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enfold_admin2024-10-17 12:25:272024-10-17 12:28:26How Much Does It Cost to Start a Company in HungaryCompany Types in Hungary:
Each type of company offers distinct advantages and requirements, influencing your business’s operations, liability, and taxation. This article helps to decide the right company type before the company formation in Hungary, and delves into the primary company types in Hungary: Kft. (Korlátolt Felelősségű Társaság), Bt. (Betéti Társaság), Zrt. (Zártkörűen Működő Részvénytársaság), Nyrt. (Nyilvánosan Működő Részvénytársaság), and Fióktelep (Branch Office).
- Kft. (Korlátolt Felelősségű Társaság)
The Kft. is the most common form of business entity in Hungary, akin to a limited liability company (LLC) in other jurisdictions.
Characteristics:
- Limited Liability: Shareholders are liable only to the extent of their capital contributions. This means personal assets are generally protected from business debts.
- Minimum Capital: The minimum share capital is HUF 3 million (approximately €7,500).
- Ownership: A Kft. can be formed by one or more individuals or legal entities. There is no upper limit on the number of shareholders.
- Management: The management structure can include one or more managing directors.
Advantages:
- Popular choice for small to medium-sized enterprises due to its flexibility.
- Simplified taxation rules, with flat corporate tax rate.
- Bt. (Betéti Társaság)
The Bt. is a limited partnership, combining elements of a partnership and a corporation.
Characteristics:
- Two Types of Partners: It consists of general partners, who have unlimited liability, and limited partners, whose liability is restricted to their capital contributions.
- No Minimum Capital Requirement: There is no statutory minimum capital requirement, making it accessible for entrepreneurs starting with limited funds.
- Ownership and Management: At least one general partner is required, while the number of limited partners can vary. The management can be conducted by the general partners.
Advantages:
- Flexibility in management and profit distribution.
- Suitable for small businesses where partners are closely involved in operations.
- Zrt. (Zártkörűen Működő Részvénytársaság)
The Zrt. is a private limited company, similar to a private limited corporation.
Characteristics:
- Share Capital: The minimum share capital required is HUF 5 million (about €12,500).
- Shares: Shares cannot be publicly traded, which helps maintain control among shareholders.
- Management Structure: A board of directors is required, and shareholders can also elect a supervisory board.
Advantages:
- Offers a more formal structure suitable for larger businesses.
- Limited liability for shareholders, with enhanced credibility in the market.
- Nyrt. (Nyilvánosan Működő Részvénytársaság)
The Nyrt. is a public limited company, similar to a publicly traded corporation.
Characteristics:
- Minimum Share Capital: A significantly higher minimum capital requirement of HUF 20 million (about €50,000).
- Publicly Traded: Shares can be offered to the public and traded on the stock exchange.
- Corporate Governance: Must adhere to strict regulations, including mandatory audits and shareholder meetings.
Advantages:
- Access to capital markets for funding growth.
- Enhanced public profile and credibility.
- Fióktelep (Branch Office)
A Fióktelep is a branch of a foreign company operating in Hungary.
Characteristics:
- No Separate Legal Entity: It is not considered a separate legal entity and operates under the name of the parent company.
- Registration Requirements: A branch must be registered with the Hungarian authorities and must comply with local regulations.
- Liability: The parent company bears full responsibility for the branch’s debts and obligations.
Advantages:
- Allows foreign companies to establish a presence in Hungary without forming a new legal entity.
- Simpler to set up compared to establishing a new company.
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