Because of its central location in the continent and the good connections with the neighbouring markets, as well as its growing economy, Hungary is a great place to start your own business. In fact, to attract new businesses, Hungary has made the process of starting a business very straightforward and is offering many perks to potential business owners like a corporate tax of only 9%, which is the lowest rate in the whole of Europe.
Advice for third-country nationals
Whereas EU/EFTA nationals can start and manage their own business in Hungary without a lot of paperwork, if you're a third-country national you'll most probably need to apply for a residence permit. There are several types of residence permits (consult our section on Work Permits for more) but the best one for your case would be the 'Residence Permit for the Pursuit of Gainful Activity'. Just be aware that if you intend to also perform actual work in the business you own, you'll need to apply for a 'Residence Permit for the Purpose of Employment'. However, if you don't intend to relocate to Hungary just yet, it is totally possible to start your own Hungary-based business from abroad, by hiring a Hungarian law-firm and a Hungarian accountant to assist you with the technicalities.
The process of setting up your business
Setting up your own business in Hungary usually doesn't take more than three business days maximum. Although you'll need to check what applies in your particular case, as a general rule you'll need to do the following:
- Have a Hungarian attorney-at-law prepare your corporate documents, which will be signed by you and any other company founders.
- Register your company's physical address. This address needs to be publicly available, as any letters delivered to your business address by the authorities are considered to be 'read' by you. If there's any action to be taken on your end, you should do so within 8 days of receiving your mail.
- Open a bank account in a Hungarian bank. You are required by law to do so within 8 days from your company's incorporation date ' and as the owner, you need to go to the bank in person (you are not allowed to grant someone the Power of Attorney to do it for you).
- Register your company at the Hungarian Court of Registry, which will grant you a tax identification number.
- Get an accountant. Even if your company's activity is non-existent yet, or you have a very small turnover, you're still required by the Hungarian law to have an accountant from the minute you start a business in the country. Your accountant will be tasked with submitting reports to governmental and municipal authorities like the Tax Office, the Health Authority and the Statistics Bureau, and there are very strict fines if they fail to do so.
The cost for setting up your own company, depending on the type of company you opt for, can be anything between HUF 50,000 (EUR 172) and HUF 600,000 (EUR 2,069). Find out more here. You should also be aware that if your business deals in financing, insurance or any other capital market activities, you may need a special permit from the Hungarian Financial Supervisory Authority (PSZÃF).
Good to know: If all this sounds overwhelming, there are companies like Helpers that can assist you with all the technicalities. Find out more here.
We do our best to provide accurate and up to date information. However, if you have noticed any inaccuracies in this article, please let us know in the comments section below.
