Hungary allows 100 percent foreign ownership of Hungarian companies without restriction. The registration process is fully accessible to non-residents, and the legal framework provides strong protection for investors operating under EU law.
This guide covers the practical steps involved in registering a business in Hungary as a foreign investor.
1.Choosing The Right Legal Structure
The most common legal structure for foreign investors in Hungary is the Korlátolt Felelősségű Társaság, abbreviated as Kft, which is equivalent to a limited liability company. It limits owner liability to the value of the capital contributed, allows flexible ownership and management structures, and is straightforward to register and operate.
For larger operations, a Részvénytársaság, or Rt, the equivalent of a joint stock company, may be more appropriate. This structure is used when multiple investors are involved or when the business plans to raise external capital. The requirements and costs are higher, so it is less commonly chosen for initial market entry.
A branch office is an option for companies that want a Hungarian presence tied directly to a foreign parent company rather than a separate legal entity. This approach has specific implications for liability and taxation that need to be considered carefully before committing.
2.The Documents You Will Need
To register a Hungarian Kft, the founding documents include a deed of foundation signed by all shareholders, identification documents for all directors and beneficial owners, proof of registered address in Hungary, and evidence of the minimum share capital deposit.
All foreign documents need to be translated into Hungarian by a certified translator and in many cases apostilled or legalized depending on the country of origin. This step is where many international founders lose time if they do not prepare in advance.
The share capital requirement for a Kft is HUF 3,000,000, which is approximately EUR 7,500 to EUR 8,000 depending on the exchange rate. This must be deposited into a Hungarian bank account before registration is completed.
3.The Registration Process
Registration is handled through the Hungarian Court of Registration. When a legal representative such as a Hungarian lawyer or authorized advisor submits the documents on your behalf, the court has 15 working days to process the application. In practice, straightforward applications are often processed faster.
Once the company is registered, you will receive a company registration number and a tax number. VAT registration follows separately and is required if your turnover will exceed the annual threshold or if you choose to register voluntarily.
Social security enrollment for any employees, including foreign directors who will be paid from the Hungarian entity, is handled through the National Tax and Customs Administration.
4.Opening A Corporate Bank Account
Opening a bank account is one of the steps that international founders most frequently underestimate. Hungarian banks require in-person meetings with account signatories in most cases, extensive documentation on the source of funds and beneficial ownership, and a clear explanation of the business model and expected transaction flows.
For companies with foreign shareholders, the process typically takes between two and six weeks depending on the bank and the completeness of the documentation submitted. Working with an advisor who has established relationships with Hungarian banking institutions significantly speeds up this process.
5.What Happens After Registration
Once registered and banked, your business is operational for Hungarian and EU purposes. You can issue invoices, employ staff, enter contracts, and begin trading. Ongoing obligations include monthly or quarterly tax filings, annual financial statements prepared by a certified Hungarian accountant, and compliance with Hungarian labor law if you employ people locally.
Adam International manages the full registration process for international clients and provides ongoing compliance support once the business is operational.