Hungary: a good option for companies and bank accounts. LAVECO

Hungarian corporate tax rate -10%

Type of company

Kft. – Limited Liabiliy Company

Similar to German GmbH

 Registration

1.Owners and Director sign formation documents in front of lawyer

2.Lawyer submits papers to court of registration electronically

3.Process takes approximately 1 week

Capital

• Initial capital: min. 3 000 000 HUF

• Must be paid up.

Owners

• Ownership set down in M&A

• No share certificates are issued

• Corporate owners allowed (including foreign companies)

Registered office

Each company must have a registered office.

Bank account

• Hungarian companies must open at least one bank account in Hungary within 15 days of registration

• Signatories must be present in person

• Can also open accounts abroad

Accounting

• New companies must register with the tax authorities

• Annual accounts must be filed by a qualified accountant

• They must also register for VAT

• They can apply for an EU VAT number at the same time

Auditing

Required if:

• The company turnover exceeds 300 000 000 HUF for two consecutive years

OR

• The company has more than 50 employees

Taxation

• 10% on profits up to 500 000 000 HUF approx. 1 600 000 EUR

• 19% on profits over 500 000 000 HUF

• + Local municipality tax – 2% on profits

• Dividends - 0% tax on incoming and outgoing dividends

• Intellectual property – 50% discount on taxation of intellectual property (5/9%)

Capital gains

• 10% up to 500 000 000 HUF

• 19% above 500 000 000 HUF

Interest

• 10% up to 500 000 000 HUF

• 19% above 500 000 000 HUF

Hungarian company – the advantages

• EU membership

• Low corporate tax

• EU VAT number can be obtained relatively easily

Hungarian company – the disadvantages

• Relatively high paid up capital

• Very high standard rate VAT

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