The Process of Company Formation in Hungary

Starting a company is a significant step, and selecting the right corporate form is crucial. This guide provides an overview of the legal requirements, capital considerations, and steps necessary to establish a company in Hungary. If you would like to found a company in Hungary, please contact us for professional assistance. Our team of expert lawyers can guide you through every step of the process, ensuring compliance with Hungarian laws and a smooth setup. Reach out today to get started! The actual company registration is conducted electronically. Once the application is submitted by your legal representative, the Hungarian Company Court typically processes and registers the company within 1-3 business days if all documents are in order.

Choosing the Right Corporate Form

Hungarian law defines several corporate forms, including general partnerships, limited partnerships (Lp.), limited liability companies (Ltd.), and joint-stock corporations (Co.). The limited liability company (Ltd.) is the most popular due to its flexibility and protection for owners’ assets. Choosing the right structure depends on your available capital and liability preferences.

Capital Requirements and Contributions

The minimum share capital for a Ltd. is HUF 3 million (approx 7.500 EUR), which can consist of monetary contributions or non-monetary assets (apport). Contributions do not have to be fully paid at the time of registration, but unpaid capital affects dividend distribution.

Liability Considerations

In a Ltd., members have limited liability, meaning they are not personally responsible for the company’s debts. This distinguishes it from general partnerships, where members bear unlimited liability.

Choosing a Company Name

A company's name must include the chosen corporate form (e.g., Ltd.) and a unique leading word. The name must be distinctive and adhere to naming regulations, avoiding similarities with existing companies.

Registered Office and Locations

Every company must have a registered office, which requires owner consent if not owned by the company. Additional premises or branch offices in other municipalities must also be designated and documented.

Appointing a Managing Director

The managing director, responsible for daily operations, can be a member or an external individual. Legal restrictions apply, ensuring that the appointee has no disqualifications, such as a criminal record.

Steps for Registration

Company registration is conducted electronically via a legal representative. Necessary documents include the founding agreement, owner consents, and related declarations. After approval, the company receives a tax number, registration number, and statistical code. A corporate bank account must be opened, and the company must register for local business tax.

Conclusion

Company formation in Hungary involves selecting the right structure, preparing documentation, and meeting administrative requirements. Consulting a legal professional ensures compliance and a seamless registration process, paving the way for successful business operations.