Key benefits

Hungary is situated in the very centre of Europe bridging Eastern and Western Europe. Since the end of communism in 1989 Hungary has undergone a dramatic transformation from a centrally planned economy to an open, pro-business economy. In 1993 the Hungarian Ministry of Economic Affairs established the Hungarian Investment and Trade Development Agency which provides assistance to companies considering investing in the country, mainly to small and medium sized enterprises and investors.

Hungary joined the EU in 2004 although it hasn’t adopted the Euro and still retains the Hungarian Forint. The Hungarian Constitution guarantees private ownership, right of enterprise and freedom of competition. Regulation is reasonably transparent and deregulation of major former state owned industries is either completed or currently in process. Hungarian financial markets are highly developed and reflect a level of sophistication which is indicative of the fact that Hungary was early reformer in the region.

Hungary was hit hard by the 2008 recession due to its heavy dependence on foreign capital to finance its economy however in 2011 the Hungarian economy showed signs of recovery with a moderate 1.9% GDP growth rate.

Hungary has very strict bank secrecy laws and the Organisation for Economic Cooperation and Development considers the Hungarian Banking system as amongst the healthiest in the region as it is supported by a strong regulatory framework that meets international standards. There are more than 40 international banks operating in the region including BNP Paribas Bank, HSBC, Standard Chartered Bank, Deutsche Bank and ING Bank.

Key benefits of Hungary:

  • Hungary has a stable economic and political system
  • Hungary is strategically located in close proximity to major European core markets. Its unique position makes it possible to take advantage of the major European trade routes in addition to possessing a sophisticated infrastructure.
  • Hungary is a member of the EU, NATO and the OECD and the World Trade Organisation
  • A Hungarian KTF Company provides a legitimate tax-efficient solution with corporate taxes being amongst some of the lowest in Europe, between 10% – 19%.
  • There is no withholding tax and payment of dividends to any resident or non-resident person are tax free
  • Highly educated, multi-lingual local workforce

Tax and accounting regulations

Summary of Requirements for a KTF, Limited Liability Company

General Information
Type of CompanyKTF, Private Limited Liability Company
Timescale to incorporate2 weeks
Corporate Taxation10% Corporate Tax Rate on annual profits up to 500 million HUF. 19% on profits exceeding 500 million HUF
Double Tax Treaty Access:Yes
Minimum No. Required1, Corporate Directors are permitted
Local Director RequiredNo
Publicly accessible informationNo
Location of MeetingsAnywhere
Minimum No. Required1, 100% foreign shareholders allowed. Corporate Shareholders permitted
Publicly accessible informationNo
Location of MeetingsAnywhere
Company Secretary
Local Secretary RequiredN/A
Registered Office RequiredYes
Share Capital
Standard CurrencyHungarian Forint (HUF)
Standard Authorised€2,000.00
Minimum Paid Up CapitalApprox. €2,000.00.
Accounting & Compliance
Requirements to prepare AccountsYes
Requirement for AuditAudit not required if both of the following conditions are met; the company’s average net turnover for the last 2 preceding years did not exceed 100 million HUF and the workforce is less that 50.
Local Auditor RequiredYes, if Audit is required
Requirement to File AccountsYes
Requirement to file Annual ReturnYes
Additional Information
VAT27%. Every company must register with the VAT authorities. Returns can be made monthly, quarterly or annually depending on the amount of VAT liability.
Bank Account OpeningIn order to open a bank account a visit can sometimes be required. Prior to a visit to Hungary all the preliminary information and documentation will be submitted to the bank.


Procedure of company registration

In order to proceed with formation the following documents are required:

  • Certified passport copy for all directors and shareholders
  • Residential address proof
  • For a Corporate Shareholder the following original documents with Apostille are required (dependent upon jurisdiction of registration) certificate from the commercial register / certificate of incumbency / certificate of registration. Documents will be required to be translated in Hungarian.

The following documents will then be sent for signing. All documents signed are in English and Hungarian. The following documents must be signed and notarized and the originals returned. Once the following has been received then the company will be incorporated in approximately 1 week. It will take another month for the court to register the company however the company can be operational during this period.

  • Foundation Document / Articles of Association
  • Register of Shareholders
  • Declaration of Executive Officer
  • Specimen signatures for the Company Manager / Director
  • Document of Nominal Capital Paid
  • Declaration for Tax Office and Declaration for Register of Court
  • Power of Attorney (for carrying out the registration procedure)

When the company has been registered all original corporate documents will be sent by courier.