Blog » 4 TIPS FOR FOREIGNERS WHEN SETTING UP A COMPANY IN HUNGARY
4 TIPS FOR FOREIGNERS WHEN SETTING UP A COMPANY IN HUNGARY
25 April 2017
Creating a company in Hungary became very convenient and fast nowadays. However, there are some extra requirements for foreigners that can make this simple procedure longer and problematic, especially in the field of official documents issued and/or signed abroad. To avoid unpleasant surprises, we tell you the four most important thing you need to keep in mind as a foreigner when setting up your company in Hungary.
1. Signing documents abroad
Hungarian courts accept company establishing documents signed abroad with the condition being written in Hungarian (or written 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.
The certification (legalization) of signatures is necessary for confirming the signing person’s identity, and its method is the following.
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 brings them to the notary public, to request an “Apostille”, or to the Hungarian consul to request authentication. After signing the documents in front of the notary public, or consul, the latter certifies the signature.
If the country where you sign the document is not the part of the Apostille Convention, only certification by the Hungarian consul is the only possible way.
The fee of the Apostille and authentication differs in each country, so it is advised to look the charges up at your place.
2. Foreign company as a shareholder
If you wish to create a subsidiary in Hungary of 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.
For this reason, the Court of Registration requests the shareholder to provide a Company Certification issued by the authority that registered the foreign company. This Company Certification must not be older than 3 months.
Apart of this, the representative shall also 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.
There are some countries that have bilateral agreements with Hungary about accepting each other’s documents issued by authorities. If the certification is issued in such a country, you will need neither legalization nor Apostille to the documents.
If the certification is issued in a country that has no bilateral agreement with Hungary, but it is part of the Apostille convention, you can request Apostille at the nearest notary public. After getting Apostille, the document can be used in Hungary.
If the country neither has bilateral agreement with Hungary, nor accepted the Apostille convention, you have to request legalization for the document at the Hungarian consul.
3. Service agent
Hungarian law expects both the shareholder and the company representative to 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.). This applies to foreign companies and individuals, too.
The lawyer who drafts and countersigns the company documents is often chosen as service agent for practical reasons.
4. Opening bank account
As you can see, establishing a company can go on its way without even coming to Hungary. However, you have to keep in mind that even after a successful registration there are important things to arrange.
The most important is that you have to open a bank account for the company in 8 days after the company registration. The banks rules are very strict in order to prevent money laundering, and opening a bank account in Hungary can only be done personally by the managing director of the company.
Bank transactions can be done on the Internet, and you can give a long-term power of attorney to somebody to arrange bank matters for the future, but for the first time is very important that you go to the bank personally so that the bank can check your identity.
IS A FIXED AMOUNT OF DAMAGES VALID IN EMPLOYEE NON-COMPETE CLAUSES IN HUNGARY?
In its recent decision, the Curia dealt with questions, which may affect many employer in Hungary. Whether the non-compete clause of an employment contract, obliging the employee to pay a fixed amount damages in case of breach of the non-competition agreement, is valid? We analyse the decision in our short article.Read more »
CAN YOU SUE BOOKING.COM IN YOUR OWN COUNTRY? - THE ECJ RULED
In the recent past, the Court of Justice of the European Union had to deal with the question whether an accommodation operator registered to Booking.com can sue the latter because of abuse of dominant position. In this short article we analyse the background of the case and the decisions of the Court of Justice of the European Union.Read more »
ONLINE CONSUMER CONTRACTS – IS YOUR BUSINESS CONCERNED?
Black Friday is once again around us: the time when online shops and the consumer protection authority cash in some extra income every year. We guess you’ve already read about the extreme discounts and the record-breaking fines by the authorities, so in our article, we will explain, that without your knowledge, your own business can easily step into the field of consumer protection, in which case, your contracts are subject to special rules. In our article, we show you how you can recognize these situations and, of course, summarize the obligations.Read more »