Hungary Summary Guide

Business Forms in Hungary

Business forms in Hungary likely to be of interest to small business are the Sole Proprietorship, Limited Liability Company and Limited or General Partnership.

A company, or other business entity, can commence in business as a ‘pre-company’ by signing the documents relating to the formation of a company (eg memorandum and articles of association) and provided that these have been submitted to the local Court of Registration. A decision on registration will usually be made within 15 to 30 days. If no decision is forthcoming by the Court within 30 days, the business will be deemed as automatically registered nine days after the expiry of the 30-day deadline.

The new business entity must register with the tax authorities within 15 days of submitting the application for registration. There are charges associated with registering a company, but registering for tax and social security does not involve any fees.

Provided a Sole Proprietor, or self-employed individual, has complied with the proper entry visa and residence and work permit requirements, they can commence in business as long as they register for tax and social security beforehand. There is unlimited liability for the proprietor of such a business.

Limited Liability Company. There is a minimum capital requirement of HUF500,000 to found a limited liability company. For all forms of Limited Liability Company, regardless of the number of founders and the size of the company, articles of association are required and must be countersigned by a Hungarian lawyer. A number of other documents are required when applying to found the company, including evidence that the required capital has been lodged in an appropriate account, and details of the officers and directors. In some cases, a commercial licence might be required to trade – this depends on the nature of the business. Liability is restricted to the share capital of each member.

General (Unlimited) Partnership. There is unlimited liability and a partnership must have at least two members. There is no minimum start-up capital requirement. This form of business is not a legal entity in its own right.

Limited Partnership. There must be at least two partners, one of whom must have unlimited liability. Again, there is no minimum start-up capital requirement.

Branches of foreign companies are also permitted to operate in Hungary, provided that the foreign company has registered with the Court of Registration.

VAT applies to any resident business with a turnover exceeding HUF2m; there is no threshold as such for non-resident businesses.

Hungary Summary Guide Contents

Hungary Summary

Hungary Summary Chart

Hungary Residence

Taxation of Business People in Hungary

Living and Doing Business in Hungary

Business Forms in Hungary

Latest Comments

Expat Brit

Hi,

I am facing a dilemma and would like to invite any reader to advise me.

I am a Brit who has lived outside UK since 1993- initially in Belgium (5 years) & subsequently in 4 African countries. After a year outside UK, the UK Inland Revenue confirmed my status as ‘non-resident’ for tax purposes and as I have had no income in UK, I have not completed a UK tax return for many years. I visit UK very rarely, normally for one or two weeks per year.

In May 2011, I was made redundent by my employers, who were downsizing. This coincided with a move to retire in the Netherlands, where I now have official residency (my wife is Dutch). I thought that, at 63 years of age, I would be unlikely to find suitable employment; in fact, I have not tried hard and had resigned myself to permanent (but slightly premature) retirement.

However, to my surprise, I have recently been approached (through a mutual acquaintance) by a company that wishes to use my skills on a project in the Isle of Man. The role, if & when confirmed, would see me working for about 10 days a month in Isle of Man, with about 5-7 additional days per month, working from home. Contract will be for about two years. The firm has asked me to confirm if I would prefer to be paid (and therefore be taxed) in Netherlands or Isle of Man, the idea being that I create a self-employment entity for this employment. I have no data on which to base a response. Given Isle of Man's traditional ‘low tax ‘environment, are there any benefits to declaring an income in IOM? Are there any Isle of Man residency implications? Netherlands takes a tax cut on total world wide income, and, as I have never had any contact with the Dutch authorities, I am reluctant to start such a relationship now. Do I have to declare income in both countries, with a breakdown prorata to the time spent in each jurisdiction? Should I declare income to UK Inland revenue?

If anyone has pertinent advice on these points, I’d be grateful to hear them.

TJM @ Eindhoven, NL

T. Dog

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Purchasing investment-link insurance for my staff

Would that count as income tax to my staff? And would that count as expense to my company?Michael

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Irish crisis - effects on small business?

Hi all,

Just wondering if anyone 'on the ground', as it were, might be reading and able to help me...I was considering relocating my hairdressing business from the UK to Ireland before the economy started to go properly belly-up...now, not so much.

Are things as bad as they seem over there, or is it being over-hyped by the media? And is the government still keen to support small business people? Cos if not, I'll look elsewhere...

Thanks,Kate

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Jersey vs. Malta??

Hi, I live in South Africa, and along with 2 business partners (one in South Africa and one in Ireland - all South African citizens though) are setting up a company that designs Smart phone applications. As they will be sold on the various platforms (none of which operate out of South Africa)we have to list our company as operating out of Ireland anyway. As such, we have decided to set up our company in the best tax country and are wanting info on whether Jersey or Malta is best? If anyone has some inside info we would really appreciate it!! Thanks!Mary

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Living in France contracting to Australian company

I am moving full time to France in Jan 2012 where I will be working as a freelance contract engineer to a number of Australian based companies. It is my choice to move to France not a work requirement. I will be renting my house out in Austrlalia and renting a house while I am in France. I hold both EU & Austrlain citizenshiip. I am married with 2 young children. Approx total family income $100k AUD.
Do I pay tax in France or Australia or both ?
Any help or guidance would be much appreciated.France move

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