Setting up a company in Hungary follows the same legal system that is currently used in other countries in the EU.
Our guide will help you to find out more about the procedure of forming a company in Hungary.
Foreign individuals and companies are freely allowed to pursue business activity in Hungary.
Individuals may obtain a sole trader’s licence, while companies shall be registered at the Court of registration.
The time required to set up a company in Hungary is as short as approximately 1 week. This includes consultation, preparation of the legal documents, and registration at the court.
Legal representation is a must in company formations and modifications. However in the process of forming a company in Hungary there are questions beyond the competence of the lawyer it is also advised to engage a consultant. He may explore your needs in depth and share information that are essential for the initial financial and tax planning of the new company, and gives you the best solutions for the particular requirements.
Founders of the company must sign the company’s constitutive document, which, together with some other documents must be countersigned by a Hungarian lawyer, who will then apply for the registration of the company from the Court. The registration process is fully electronic with electronic signatures either from the side of the attorney or the court of registration. Hard copy certificates are not issued in the process.
At the very same time the company is registered it will also get its VAT number. The company may also apply
You may operate your business as a Sole Proprietor, like 70% of US businesses. However, if business should become fabulous and you begin to rake in some serious cash, then it could be wise to incorporate, as a method to lower your taxes and protect profits.
You may be implementing a growth strategy that requires you to take on additional investors, or maybe implementing your exit strategy, with a plan to sell your business, perhaps to employees through an Employee Stock Option Plan (ESOP). Either scenario may prompt your accountant or business attorney to recommend that you establish a separate legal entity and the preferred strategy could be to incorporate.
What does that mean in practical terms? For a Solopreneur consultant or small business owner, incorporating usually means setting up an S Corporation. A Limited Liability Company (LLC) is another frequently used legal business entity and there are certain similarities between the two.
Both LLCs and S Corporations provide business owners with a degree of protection from lawsuits and creditors.Yet if negligence is involved, the “corporate veil” of protection will be pierced and owner(s) will be liable for any damages.
Second, there are certain similarities in how taxes are handled. LLCs and S Corporations, unlike the more common C Corporations, allow a “pass through” of business profits or losses to the owner’s (the S Corporation shareholders) personal tax Form 1040 in accordance with the share of ownership. There is no separate (double) taxation, as occurs with C Corporations. Both S Corporation and LLC owners