Main steps to Form a Kft. in Hungary:

Starting a business in Hungary, understanding the steps of the Hungarian company formation is essential:

1. Prepare Documentation: After getting the supporting documentation (passport, proof of home address, tax number, etc.) the first task is to prepare the registration documentation, including:
   • Articles of Association: This document outlines the company’s structure, purpose, and the rules governing its operations.
   • Signature sample: The signature sample of the company is a documented representation of the official signature of its authorized representative.
   • List of members: This document consists the name and address of all shareholders.
2. Signing meeting: During the official signing meeting the founders have to sign all registration documents properly before the submittal to the Registry Court.
3. Incorporation of the new company: Once the necessary documents are signed, the Articles of Association and other required documents has to be submitted to the Hungarian Registry Court. After the submittal the Court incorporates the company within a couple of days.
4. Obtaining local and EU VAT number: After the incorporation the company will get the local VAT number and the EU VAT number from the National Tax and Customs Administration of Hungary (NAV).
5. Opening the client gate: The so called client gate (Ügyfélkapu) is the access to the electronic government system in Hungary and essential for the accountancy to start the accountancy and prepare the company gate registration.
6. Open a Bank Account: When the company is incorporated, you need to open a bank account in the name of the Kft. where the minimum share capital will be deposited.
7. Additional Considerations: Depending on the nature of your business, you may need to obtain specific licenses or permits to operate legally.

Alternative Capital Contributions

While the standard requirement is HUF 3 million, there are nuances to consider:

• In-Kind Contributions: If shareholders opt to contribute assets instead of cash, the value of those assets must be verified and justified in the Articles of Association. This can include equipment, property, or intellectual property.
• Startup Flexibility: It is possible to postpone the payment of the share capital for a maximum of 3 years. Some entrepreneurs choose to delay the payment of the capital by 1, 2, or 3 years and then increase it as the business grows. While this is allowed, the initial capital must still meet the HUF 3 million threshold upon registration.