Real estate article series Part 6: Legal pitfalls of buying a newly built Real Property
Real estate article series Part 6: Legal pitfalls of buying a newly built Real Property In fact, it is relatively easier to buy a second-hand property than a property that is still under construction, because you can see an older property as it is, whereas a newly built property, it may not even be finished upon signature of the contract. This is essentially an assumption of risk on the part of the buyer, as any defects or deficiencies in the Real Property may become apparent much later. In Part 6 of our series of articles on Hungarian Real Estates, we briefly list the most important things to bear in mind when buying a newly built Real Property. 1. It is advisable to check the building (construction) company, which in many cases is also the seller If the company concerned is subject to liquidation or enforcement proceedings, it is not advisable to enter into a contract with them, as there is a good chance that it is in debt to one or more claimants/creditors, which may ultimately pose a problem for the sale or transfer of possession. 2. Check the title deeds of the land on which the new residential building will be built This is to clarify the identity of the seller and whether there are any encumbrances on the land. If there are encumbrances, the seller will be obliged to ensure that the buyer subsequently acquires title free of encumbrances, but it may be worthwhile to use a lawyer from the beginning of the whole process. To help you understand the contents of the title deed, we recommend Part 1 of our Real Property article series. 3. Clarification is needed on exactly what is included in the purchase price (e.g. whether or not it includes certain technical contents) 4. Preliminary agreement and the conclusion of the final contract Until the Real Property is built and registered in the Land Registry, we cannot acquire ownership of it, but we can settle our intention to enter into a final contract at a later date by means of a preliminary contract, which essentially lays down in advance all the essential elements (payment of the purchase price, transfer of possession, force majeure, possibility of contract modification, deposit, penalty, etc.) that will be included in the final contract. The essence of the preliminary contract is therefore that the parties commit themselves to the essential terms on which they will conclude the final contract at a later date. The terms and conditions included in the preliminary contract can be enforced by judicial process in the same way as if it were an obligation in the final contract. 5. Authorization to use and transfer of possession It is also essential to be aware of when a newly built Real Property is ready for occupation and when the buyer can take possession of it, i.e. when he can use it and when he has to bear the costs of its use. The legal use of the constructed residential building is only possible on the basis of a legally valid occupancy permit, which the builder must obtain and which the seller must provide to the buyer in a credible manner. * * * If you are considering buying a newly built Real Property, please contact our office. We will assist you in the complete management of your real estate purchase transaction (from making an offer to purchase, preparing and submitting the preliminary and final contract, and registering the title with the land registry), whether it is a sale or purchase by a private individual or a company. Authors: dr. Farkas Szabolcs László dr. Bajcsay Gergely Please note that the general information provided in this article is for informational purposes only and does not constitute legal advice. We do not assume any liability for any misinterpretation of the above information or for any changes in the law that may have occurred in the meantime. If you have a specific question or legal problem, we are able to provide individual advice after consultation with our office and after a full investigation of the case.
Real estate article series Part 5: What should I pay attention when buying a Real Property with bank loan?
The question may arise: are there any special requirements in case we would like to buy a Real Property which transaction is partially financed by bank loan? The answer could be a simple yes and the case is closed and there would be no need to read on though, but it is not that black and white. Let’s see what need to be checked in such cases! In part 5 of our real estate article series, we will deal step-by-step with the possible issues of buying a property with a bank loan. 1: For a better understanding of the contents of the title deed, we recommend Part 1 of our series of articles on Hungarian Real Estates, which deals with the different parts of the title deed. If you are buying an apartment, we recommend Part 2 of our article series, and if you want to clarify the most important legal aspects of a detached house, we have already covered them in Part 3 of our article series. 2. Find out about the credit terms & conditions available from each credit institution: This information can be obtained from the bank’s website or directly from the bank’s representative. 3: Each bank may have different requirements regarding the required content of the sale and purchase agreement, therefore it is of utmost importance that all the content they require is properly included in the agreement in order to ensure a smooth loan process. This will ultimately also be the task of the lawyer acting on the transaction, but it is worth informing him or her in advance of the bank, the type of loan and the amount of the purchase price to be financed. 4. Make sure that there is no claim or charge on the property: Whatever the bank will be, it is expected by the bank that the buyer should ultimately acquire the Real Property free of any encumbrances. If there is a charge on the property, the seller should arrange for the removal of the charge on the property, i.e. the discharge itself. Each encumbrance can be different in nature and we recommend that you seek the advice of a legal professional, for example to cancel a mortgage, a usufruct or a right of enforcement. If the property is also subject to a prohibition on alienation and encumbrance, it is necessary to obtain the authorisation of the holder of the prohibition to cancel the property and to comply with the conditions required (e.g. repayment of the mortgage). It is also possible for the property to be discharged from the amount of the loan that the buyer intends to take out, but the specific conditions for this are also imposed by the relevant financial and credit institution. 5. Bank requirements regarding the loan amount: Whichever bank is approached, ultimately the purchase price of the Real Property will be scheduled so that the final instalment is the loan from the bank itself, but this will require proof of the purchaser’s own payment of the instalments and a lawyer’s certificate of escrow confirming that the seller has in the lawyer’s escrow the authorisation to register the title to the buyer’s name until the full purchase price has been paid. In practice, this means that once the final instalment of the purchase price has been paid to the seller, and thus the full purchase price of the Real Property, the lawyer is entitled and obliged to submit the seller’s title registration or registration permit to the Land Registry in order for the buyer to become the owner of the property. It should be noted that, if the buyer benefits from the Family Home Building Allowance (CSOK) in addition to the loan, the final purchase price instalment must be the amount of the CSOK, without exception. In the case of a CSOK, the property concerned must also meet a number of other conditions, which should therefore be clarified in advance with the bank providing the loan. * * * If you are considering buying a property, please contact our office and get in touch with us. We will assist you in the complete management of your property purchase transaction (from making the purchase offer, preparing and submitting the contract, registering the title with the land registry and handling any possible relief of encumbrances), whether it is a sale or purchase by a private individual or a company. Szerzők: dr. Farkas Szabolcs László dr. Bajcsay Gergely Please note that the general information provided in this article is for informational purposes only and does not constitute legal advice. We do not assume any liability for any misinterpretation of the above information or for any changes in the law that may have occurred in the meantime. If you have a specific question or legal problem, we are able to provide individual advice after consultation with our office and after a full investigation of the case.
Real estate article series Part 4: Bumped into an undivided joint ownership, what should I ask for to protect my long-term goals?
Did we like one of the duplexes? Is there more than one house on a plot and we want to buy one of them? In Part 3 of our series of articles on Hungarian Real Estates, we will look at the specific legal situation where a Real Property has several owners at the same time and each owner has a right to use it according to their ownership share. In legal terms, they exercise this right individually, since all the owners are entitled to use and occupy the entire Real Property. This is from where the special legal category of undivided joint ownership is arisen. What does this mean in practice? There is a plot of land with several buildings on it, but they are not registered in the land register under a separate plot number. In this case, the land is owned jointly by all the owners, but the use of the individual houses built as residential properties or even parts of residential properties is still shared in some way between them. It is therefore possible that there may be as many as 10 to 30 owners of such a property, but the ownership of the property itself is shared between them. The problem arises because the title deed does not (clearly) show who is entitled to use what and to what extent. In such a case, it must be borne in mind that all owners have the right to possess and use the Real Property, but that this must not infringe the same rights of the other owners. It does not matter, therefore, that, for example, 4 residential buildings are occupied by different people, but that the individual residential buildings are still jointly owned, given that they are not listed as separate properties, and this particular legal situation should be covered by an agreement that determines the use of the Real Property, which should be drawn up with the assistance of a lawyer. Why such an agreement that determines the use of the Real Property is important? In the case where, for example, a detached house is physically divided into two parts (with at least 2 owners), legally not qualified as two separate sub-units of a condominium though, it is recommended to draw up a use (sharing) agreement for the residents to determine which part of the undivided common property (which residential building) can be used by which owner. If there is no such agreement, all owners are entitled to use the whole property (e.g. a semi-detached house or two separate houses registered under the same parcel number). A sharing agreement can avoid future disputes, i.e. which owner is entitled to a certain use of the garden on the plot, in what proportion, or which owner is entitled to use the cellar or garage, and who is entitled to use each part of the property on the plot (or even a particular floor or attic level in the case of a single dwelling house) and to what extent. The fact is, however, that this can often cause problems, which is why it is particularly important to regulate the ancillary issues involved in the use of the property, such as the relationship between the co-owners, the preservation of the property, the bearing of common costs, etc., in detail and in a compromise manner in the above-mentioned sharing agreement. But why should we pay attention when we want to buy a property in undivided joint ownership? To clarify ownership shares and possible charges, please download the title deeds of the property. For a better understanding of the contents of the title deed, we recommend you read Part 1 of our series of articles on the title deed. As a general rule, you should ask the seller for the deed of occupancy, as the provisions of the deed will apply to you as the subsequent owner. If such a property will be bought with a loan, it is essential to submit the agreement of use in the course of the loan application, and in many cases, it is required to be a well drafted one which could be ensured if it was drafted and countersigned by a lawyer. In this case, it is essential that if the loan is granted, the mortgage will be registered only on that specific ownership of the Real Property in question and does not extend to the other owners. In case of the sale of Real Property in which co-owners have pre-emption right, it is necessary to obtain a waiver of from all the co-owners, or at least notify them through certified mail otherwise they will be able to take legal action against us since they were excluded from applying their rights. The more co-owners there are, the longer it will take to inform them of their intention to buy, so this is also a factor to be considered with regards to this certain type of Real Property. The rules on construction between the co-owners of an undivided jointly owned property are primarily determined by the use-sharing agreement, but it is essential that each co-owner can only use (build on) his/her share of the property, i.e. that he/she cannot encroach on the common use shares or the shares of the other owners. Otherwise, the mandatory requirements of the local building code must be respected. The most important legal aspects of a detached house have already been covered in Part 3 of this series. * * * If you are about to buy a property or if you have any problems with the title deeds or a copy of the map and other legal requirements or with the interpretation of the sharing agreement, please contact our office. We will assist you in the complete management of your property purchase transaction (from making an offer to purchase, preparing and submitting the contract/Use Sharing Agreement and registering the ownership with the Land Registry), whether
Real estate article series part 3: Buying a family house wisely
We bought our dream house, but later find out that it was built illegally. Is the building not even designated on the Land Register official map? Didn’t we buy the Real Property from the owner? To avoid these and other nightmarish circumstances and disadvantages, we’ll show you what to check as a must t for if you’ve decided to buy a house. In Part 3 of our series of articles on Hungarian Real Estates, we set out the steps you should take to avoid the pitfalls and damaging situations mentioned above. If the pictures in the advertisement or sent by the seller show that you are attracted by the magnificent house, it is important to be careful and consult a lawyer before making an offer or entering into a contract, especially as legal representation is a legal requirement in a sale and purchase transaction. But what can we ourselves, as potential buyers, do beforehand to ensure that our dream Real Property does not turn into a nightmare? 1: – Is it really the owner from whom we want to buy the Real Property? – Is it the sole owner of the Real Property that we are buying from? – Is the Real Property owned by one owner or by further ones as well? – Under what certain legal type is the Real Property registered? – The legal category/name of the property may be different for detached houses, e.g. ‘detached house yard’ or even ‘detached land’ – What encumbrances are there on the property that may prevent or restrict us from acquiring ownership? If there is more than one owner of the property, in order to become the sole owner, all owners should be listed as sellers in the contract or, if applicable, only a certain share of ownership/proportion of ownership can be acquired, but then (also) the legal right of pre-emption of the co-owners must be taken into account. In the case of an legal deemed undivided commonly owned Real Property, there may be several owners of the property, but in reality each owner has a separate right to use the building built on the property. In this case, the ownership could be settled by an agreement determines the Use, the details of which are described in the article below. It is important to clarify whether the property located in internal territory. Why? Real property located internal territory is not subject to the Land Registration Act, i.e. it is not deemed as an agricultural land from a legal point of view and can be built on, so the transaction can be completed relatively quickly. In the case of land outside the area, the Real property is deemed from a legal point of view as a land, which implies a longer transfer of ownership procedure (subject to the approval of the agricultural administration) and it is not certain that you will end up owning it and, if you do, you will have to comply with other legal requirements (e.g. land use). Also if you’re a non-Hungarian citizen it could be more complicated for you with regards to an agricultural land. For a more precise understanding of the contents of the title deed, we recommend Part 1 of our series of articles on Hungarian Real Estates, which deals with the different parts of the title deed. 2. Download a copy of the map of the property. Why that could be useful? The copy of the map will show whether a structure (i.e. not only the plot but also the house as a building) has been recorded for the property registered under the given plot number. If the Real Property seems to be in fact substantially different, it is necessary to ask whether there has been an extension or addition (if so, whether they have a building permit, otherwise it may result in the demolition of the structure and a fine if it is in breach of the relevant local building regulations or, if not, to ensure that a permit for the building’s maintenance is obtained and the building is indicated). In the case of a possible loan application, the issue of building on/extension is also very important, as it can be a disadvantage in the valuation if it is not shown on the copy of the map. 3. Check local building regulations, heritage register: In several respects, it is important to be aware of the building regulations adopted by the local municipality. Why? If you intend to build an additional building on the site in the future, it is a good idea to find out in advance about the building regulations (e.g. building permit, building size, etc.). Regulations may vary from one municipality to another. Alternatively, if there was a previous building on the property for which the seller did not have a building permit, it may be important to check whether the building complied with the local building regulations. If the property has been built on but no occupancy or maintenance permit has been issued for the structure, the legal status of this should also be clarified. If the property you want to buy is listed in the heritage register, it is important to take into account the specific rules that apply to it. By entering the details of the property, you can easily check on this link whether the property is a heritage protected property at all. * * * If you are about to buy a property or if you have any problems with the title deeds or copies of maps and other legal requirements, please contact our office and ask us. We will assist you in the complete management of your real estate purchase and sale transaction (from making the purchase offer, preparing and submitting the contract to registering the title with the land registry), whether you are a private individual or a company. Authors: dr. Farkas Szabolcs László dr. Bajcsay
Real estate article series Part 2: How not to fall into a failure when buying a home?
We have looked at the property we want to buy, we have paid the purchase price […] everything seems to have gone well at first, but the land registry has refused to register our title or it turns out that there was a co-owner who had a pre-emption right who was failed to notified though? Could these issues be avoided with a due diligence procedure conducted prior to entering into an agreement? In Part 2 of our series of articles on Hungarian Real Estates, we will cover the basic legal aspects that you should be aware of when buying a home: 1: – whether the Real Property is registered as a „flat” – whether the floor area of the Real Property in m2 is in line with what was declared by the seller – the address in the Land Registry matches the address published in the advertisement – whether the actual owner of the Real Property is the person from whom we intend to buy the property – i.e. whether the seller and the owner are the same (it is possible that the Real Property may have more than one owner, in which case all owners must be listed as sellers in the contract of sale if we intend to buy the whole property) – whether there is any encumbrance on the property which restricts or prevents us from acquiring ownership (a typical example is a mortgage and the mortgage encumbrance that secures it) – flats are normally part of a condominium, which means in practice that the flat is a separate Real Property (condominium sub-unit) belonging to the condominium, usually marked …/A/1 in the plot number (the number of sub-units may vary depending on the number of flats in the condominium) – in the case of a condominium, there are two things to do: firstly, we need to obtain the title deed of the sub-unit (apartment) (this is called the condominium separate deed) and the title deed of the property on which the condominium building itself stands (this is called the condominium master deed), which is important because the condominium master deed and the separate deed together form the whole legal picture of the legal status of the condominium – if an encumbrance is registered on the title deed to the main deed of the condominium, it is treated as if it were also registered on the separate deed (i.e. the apartment) For a clearer understanding of the contents of the title deed, we recommend Part 1 of our property article series, which deals with the various parts of the title deed. 2. Obtain the articles of association, by-laws and rules of the condominium: Why is this good for us? The contents of the articles of association will tell us whether the other residents have a right of first refusal when buying the apartment in question, which is important to bear in mind when concluding the contract/offering to buy, because A Sale & Purchase Agreement concluded in breach of the right of first refusal is void against the right of first refusal holder and can therefore be enforced against us later if the right of first refusal is entered on the title deed of the condominium. In this case, the holder of the pre-emption right could validly take action against the ‘new’ owner and even replace him, depriving him of his ownership rights. From the deed it may also be important to clarify whether the flat has any other exclusive use premises (e.g. a cellar or storage room) or a parking place. Exceptionally, these may be registered as separate properties and the deed may contain other provisions for their purchase. An Organisational and Operational Regulation (OOP) basically defines the organisation and functioning of the condominium, and it is good to know the rules of this regulation when a condominium general meeting is held. And the rules of conduct themselves set out the rules of behaviour expected in a condominium (e.g. the conditions under which common areas can be used or the rules of coexistence that residents must observe). * * * If you are about to buy a property or if you have a problem with the interpretation of the title deed please contact our office and get in touch with us. We will assist you in the complete management of your property purchase transaction (from making the purchase offer, through the preparation and submission of the contract to the registration of the title in the land registry), whether it is a sale or purchase by a private individual or a company. Authors: dr. Farkas Szabolcs László dr. Bajcsay Gergely Please note that the general information provided in this article is for informational purposes only and does not constitute legal advice. We do not assume any liability for any misinterpretation of the above information or for any changes in the law that may have occurred in the meantime. If you have a specific question or legal problem, we are able to provide individual advice after consultation with our office and after a full investigation of the case.
Real estate article series Part 1: What is a title deed for? Do we need it as buyers or is it just of a waste of time to check that?
Are we 100% sure that the person introduced as a seller is the real owner of the property? Is there an unexpected beneficial owner or a mortgage, a lien, ongoing enforcement procedure or other encumbrance on the property that hinders you from buying it? Has the property been listed as a flat but is actually listed as office space? To prevent, detect or overcome these problems, as a potential buyer, it is recommended to obtain the title deed of your desired Real property before making an offer to buy. In Part 1 of this series of articles on Hungarian Real Estates, we will explain the structure of the title deed and what you need to know about them, whether you are selling, donating or in any other form transferring a property. By following the 3 simple steps outlined in this article, we can clarify our concerns about the property. So come on let’s go step by step! STEP 1: Request a title deed Hungarian individuals who has an Ügyfélkapu account can download a title deed free of charge 2 times a year on the Land Registry’s online site. From 01 January 2023, only e-certified title deeds will be available on a standard basis (for a fee of HUF 3,000 per property). All you need is access to a client portal (Ügyfélkapu) or you may ask your lawyer to do so for you. However, it is worth deciding whether you need a full title deed or just an extract of the title deed. While the latter only includes the current data, the full title deed gives you the „history” (background history) of the property, e.g. the current and previous owners and any charges. STEP 2: Checking the contents of the title deed Whatever type is the Real Property, the title deed is made up of three main parts (marked with a Roman numeral), so let’s see what exactly they contain: PART I sets out the general (numerical) details of the property: the name of the municipality, the exact address of the Real Property plot number, location of the territory of the property (site), which may be internal, external (outside of town) the (floor) area of the property in m2 the type of cultivation/designation (e.g. pasture, meadow, field, orchard, forest, etc. in the case of land, or uncultivated land, e.g. vacant land, road, dwelling house, farm building, etc., or condominium type e.g. flat, shop, garage, etc.) legal nature of the property (e.g. condominium, protected area, monument, etc.) in the case of a property classified as land, the quality class of the land, its area and its value in gold crowns (also known as cadastral net income) the extent of the land use right and easement over the property PART II defines the basic data of the owners of the Real Property: owner personal data (name at birth, mother’s name, year of birth, address) title of acquisition (e.g. purchase, gift or inheritance) ownership proportion/share of ownership (e.g. 1/1, or 1/4, etc.) – for each owner separately by serial number (e.g. II/1, II/2, etc.) date of registration of ownership, its file number PART III specifies the rights and facts or encumbrances affecting the property and the persons liable and entitled to them: registrable rights (most frequently occurring e.g. usufruct, mortgage, conduit, land use, execution, pre-emption, purchase, etc.) registrable facts (most common e.g. prohibition of alienation and encumbrance, sale with reservation of title, declaration of perfection, etc.) certain rights, e.g. mortgages and the corresponding prohibition on alienation and encumbrance, may not be transferred (e.g. sold or given away) or otherwise encumbered (e.g. usufruct or easement) without the consent of the holder STEP 3: Summary of the contents of the title deeds: In general, the most important thing to clarify from the contents of the title deed requested is whether the information in Part I corresponds to the information provided in the advertisement of the listed Real Property or by the seller, whether or not the seller himself is registered as the owner in Part II and whether or not there is any encumbrance in Part III which would in any way limit or prevent us as a buyer from acquiring the property free of encumbrances? * * * If you are about to purchase a property or have a problem with the interpretation of the title deed of the property, please contact our office and get in touch with us. We will assist you in the complete management of your property purchase transaction (from the making of the purchase offer, through the preparation and submission of the contract, to the registration of the title in the land registry), whether it is a sale or purchase by an individual or a company. Authors: dr. Farkas Szabolcs László dr. Bajcsay Gergely Please note that the general information provided in this article is for informational purposes only and does not constitute as a legal advice. We do not assume any liability for any misinterpretation of the above information or for any changes in the law that may have occurred in the meantime. If you have a specific question or legal problem, we are able to provide individual advice after consultation with our office and after a full investigation of the case.
Buying a Real Property in Hungary
Due to the increasing prices and rent fees Budapest and Hungary came into the spotlight of the foreign investors irrespective of the size of their investment. It is quite popular to buy a real property in the beautiful Budapest, however there are several key factors that should be taken into account before any step made forward. Proper Legal Support In Hungary in order to have the proper legal effect of your S&P agreement 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. Tipp No 1: Be careful if anyone advises you to enter into an agreement without any attorney or public notary. Legislation Regarding Foreign Buyers The government ordinance 251 of 2014 is the applicable legislation in case not a Hungarian citizen would like to buy a real property (the regulation of buying a siol differs from current case). Generally the approval of the competent Government Authority is required as a pre-requisite for the purchase. In case you are a citizen from a member EU state or from Norway, Lichtenstein, Island, Switzerland or you have a double citizenship including Hungarian or EU member state one than you do not have to apply for any previous approval from the Government Authority. Such approval process takes 45 days generally. Although it is in Hungarian this small description issued by the Government Authority can help you after some Google translation: http://www.kormanyhivatal.hu/download/7/e8/d4000/K%C3%BClf%C3%B6ldiek_ingatlanszerz%C3%A9se_taj%C3%A9koztat%C3%B3_2018.pdf What Should Be Checked as a First Step I highly advise to start with the up-to-date Land Registry extract since it should include the most of the important legal facts concerning the real property you choose as an investment target or dream flat. What to Focus on a Land Regsitry Extract It should also be checked if there is any mortgage, boundaries, pre-emption right, enforcement right or any other ban that hinders the purchase of the property registered on the extract. If any of those are registered on the extract you should discuss with your acting attorney how to handle those risks since those can be solved but should be considered and evaluated on a case by case manner. It should also be checked on the Land Registry extract if there is any registered usufruct since than it should be also paid off if you mean to buy a clean real property. All these matters can be reviewed and discussed with a well-prepared lawyer and that can ensure the safety of your purchase and reduce the possibility of negotiating for a real property which deal may waste your time due to its unsettled legal situation. On the other hand you may consider buying a new flat that is under construction, however that has also several risks and such case would also require a well-prepared attorney to avoid any step that may hinder you from purchasing your dream real property in Hungary. Renting out Your Real Property Nowadays it is quite common for the foreign investors to rent out their real property and use it as an investment. Nevertheless such action should be also legally prepared as a well-drafted contract may safeguard your interests only. Our law firm can support you not only in the process of buying a real property but to draft the proper contract for renting out and also through our partners we can help you to rent it out. 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. The Articles posted on present page are under the protection of copyright law thus any use of them without permission is banned.
5 Hints on How to Establish a Company in Hungary
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: https://www.e-cegjegyzek.hu/?index 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. The Articles posted on present page are under the protection of copyright law thus any use of them without permission is banned.