Due to the fact that in the EU Hungary has one of biggest growth of GDP Hungary came into the spotlight of foreign investors. On the other hand Hungary has one of the lowest company tax rate. These two key factors resulted in the fact that there is a demand on the market to establish companies in Hungary. There are several factors that should be taken into account before any step made forward. You can find 5 hints below to make sure everything goes as it should.
Proper Legal Support
In Hungary, in order to have the proper legal effect of your company establishing deeds it should be made by a public notary or an attorney at law, however, an attorney at law can have a wider scope of representation.
Hint No 1: Be careful if anyone advises you to enter into an agreement without any attorney or public notary.
Legislation Regarding Companies
The Act V of 2013 the Hungarian Civil Code regulates the main points regarding the companies.
In Hungary it is strictly regulated what type of companies you can establish.
You can establish a partnership, an Ltd, company limited by shares, and a public limited company irrespective of your citizenship. Generally speaking the differences among the types are in relation to the scope of liability, and the rights and obligations of the shares.
Hint No 2: If you do not have any Hungarian address than you should have a person as a delivery agent registered into the Company Registry.
Please find below the link to the Hungarian Civil Code in English:
http://njt.hu/translated/doc/J2013T0005P_20180808_FIN.pdf
How to Start: Necessary Basic Steps
I would recommend hiring a lawyer from the very first moment in order to have a professional legal support which assists you to go to the right direction and avoid any time wasting.
Regarding each type of company there are some things that should be considered and determined. We see the list below:
- company name: it should differ from the already existing ones
Hint No 3: In the following link you can check by yourself easily at the official Company Registry if there is any company with the same or similar name:
- minimum share amount: it is different type by type
- seat: each company has to have a registered seat where all the official documents can be received. In case you need any company seat service we can support you through our business partners.
- managing director: each type of company has to have appointed a person who is responsible for the control of the company
Hint No 4: The same regulation applies here: if you don’t have any Hungarian address than you should have a delivery agent.
- scope of activities: By the establishing procedure you should determine the exact scope of activities, which is crucial since you can issue your invoice in relation to the activities you provide through your company. I would advise contacting an accountant who can support you picking the applicable activities for your company.
Further Specific Questions
In relation to a company there are further steps that should be discussed when contacting an attorney. The voting rights, the rate of the right for the dividend should be also considered.
Hint No 5: In Hungary you can establish your company with state-provided templates which can reduce the process of drafting the necessary documents. You may also establish it with specified documents.
Generally speaking the process of establishing a company is quite quick after submitting it, and the state fees are also low.
Our law firm along with our cooperating accountants and tax advisors can support you in the process of establishing a company, and we also accompany your operations from the very first time with drafting your contract templates, employment contract templates, reviewing your partners’ draft contracts or even in the process of M&A.
Disclaimer
Articles posted on present page shall not be deemed as legal consultation more over shall not be deemed as the official declaration of the Attorney at law. The Attorney at law operating present website may issue its official legal declaration based on only a written fully executed engagement agreement. The Articles posted on present website were issued based on the applicable law of the time of the post therefore it may happen that sue to any change in legislation part or the whole of the articles may not be applicable furthermore based on a certain case the competent authorities or court may determine such case differently.
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