With a number of advantages, from lower tax costs to prime location, there are several reasons why it can be worth considering Hungary as a candidate for where to set up your company. If you’re aware of the benefits and are serious about your options, you might be wondering how you can actually achieve your goals and get your business up and running.
To give you a helping hand, here’s a quick look into some of the things that you’ll need to know when starting up a business in Hungary.
What will you need?
The good news is that getting established won’t be too difficult, as there isn’t much to deal with in terms of red tape. Some of the most important requirements are a registered address, bank account and accountant – all of which need to be based in Hungary. Outside of this, you’re generally going to need:
- Documents of incorporation and a commercial license
- Business name and address of offices
- Types of activities and the location of said activities
Where to register
Of course, to officially be set up for business, you’re going to need to register your company with all the necessary authorities. You’ll need to get the correct paperwork submitted to:
- The Central Office of Statistics
- The Institute of National Insurance
- Regional Court of Registration
Additionally, don’t forget the tax authorities. Even if the tax rates are known for being low in Hungary, you’ll still need to ensure that you’re enrolled, certified and ready to get your payments underway if you want to avoid any issues later on. In general, you’ll only need to submit forms to the National and Regional Income Tax Authorities, and you should be good to go.
The different types of businesses
Typically, another vital consideration of company formation in Hungary is the type of business that you’re going to want to set up – as you’re going to need to register your company under a particular title for the necessary paperwork to be complete. There are seven business forms, each of which is unique in terms of the advantages and restrictions that they offer. The different options are:
A general partnership (also known as an unlimited partnership), will likely be ideal for businesses where all partners will be liable for business operations. Limited partnerships on the other hand, will be better suited for companies with both a limited and unlimited owner partnership. Each has its own pros and cons, as well as its own requirements.
There is typically one major difference between private and public joint-stock companies. A private company that’s limited by shares is usually more cost-effective, while starting up a public one will often be more expensive. It’s important to choose the right one for your business needs, regardless of cost.
Outside of those made to suit partnerships and joint-stock companies, there are a few other company types available. Here’s a quick look into these:
- Limited Liability Company (ideal for medium/small businesses)
- Branch Office (ideal for any company hoping to open up a branch in Hungary)
- Commercial Representative Office (ideal for several business functions on behalf of a parent company)
It is extremely important that you select the right one for your business to avoid potential pitfalls that could endanger your chances of getting established in Hungary.