Foreign founders hear “9% tax” and “EU access,” then hit a maze of entity types, capital rules, and Hungarian-language filings. Here is the verdict up front. The private limited company, or Kft. (korlátolt felelősségű társaság), is the default entity for most foreign investors. Registration runs through the court of registration (Cégbíróság), and the whole process can be completed remotely by power of attorney (PoA) granted to a Hungarian attorney.
Hungary’s 9% flat corporate income tax (CIT) is the lowest headline rate in the European Union (EU), confirmed by NAV, Hungary’s National Tax and Customs Administration. This guide covers entities, capital, documents, the step-by-step process, timelines, and the full tax picture.
What Are the Types of Business Entities in Hungary?
Hungary offers eight main forms under the Civil Code, Act V of 2013. The Kft. (private limited liability company) is the standard choice for foreign small and medium-sized enterprises (SMEs). Companies limited by shares split into the private Zrt. and the public Nyrt. Partnerships, sole proprietorships, branches, and representative offices round out the list. The table below compares each form.
EUR figures use the Magyar Nemzeti Bank (Hungarian central bank, MNB) official rate of 1 EUR = 356.24 HUF on 13 July 2026, per the MNB exchange-rate page.
| Entity | Hungarian name | Minimum capital | Liability | Best for | Source |
|---|---|---|---|---|---|
| Private limited company (Kft.) | Korlátolt felelősségű társaság | HUF 3,000,000 (≈ EUR 8,421) | Limited | Default for foreign SMEs | Civil Code Act V of 2013, §3:161 |
| Private company limited by shares (Zrt.) | Zártkörűen működő részvénytársaság | HUF 5,000,000 (≈ EUR 14,035) | Limited | Larger private and PE-backed ventures, holdings | Civil Code Act V of 2013, §3:212 |
| Public company limited by shares (Nyrt.) | Nyilvánosan működő részvénytársaság | HUF 20,000,000 (≈ EUR 56,142) | Limited | Companies listing on a stock exchange | Civil Code Act V of 2013, §3:212 |
| Sole proprietorship | Egyéni vállalkozó | None | Unlimited | Solo entrepreneurs | Civil Code Act V of 2013 |
| General partnership (Kkt.) | Közkereseti társaság | None statutory | Unlimited (all partners) | Small close-collaboration firms | Civil Code Act V of 2013 |
| Limited partnership (Bt.) | Betéti társaság | None statutory | Mixed (1 general + limited partners) | Family firms, small businesses | Civil Code Act V of 2013 |
| Branch | Fióktelep | N/A | Parent company liable | Foreign company extending operations | Civil Code Act V of 2013 |
| Representative office | Kereskedelmi képviselet | N/A | Non-trading only | Market presence, no commercial activity | Civil Code Act V of 2013 |
Capital minimums are set by the Civil Code (Act V of 2013). For a deeper walkthrough, see Commenda’s Hungary business setup guide.
What Is the Best Entity Type for Foreign Investors in Hungary?
The Kft. is the best entity for almost all foreign SMEs. It gives limited liability, carries the lowest capital of Hungary’s limited companies at HUF 3,000,000 (Civil Code Act V of 2013, §3:161), and uses the simplest registration route. The Zrt. suits larger private ventures, private-equity-backed companies, and holding structures. Detailed Kft. registration instructions are the practical starting point.
What Is the Difference Between a Zrt. and an Nyrt.?
A Zrt. (zártkörűen működő részvénytársaság) is a privately operating company limited by shares, with HUF 5,000,000 minimum capital and shares not admitted to a stock exchange. An Nyrt. (nyilvánosan működő részvénytársaság) is the publicly listed form, with HUF 20,000,000 minimum capital, required for a stock-exchange listing. The Civil Code (Act V of 2013), §3:211–3:212 draws the line on listing, not size.
Should a Foreign Company Open a Branch or a Subsidiary in Hungary?
A subsidiary is the safer choice for most foreign companies. A subsidiary, usually a Kft., is a separate legal entity that shields the parent from the subsidiary’s debts (Civil Code Act V of 2013). A branch (fióktelep) is not a separate entity, so the parent is directly liable for its obligations. Commenda’s Hungary subsidiary setup service handles the subsidiary route end to end.
What Are the Legal Requirements to Incorporate in Hungary?
Incorporation requires a unique company name, a Hungarian registered office address, at least one director, the statutory minimum capital, and a memorandum of association countersigned by a Hungarian attorney or executed as a notarial deed. There is no residency requirement for directors or shareholders (Civil Code Act V of 2013). Name uniqueness is checked against the company register.
Name checks run against the Cégnyilvántartás (company register) through the Céginformációs Szolgálat / e-cegjegyzek system under the Ministry of Justice, not the Chamber of Commerce. Chamber of Commerce registration is a separate mandatory step after incorporation. The registered office receives legal and tax correspondence and can be a rented office or a registered-office (székhelyszolgáltatás) provider. You can pre-clear a name with the Commenda company name checker.
What Documents Are Required for Hungary Incorporation?
The core set is the memorandum of association, specimen signatures (aláírásminta), registered office proof, director acceptance declarations, and shareholder passports or IDs. Corporate shareholders add an apostilled, translated extract from their home-country register. Remote formation adds a power of attorney to the Hungarian attorney and a delivery agent (kézbesítési megbízott) where all officers are non-resident.
Hungarian law requires the incorporation documents to be countersigned by a Hungarian attorney (ügyvéd) or executed as a notarial deed; the attorney or notary then files electronically with the court of registration (Civil Code Act V of 2013). Foreign documents generally need certified translation and an apostille before filing.
How Do You Incorporate in Hungary Step by Step?
Choose the entity, check the name, engage a Hungarian attorney to draft and countersign the documents, file electronically with the court of registration (Cégbíróság), then receive the company registration and tax numbers. Post-registration steps follow. The corporate bank account is opened after registration in standard practice, and the memorandum can defer cash payment so no pre-registration deposit is needed (Civil Code §3:162).
- Choose the entity type, usually a Kft.
- Check the name against the company register via the Céginformációs Szolgálat.
- Engage a Hungarian attorney to draft and countersign the memorandum of association.
- File the documents electronically with the court of registration.
- Receive the company registration number and tax number, assigned during registration by NAV.
- Open a corporate bank account and deposit or defer share capital per the memorandum.
- Register with the Chamber of Commerce, complete VAT and EU VAT registration, and obtain sector licenses where required.
Handle VAT separately through Commenda’s Hungary VAT registration for foreign companies.
How Long Does It Take to Register a Company in Hungary?
The simplified electronic route registers a template Kft. in about one business day once documents are complete, and the standard procedure takes up to 15 working days. The tax number is assigned during registration. Bank account opening is usually the slowest step for foreign founders. The verifiable statutory milestones are below.
| Milestone | Timeframe | Source |
|---|---|---|
| Company name check | Same day, online | Céginformációs Szolgálat (e-cegjegyzek) |
| Simplified electronic registration (template Kft.) | ~1 business day | Act V of 2006 on company registration |
| Standard registration | Up to 15 working days | Act V of 2006 on company registration |
| Tax number issuance | During registration | NAV |
Can Non-Residents Incorporate in Hungary Remotely?
Yes. There is no residency requirement for directors or shareholders, and formation can be completed remotely through a power of attorney granted to a Hungarian attorney (Civil Code Act V of 2013). Documents signed abroad need notarization and an apostille. A delivery agent in Hungary is required when all officers are non-resident.
Bank Know Your Customer (KYC) checks are the hardest remote step. Many Hungarian banks require an in-person visit by a director or enhanced due diligence for non-resident-owned entities, and non-EU founders face heavier document checks. The registered-office and delivery-agent requirements must be in place before officers abroad can be served company documents.
What Is Hungary’s Corporate Tax Rate?
Hungary’s corporate income tax is a 9% flat rate on the positive tax base, the lowest headline rate in the EU, in effect since tax year 2017 per NAV. The headline rate does not tell the whole story. Local business tax, an innovation contribution, and the global minimum tax raise the effective burden, and Pillar Two means the 9% rate mainly benefits SMEs and mid-market groups, not the largest multinationals.
| Tax | Rate | Who pays | Source |
|---|---|---|---|
| Corporate income tax (CIT) | 9% flat | Resident companies and Hungarian permanent establishments | NAV |
| Local business tax (HIPA, helyi iparűzési adó) | Up to 2% of adjusted net revenue | Companies, by municipality (Budapest at full 2%) | Act C of 1990 on Local Taxes |
| Innovation contribution | ~0.3% | Non-SME companies | Act LXXVI of 2014 |
| Qualified domestic minimum top-up tax (QDMTT) | 15% effective minimum | Groups with consolidated revenue ≥ EUR 750m | EU Directive 2022/2523; Act LXXXIV of 2023 |
| Personal income tax (PIT) on dividends | 15% | Individual shareholders | Act CXVII of 1995 |
Hungary implemented the global minimum tax through Act LXXXIV of 2023, in force from 31 December 2023 and effective for the 2024 fiscal year. See Commenda’s Hungary corporate tax rates guide for the deeper dive.
Does Hungary Have Double Taxation Treaties?
Hungary has roughly 80+ double tax treaties in force, per NAV, covering most major economies and reducing withholding across borders. One major exception matters for Americans. The US Treasury terminated the US–Hungary tax treaty, effective for taxes from 1 January 2024, so US investors can no longer rely on it. Confirm the current status before planning any US-Hungary structure.
Is Hungary a Good Base for a Holding Company Structure?
Yes, Hungary works well for many holding structures. It levies no withholding tax on dividends, interest, or royalties paid to corporate (non-individual) recipients under Act LXXXI of 1996, combined with the 9% CIT and its treaty network. The usual holding vehicles are the Kft. and the Zrt. The exception is payments to individuals, where withholding and the 15% PIT can apply.
How Commenda Helps You Incorporate in Hungary
Commenda’s incorporation service handles Hungary formation end to end, from entity selection and document preparation to registration and post-registration filings. You get the Kft. drafted, countersigned, filed electronically, and set up with its tax number, without piecing together local law firms yourself.
After the entity is live, Commenda’s entity management platform tracks directors, filings, VAT returns, and compliance deadlines across every entity from one dashboard, so country 12 behaves like country 1. Expanding elsewhere in the region? Start with the Hungary business setup guide and the subsidiary setup service.
Book a demo to get a formation plan and timeline for your Hungarian entity: https://www.commenda.io/book-a-demo.
