Legal Forms of Business, Minimum Capital, and Contributions
Hungarian regulations define four corporate forms that investors can use to conduct business in Hungary. Two other options are also available for investors to establish their presence in Hungary. All corporate forms can be established and operated by foreign owners and management.
The following corporate forms are available:
- Limited Liability Company (Kft.)
- Private and Public Limited Companies (Zrt., Nyrt.)
- Limited Partnership (Bt.)
- General Partnership (Kkt.)
Further options include commercial representation and branch offices.
Limited Liability Company (Kft.)
The minimum capital required to establish a Kft. is HUF 3,000,000. The liability of the members is limited to their contributions to the company’s share capital. Members are not liable for the company’s obligations unless otherwise stipulated by law. A Kft. can also be a single-member company (single-member Kft.).
Private and Public Limited Company (Rt.)
A limited company can operate in two forms:
- Private Limited Company (Zrt.): minimum share capital of HUF 5,000,000.
- Public Limited Company (Nyrt.): minimum share capital of HUF 20,000,000.
Shareholders’ liability is limited to the nominal or issue value of their shares. At least 30% of the initial capital must be provided upon incorporation.
Limited Partnership (Bt.)
A Bt. requires at least two partners: one general partner with unlimited liability for the company’s obligations, and one limited partner with limited liability.
General Partnership (Kkt.)
In a Kkt., the partners’ liability is joint and unlimited. There is no minimum capital requirement by law. All partners are entitled to represent the company unless otherwise specified in the articles of association.
Commercial Representation
The role of a commercial representation is limited to communication, advertising, and marketing, without conducting business activities.
Branch Office
A branch office can independently engage in business activities in Hungary.
Additional Information
Companies established and registered under Hungarian law are independent legal entities capable of assuming obligations and acquiring rights. Certain specific activities, such as founding a bank, require regulatory approval.
Company Registration
Company registration is mandatory in Hungary, and the process must be prepared and submitted by a lawyer registered in Hungary. The process is entirely electronic. A pre-company may commence operations after registration, but specific activities may require a license.
Shareholders and Executive Officers
The highest decision-making body of a limited company is the General Meeting, while in a Kft., it is the Members’ Meeting. Executive officers can be either Hungarian or foreign citizens, provided they meet the legal requirements.
Conflicts of Interest and Disqualification
An executive officer may not acquire an interest in another company engaged in the same activity. Failure to comply with conflict of interest and disqualification rules can result in legal consequences.
Other Regulatory Registrations
Newly established companies must register with several authorities, including the National Tax and Customs Administration and the local municipality.
Opening a Bank Account
After registration with the Court of Registry, the company must open a bank account within 15 days, which requires the personal presence of its representative.
Ready to Start Your Business in Hungary?
Contact EuTrustZone Group today to explore your options for company formation in Hungary. Our expert team is here to guide you through every step of the process, ensuring a smooth and successful setup. Don’t miss the opportunity to establish your business in one of Europe’s most dynamic markets. Reach out now and let’s get started!