HOW TO SET UP A COMPANY IN HUNGARY FROM ABROAD?

17 March 2023

Hungary is a popular target for investing in the Central Eastern European region thanks to the 9% tax on capital gains for SMEs and 15% personal income tax for individuals, which tax rates are among the lowest for both businesses and private individuals across Europe. However, there are extra requirements for foreigners that are important to pay attention to. In order to avoid unpleasant surprises, we would like to draw your attention to the following when you are setting up your company in Hungary as a foreigner.

1. Company documents signed abroad

The company documents must be drafted in Hungarian or bilingual, including Hungarian version. In addition, the signature shall be certified (legalized) either by the notary public or by the Hungarian consul located in your country or the documents shall be countersigned during a distance-countersignature video-call.

In every case the company documents are drafted by an attorney at law, and are sent to the company via e-mail.

The company prints the papers and

a)       brings them to the notary public, to request an “Apostille”, or

b)      brings them to the Hungarian consul to request authentication (in case the country where the documents were signed is not part of the Apostille Convention), or

c)       sends the original copies to the attorney who will request a video call with the signatories to validate the signatures and will countersign the documents.

2. Foreign company as a shareholder

In case if the shareholder of the company is a foreign company, the Court of Registration must make sure that the foreign company really exists, and the representative has the right to represent such a company.

Therefore, a Company Certification issued by the authority that registered the foreign company, not be older than 3 months, must be submitted to the Company Court.

Furthermore, the representative shall provide a document that proves that he is entitled to represent the company (for example with specimen of signature, or any other authentic document).

As these documents are issued by foreign authorities, and signed abroad, you may need either legalization or Apostille to them.

Country where the certification is issued	Legalization	Apostille
has bilateral agreements with Hungary about accepting each other’s documents issued by authorities	do not need	do not need
does not have bilateral agreement with Hungary, but it is part of the Apostille Convention	do not need	need
does not have bilateral agreement with Hungary and it is not part of the Apostille Convention	need	need

3.Necessity of the service agent

The shareholder and the company representative must be available in Hungary concerning postal delivery by the authorities.

If either of them does not have a Hungarian address, they must appoint a service agent who will officially receive their official letters (for example authorities, banks, etc.).

4. Opening bank account

After the successful registration, the company must open a bank account in 8 days after the company registration.

Each bank has different rules but usually they require the personal attendance of the managing director.