According to the prevailing laws, no special permit is required to establish a commercial enterprise in Hungary. Companies can be founded by natural or legal entities, Hungarians and foreign nationals alike. Even a single person can found a joint-stock company (JSC; either Nyrt.or Zrt. in Hungarian, depending on whether it is public or private, respectively) or a limited liability company (LLC, or Kft. in Hungarian); the only requirement is that the headquarters of such companies must be located within Hungary. The articles of association (the deed of foundation and the articles of incorporation) must be signed by all members of the corporation.
The articles of incorporation must specify the following:
location of headquarters
a list of the company's members, with their respective addresses
the company's business activities (certain activities require special administrative permits)
the amount of the equity capital, the method and date of its availability
the method of the company's registration
names and addresses of the company's officers
the duration of the company, if founded for a fixed period of time
all other items of information relevant to the given form of corporation as required by the prevailing act of law.
The registration of business associations is a must in Hungary. The Articles of Association or the Deed of Foundation, respectively, must be drafted and countersigned by a Hungarian registered attorney. The Company Act determines the minimum basic information that such founding documents should contain, such as the name of the company, domicile, capital founders/owners, basic data on the executive officers etc.. Limited or unlimited partnerships and limited liability companies can be established using the model aritcles of association annexed to the new Company Procedure Act to simply complete the required company details on the form. This enables the registration process to be finalised within two working days. Since the company registration is public, the basic corporate documents are available to any person, thus it is customary that the owners sign a separate syndicate agreement in case they intend to stipulate provisions they would not like to unveil (e.g.: transfer of know-how).
The registration application must be filed with the competent Hungarian Court of Registration within 30 days from the conclusion of the Articles of Association. If the applicable laws require for the establishment of the company any official license, it must be attached to the application form. The incorporation documents can also be submitted electronically to speed up the company registration process. Once the registration is submitted, the company may start its operations as a pre-company until the registration is made or refused. A pre-company may pursue business activities, but may not conduct business activities requiring an official license.
The Court of Registration must decide on the registration within 15 days in the case of business entities submitting for registration using the model articles of association annexed to the new Company Procedure Act (and within 2 days in case of electronic registration), or otherwise within 30 days. These periods commence at the delivery of the application to the Court of Registration. If the Court fails to meet these deadlines, the company is considered to be automatically registered on the 9th day following the expiry of the deadline.
A newly registered company must also register with the local municipality, State Taxation Office, Central Statistical Office and Social Security Authorities. Branch offices and commercial representation offices should also be registered by the Court of Registration and may start their activities only after the registration.
The registration fees are as follows:
- HUF 600 000 in case of a public company limited by shares or a European company
- HUF 100 000 in case of a private company limited by shares or a limited liablity company
- HUF 100 000 in case of any other company bearing a legal personality and not listed in above
- HUF 50 000 in case of a company not bearing a legal personality
- HUF 250 000 in case of a branch office of a foreign company
- HUF 150 000 in case of a representative office of a foreign company
Practical Advice Following an Application for Incorporation
If the company intends to build a relationship with a taxpayer(s) in an EU Member State, the company must apply for an EU tax number upon registration with the tax authority if it did not apply for one when submitting the application for incorporation (the EU tax number must be indicated on all documents related to EU trading, such as correspondence, orders, etc.).
The foreign national working in Hungary has to be registered at the national tax authority on the registry form no. 06104 within 30 days from the date the foreign national's stay in Hungary exceeds 183 days in the given year.
Preparation of the regulations required by the Accountancy Act (Accountancy Policy, etc.) and any other articles of association.
Preparation of a preliminary corporate report and tax returns by the deadlines specified by law.
Source: ITDH Hungary
Last updated 3rd July 2006