06 November 2017

Online shopping is more and more popular among customers for certain reasons: it is more convenient and often cheaper than traditional shopping. Online shopping is not only an attractive alternative for the shoppers but for the traders, too. By opening an online shop, you can remove the need for expensive retail premises and customer-facing staff. Another huge advantage is that you can expand your market beyond local customers very quickly. Here are 4 things that you need to clarify if you decided to open an online shop in Hungary.

1. Do you need to set up a Hungarian company?

Operating an online shop is considered as a commercial activity which in Hungary can be pursued by traders. Unless a certain activity requires a special company form (eg. tobacco in Hungary can only be sold by a company which has at least one shareholder with unlimited liability), the trader is free to choose its company form.

Companies who have a registered seat in an EEA-country are free to provide services in Hungary. Companies who are situated in a non-EEA country may provide services if this is allowed by an international treaty.
This means that in most of the cases it is not necessary to set up a Hungarian company in order to open an online shop, especially if you have a company registered in an EEA-country.
Nevertheless, in certain cases, you need to have a Hungarian VAT number thus you have register your foreign company before the Hungarian Tax Authority. To understand the conditions may be challenging, thus it is recommended to seek an accountant’s help

2. Do you need a permit?

There are certain products which in Hungary can only be marketed retail shops based on a permit (eg. animal health products, plant protection products).

This means that those products which are free to be sold online can be marketed without a permit. In the meantime, you have to notify the competent commercial regulatory authority (the notary who is situated where the registered seat of your company is). The procedure is a quite simple and cheap.

In case you decided not to set up a Hungarian company, there is kind of a loophole as there is no competent authority in Hungary for your situation. However, you were probably required to make some kind of registration in home country based on your own law.

3. Do you need terms and conditions?

You will definitely need to have appropriate terms and conditions. If you are already present on foreign markets, at first it might seem a good idea to simply translate your existing terms&conditions to Hungarian.

Nevertheless, we would like warn you against this half-way solution as you might lose more money than what you have saved.

Especially in case of B2C transaction (where the shoppers are natural persons who do not act for business purposes) there are several consumer protection laws which apply on a compulsory basis and you cannot differ from them in your terms&conditions.

You are required to inform your consumer buyer about dozens of things (eg. their right to withdrawal, their right in connection with faulty performance). If you fail to do so, the contract concluded with the buyer might be considered as null and void.

4. Do you need a privacy policy?

When you operate an online shop, you will process a number of personal data, like the name, address, e-mail address or IP-address of your buyers. You may want to send newsletters or targeted offers for your customers.

In order to process personal data, you need to have a legal basis which is in most of the cases, the consent of the data subject which can be obtained with the usage of consent forms.

The consent shall be based on accurate information which you can give in the privacy policy. Without a valid consent your data processing might be considered as unlawful and you will risk huge data protection fines.

Based on the above, for the lawful operation of your online-shop a well-founded privacy policy is a must.

In case you have any questions in connection with opening an online shop in Hungary, feel free to contact our team.