Hungary
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.
Advantages 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
Summary of Requirements for a KTF, Limited Liability Company
| General Information |
| Type of Company |
KTF, Private Limited Liability Company |
| Timescale to incorporate |
2 weeks |
| Corporate Taxation |
10% Corporate Tax Rate on annual profits up to 500 million HUF. 19% on profits exceeding 500 million HUF |
| Double Tax Treaty Access: |
Yes |
| Directors |
| Minimum No. Required |
1, Corporate Directors are permitted |
| Local Director Required |
No |
| Publicly accessible information |
No |
| Location of Meetings |
Anywhere |
| Shareholders |
| Minimum No. Required |
1, 100% foreign shareholders allowed. Corporate Shareholders permitted |
| Publicly accessible information |
No |
| Location of Meetings |
Anywhere |
| Company Secretary |
| Required |
No |
| Local Secretary Required |
N/A |
| Registered Office Required |
Yes |
| Share Capital |
| Standard Currency |
Hungarian Forint (HUF) |
| Standard Authorised |
€2,000.00 |
| Minimum Paid Up Capital |
Approx. €2,000.00. |
| Accounting & Compliance |
| Requirements to prepare Accounts |
Yes |
| Requirement for Audit |
Audit 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 Required |
Yes, if Audit is required |
| Requirement to File Accounts |
Yes |
| Requirement to file Annual Return |
Yes |
| Additional Information |
| VAT |
27%. 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 Opening |
In 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 to Incorporate a KTF Company
In order to proceed with incorporation 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 incorporation. 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 incorporated all original corporate documents will be sent by courier.
Fee Schedule:
Incorporation:
- All Government License Fees
- Certificate of Incorporation
- Articles of Association / Statutes Share Certificates
- Corporate document set with Apostille
- Application for Certificate of Paid Up Capital
- Application for Registration,
- Tax and Statistical Number Courier fees
- Company Stamp
- Registered Office
|
€5,600.00 |
Bank Account Opening Fees:
Hungarian Bank Account Opening Fee
Cyprus Bank Account Opening Fee |
From €700.00
From €250.00 |
Annual Renewal Fee:
- Registered Office
- Payment of Government Fees
- Maintenance of Register of Directors
- Maintenance of Register of Shareholders
|
€1,500.00 |
Nominee Fees:
Local Hungarian Nominee Director Fee
Cypriot Nominee Director Fee
Nominee Corporate Belize Director |
€2,400.00
€250.00
€200.00 |
| Accountancy Fees: |
Quotations can be provided based upon the approximate number of monthly transactions and estimated turnover |
|
