungary

Starting a Business in

Hungary

Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Hungary. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.

This information was collected as part of the Doing Business project, which measures and compares regulations relevant to the life cycle of a small- to medium-sized domestic business in 189 economies. The most recent round of data collection was completed in June 2013.

Compare Hungary to 188 other economies.

  • Standardized Company

  • Legal Form: Korlatolt Felelossegu Tarsasag (KFT) - Limited Liability Company
  • Paid in Minimum Capital Requirement: HUF 250,000
  • City: Budapest
No. Procedure Time to Complete Associated Costs
1 Hire a lawyer who will represent the company; create the company deed and prepare any other necessary legal document.

The company must be represented by a lawyer during the registration process. The lawyer's commission fee is subject to free agreement and it depends on the complexity of the case.
1 day HUF 100,000-260,000 ; varies according to the complexity
2 Pay at least 50% of subscription amount (at least HUF 250,000) into the bank account designated at the time of subscription.

Half of the contribution in cash must be transferred to the bank account of the company by the time of filing the submission to the Registry Court. The remainder must be paid in according to the provisions of the articles of association but not later than a year from the establishment.
1 day no charge
3 Apply for registration at the Registration Court (simplified electronic registration)

With the effect of 1st March 2012 a tax registration process has been introduced. The Tax Authority examines if the request for company’s registration was submitted to the Court of Registration and whether or not one of the statutory obstacles of the issue of a tax number exists. The Tax Authority refuse to issue a tax number if a hindrance (e.g. tax debt exceeding HUF 15 million) exists regarding a managing director; an owner entitled to represent the company; an owner/shareholder of a limited liability company; a closed company limited by shares whose voting rights exceed 50 per cent or who disposes over a qualified majority influence. The Tax Authority also examines these circumstances and hindrances in case there is any change in the above enlisted persons.

The Registry Court receives the application for registration, and after a certificate is issued with the company’s name, address, temporary tax and statistical number and the number of reference of the registration. If the National Customs and Tax Authority consider that the founder or the managing director falls under suspicion according to the above detailed statutory obstacles, Tax Authority does not duly send the tax number of the company to the Registry Court within one working day and the registration process will be suspended for the period of the pending investigation.

After receiving the certificate, the company may commence to operate in the form of a pre-incorporated company. This means that the company may operate as an incorporated company but special provisions regarding personal liability of the founder(s) are applicable.

Companies can be incorporated in 2 ways:

1. By simplified electronic filing
The registration fee: HUF 50,000 and HUF 5,000 for publication fee.
Incorporation: 2 business days (up to 8 business days)
In the simplified electronic filing, the companies must use a standardized template for the articles of association. The companies have to fill in the application form and file certain corporate documents specified by the provisions of law. Certain other corporate documents are not required to be filed to the court but must be reviewed and kept by the attorney proceeding with the incorporation procedure. The simplified electronic registration shall take 1 working hour after the receipt of the tax number from the Tax Authority. If the court does not decide within the 1 hour, the chairman of the registration court must make a decision within 1 business day regarding the refusal of the application for registration or the incorporation of the company. If within this period the court does not provide a decision, the registration will occur ex lege on the following business day.

2. By standard electronic filing:
The registration fee: HUF 100,000
Publication fee: HUF 5,000
Incorporation: 15 business days

If the court does not decide within the aforementioned periods, the chairman of the registration court must take measures to reach a decision within 3 business days regarding the incorporation or the refusal of such application. If within this period the registration court does not decide in the given time frame, the registration will occur ex lege. The company may choose to meet publication requirements by publishing the required information on its website instead of the Company Gazette (Cégközlöny). In the latter case, no publication fees are payable.

Simultaneously with the submission of the registration application, the court registers companies with the State Tax Authority (for VAT and income tax purposes) and with the Statistical Office through an online system.

2 days HUF 50,000 for registration
4 Register for social security

The company needs to register with the Hungarian Social Security office.
1 day no charge

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