How to open a business in Hungary - Cost of opening a business in Hungary

How to open a business in Hungary:

Hungary is rapidly becoming one of the most attractive destinations for entrepreneurs looking to expand or start a businesses in Europe. With its central location in the heart of Europe, highly skilled workforce, and competitive operating costs, Hungary offers a host of opportunities for businesses across various sectors. Whether you’re a seasoned entrepreneur or new to the world of business, knowing how to open a business in Hungary is a critical first step. This article will guide you through the essential steps, legal requirements, and costs of opening a business in Hungary.

Why open a business in Hungary?

Before diving into the logistics of opening a business, it’s worth understanding why Hungary is an appealing choice. Hungary’s strategic location makes it a gateway to both Western and Eastern European markets. The country boasts a robust infrastructure, including well-developed transportation networks, and it is part of the European Union, offering businesses access to the vast EU market.

Hungary’s business climate is also competitive, with low corporate taxes and relatively low operational costs compared to other EU countries. The Hungarian government has made significant efforts to encourage foreign investment, providing incentives and support for new businesses, particularly in high-tech, manufacturing, and service sectors.

Cost of opening a business in Hungary

Understanding the financial aspects of opening a business in Hungary is essential for proper planning. The cost of opening a business in Hungary can vary depending on several factors, such as the type of business structure, location, and scale of operations. In general, setting up a Limited Liability Company (Kft.) requires a minimum share capital of HUF 3,000,000, along with legal and administrative fees. Additionally, entrepreneurs should consider ongoing expenses such as accounting services, office rental, and compliance costs to ensure smooth business operations. Despite these expenses, Hungary remains one of the most cost-effective locations in the European Union for establishing and running a business.

Steps to open a business in Hungary

Opening a business in Hungary follows a clear, systematic process, and while the procedure is generally straightforward, there are legal and financial requirements you need to be aware of.

Choose your business type
The first step in company formation in Hungary is deciding on the structure that best suits your needs. The most common business structures in Hungary include:
- Limited Liability Company (Kft.):
  A popular choice for small and medium enterprises (SMEs). This option limits the liability of shareholders to their capital contributions.
- Joint-Stock Company (Rt.):
  Typically used for larger businesses or those seeking to raise capital through public offerings.
- Sole Proprietorship:
  Ideal for individual entrepreneurs, but liability is not limited, meaning personal assets can be at risk.
It’s essential to consult with a company formation agent in Hungary or an accauntant in Hungary to determine the best business structure for your needs.
Register Your Business
Once you’ve decided on the structure, the next step is to register your business. All companies must be registered with the Hungarian Registry Court. According to this at least the following documents has to be prepared, officially signed and submitted to the Registry Court: deed of foundation, articles of association, list of members and signature sample. This step is crucial when opening a business in Hungary to ensure compliance with local laws. When the company is registered, it will get the Hungarian VAT number and the EU VAT number as well.

You will also need to select a registered office address in Hungary. This can be a physical office space or a virtual office in Hungary.
Open the Client Gate (“Ügyfélkapu”):
One of the essential steps when starting a business in Hungary is opening the Client Gate at the Embassy in your home country or at one of the Government Offices in Hungary. This step is necessary for all businesses in Hungary to ensure compliance with legal requirements and to facilitate communication with the Hungarian authorities, such as tax filings and official notifications.
Open a Bank Account
A business bank account is essential for businesses in Hungary. You’ll need to provide your business registration documents, tax ID, and other relevant documents to open an account in Hungary. Hungary’s banking system is well-developed, and there are many banks offering services tailored to businesses.
EORI number, Licensing and Permits
Depending on the nature of your business, you may need specific licenses or permits to operate. For example, businesses in regulated industries such as healthcare, food services, or construction may face additional requirements. It’s important to check if your business requires any special permits before launching, such as obtaining an EORI number in Hungary for customs-related activities.

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How to open a business in Hungary – cost of opening a business in Hungary

Steps to open a business in Hungary

How to open a business in Hungary – cost of opening a business in Hungary

Steps to open a business in Hungary