How to Open a Company in Hungary (2026 Guide for Expats)

Update check (2026-02-08)

Before you act, confirm the current VAT exemption threshold, minimum wage, payroll contribution rates, Kft rules (capital + TEÁOR’25), and immigration requirements with official sources or your accountant/lawyer. Rules change.

How to Open a Company in Hungary (2026 Guide for Expats)

If you want to open company in Hungary, Budapest is one of the most practical places to do it—fast registration, a familiar LLC-style structure, and a tax system that can be straightforward when you set it up correctly. The “gotchas” are predictable: picking the right business form, choosing the right TEÁOR’25 activity codes, making smart VAT decisions, and getting through bank AML/KYC as a non-resident.

This guide is a short, high-value, copy-paste-ready playbook for expats and long-stay visitors who want to launch properly—freelancers, consultants, e-commerce founders, small tech startups, and holding/asset owners.

TL;DR (save this)

• Most expats choose a Kft (Hungarian limited liability company).
• Core taxes to budget: 9% corporate tax, local business tax (HIPA) up to 2%, plus VAT and payroll if hiring.
• VAT basics: standard 27% (reduced 18%/5%). The VAT exemption threshold for 2026 is 20,000,000 HUF (if eligible).
• Payroll budgeting: employer 13% social contribution tax; employees typically pay 18.5% social security + 15% income tax withheld.
• Minimum wage (2026): 322,800 HUF/month (guaranteed minimum wage for qualified roles: 373,200 HUF/month).
• Company formation does not automatically grant residency—immigration is a separate process.

Why Budapest Works for Foreign Founders

Budapest attracts foreign founders for a simple reason: the setup is manageable and the ecosystem is used to expats. You’ll find plenty of bilingual accountants, corporate lawyers, seat/registered office providers, and co-working spaces—plus banks that regularly onboard foreign-owned businesses (even if onboarding can take time).

The city also works well as an EU base for:

• EU-wide B2B services (consulting, software, agencies)
• e-commerce (especially if you’re warehousing/fulfillment in the region)
• holding structures and ownership vehicles (when done with proper tax advice)

Reality check: the speed of “incorporation” is rarely the bottleneck. Your bottlenecks are usually documents + translations, VAT status choices, and bank KYC.

Step 1 — Choose the Right Business Form (Quick Decision Guide)

The common options

• Kft (LLC) — best all-around choice for most expats (limited liability, credible to clients, works for ecommerce/startups/holdings).
• Sole trader (egyéni vállalkozó) — can be great for low-risk freelancers who already have the right residency/work status. Unlimited liability; not ideal for riskier activities.
• Branch — used when a foreign corporation wants to operate directly in Hungary without a Hungarian subsidiary (often heavier documentation + bank complexity).
• Representative office — limited to non-revenue “liaison” activities (not a normal operating business).

Quick comparison

Rule of thumb: If you want limited liability, clean invoicing, easier client trust, and flexibility—choose Kft.

Step 2 — Understand the Kft Basics (What You Must Decide Upfront)

Before your lawyer can file anything, you’ll need these decisions:

1. Company name (and 2–3 backups)
2. Registered office (seat) in Hungary
3. Business activity codes (TEÁOR’25)
4. Share capital & ownership structure
5. Managing director(s) and representation rules

TEÁOR’25 matters (don’t wing this)

Hungary uses TEÁOR’25 activity codes (effective from 2025). Pick:

• one main activity (what you actually do)
• realistic secondary activities (don’t list 30 unrelated things)

Why it matters: banks, accountants, and sometimes VAT screening look at whether your activity list matches reality.

Kft minimum capital

A Kft has a minimum registered capital requirement of 3,000,000 HUF.

Practical note: even when legal rules allow flexibility, banks and partners tend to take you more seriously if the company looks properly funded and “real.”

Step 3 — The Real Kft Registration Process (Budapest Step-by-Step)

Typical timeline (realistic)

• Fast cases: ~1–5 business days after filing (when documents are perfect and simple)
• Most foreign-owner cases: 2–3 weeks end-to-end (because of translations, VAT choices, bank KYC)

3.1 Pre-formation checklist (do this first)

• Choose name(s)
• Choose TEÁOR’25 codes
• Choose registered office provider or lease
• Decide ownership + director(s)
• Prepare a short business summary (helps bank + VAT questions)
• If any foreign corporate shareholder exists: start documents early (extracts, apostille, translation)

3.2 Documents you’ll usually need (standard expat Kft)

Your lawyer will guide exact requirements, but expect:

• Articles/Deed of Foundation (often bilingual)
• Specimen signature(s) for director(s)
• Passport/ID details for owners/directors
• Registered office declaration/contract (seat service or lease)
• Ownership structure details (especially if multi-layered)
• If a shareholder is a foreign company: fresh registry extract + apostille + Hungarian translation

3.3 Lawyer’s role (mandatory)

In practice, you will use a Hungarian lawyer for incorporation filing and countersignature. Plan on a fixed-fee “incorporation package” or hourly work depending on complexity.

3.4 Court + tax + statistical registrations (what happens automatically)

Once filed, you’ll receive:

• Company registration number
• Hungarian tax number (used for most tax admin)
• Statistical registration number

3.5 Chamber registration (don’t miss this)

New businesses must register with the chamber and pay the annual 5,000 HUF contribution. Put it in your calendar.

Step 4 — Banking: How to Open a Hungarian Business Account as a Foreigner

This is where many expats get stuck.

What banks typically want (especially for non-residents)

• Company registration documents (fresh)
• Articles/Deed + specimen signature
• Proof of tax number
• Registered office proof
• Passports + address proof for UBOs and directors
• Ownership structure chart (who owns what, all layers)
• Sometimes: contracts/letters of intent, invoices, or a simple business plan
• For foreign entities in the structure: apostilled + Hungarian-translated documents

Timeline expectation

• Best case: a few days (simple resident structure, all docs ready)
• Non-resident / complex ownership: 2–4 weeks is common

Tip: Choose your bank early and ask for their “foreigner onboarding checklist” before you incorporate. It saves weeks.

Step 5 — Taxes You Must Budget (Hungary 2026 Snapshot)

This is the section that makes or breaks your plan. Don’t guess—model it.

5.1 Corporate income tax (CIT)

• Hungary’s headline corporate tax rate is 9% on the corporate tax base.

5.2 Local business tax (HIPA)

• Municipal tax in Hungary, typically modeled up to 2% in Budapest.
• It’s based on an adjusted revenue concept, not simply “profit.”
• High-turnover, low-margin businesses feel this the most (ecommerce, trading).

5.3 VAT (ÁFA)

• Standard VAT rate: 27%
• Reduced VAT rates: 18% and 5% (specific categories)

VAT exemption threshold (2026)

For eligible businesses established in Hungary, the VAT exemption (“alanyi adómentesség”) threshold for 2026 is 20,000,000 HUF annual revenue.

Important nuance (EU SMEs): EU-level rules now allow certain EU-established small businesses to access SME VAT exemptions cross-border under specific conditions. If you’re operating from another EU country and selling into Hungary, ask your accountant how the SME scheme applies to you.

5.4 Payroll taxes & contributions (if you hire)

Budget payroll as: gross salary + employer cost.

• Employer social contribution tax: 13% (on relevant base)
• Employee deductions commonly include:
  • 18.5% social security contribution
  • 15% personal income tax withheld (typical employment income)

5.5 Minimum wage (2026)

From 1 January 2026:

• Gross minimum wage: 322,800 HUF/month
• Guaranteed minimum wage (qualified roles): 373,200 HUF/month

If you’re planning hires, base your initial payroll model on these floors (then add market premiums for English-speaking roles).

Step 6 — Accounting & Compliance (Where Expats Often Slip)

Accounts must be kept “the Hungarian way”

Your accountant may speak English, but statutory bookkeeping and reporting must comply with Hungarian accounting rules and filings.

Audit threshold (good news for small companies)

For financial years starting in 2025, the audit exemption threshold increased—many small Kft’s won’t need a mandatory audit if they stay under the relevant turnover/headcount conditions (commonly referenced as 600M HUF turnover and ≤50 employees in the two-year test).

Invoicing & VAT reporting (don’t improvise)

Hungary is digitally strict. Set up invoicing with your accountant at the start—especially if you’re VAT registered.

Step 7 — Hiring Staff: Practical Rules (Quick Overview)

If you hire in Hungary, plan for:

• written employment contracts
• probation rules (commonly up to 3 months in standard cases)
• paid leave minimums
• monthly payroll reporting and payment deadlines

Most expat SMEs outsource payroll to their accountant. It’s worth it.

Step 8 — Residency Reality: Does a Company Get You a Permit?

No. Incorporating a company does not automatically grant residency in Hungary.

If you’re non-EU and want to live in Hungary via business, you typically need a separate residence permit route (often “gainful activity” / self-employment or owner-manager pathways). Immigration officers generally expect:

• proof your business is real (contracts, clients, invoices)
• proof income can support you
• accommodation and health coverage
• clean background checks

Plan immigration and business together from day one—don’t form a “paper company” and hope it works.

Budapest-Specific Tips (What Locals Do)

Registered office options

• Virtual office/seat service: commonly ~€50–€150/month depending on mail scanning, document delivery, meeting room access.
• Coworking + seat: often ~€150–€250/month for a combined package in central areas.

If you’re non-resident (or travel a lot), a reliable seat provider with fast scanning is worth every forint. Missing official letters is how small problems become big problems.

The “Avoid These” List: 12 Common Pitfalls

1. Treating incorporation like a “visa in a box”
2. Choosing random TEÁOR’25 codes that don’t match reality
3. Missing chamber registration and the 5,000 HUF fee
4. Budgeting only for CIT and forgetting HIPA
5. Picking VAT status without understanding consequences
6. Waiting until the last minute to start bank KYC
7. Having unclear ownership structures (banks hate this)
8. Underestimating payroll cost (gross + 13% employer)
9. Running “English-only accounting” without compliant filings
10. Ignoring audit/size thresholds as you grow
11. Over-broad activity lists that trigger extra questions
12. Starting regulated activities without checking permits/licensing

Copy-Paste Checklist (Use This Before You Incorporate)

• Decide: Kft vs sole trader vs branch
• Confirm your residency/work status (especially non-EU)
• Pick name + backups
• Pick TEÁOR’25 main + secondary activities
• Choose a registered office (seat) provider or lease
• Decide ownership, director(s), representation rules
• Confirm Kft capital plan (min 3,000,000 HUF)
• Prepare passports/IDs and address details for all UBOs/directors
• Collect foreign shareholder documents early (apostille + HU translation)
• Choose VAT approach (VAT registered vs exemption if eligible)
• Incorporate via lawyer and receive registration/tax/statistical numbers
• Register and pay chamber contribution (5,000 HUF)
• Start bank onboarding immediately (KYC pack + ownership chart)
• Hire an accountant and set up bookkeeping + invoicing
• If hiring: set up payroll + employment templates
• If immigration needed: build an evidence file (contracts, clients, income plan)

FAQ (open company in Hungary 2026)

1) Can I own 100% of a Hungarian company as a foreigner?
In most normal sectors, yes. Banks and some regulated industries may add extra requirements.

2) How much capital do I need for a Kft?
Minimum registered capital is 3,000,000 HUF.

3) How long does it take to register a Kft in Budapest?
Often a few business days after filing in simple cases, but foreign documents and bank KYC can extend the full process to a few weeks.

4) What is Hungary’s corporate tax rate?
Headline corporate income tax is 9% on the corporate tax base.

5) What VAT rates apply in Hungary?
Standard 27%, reduced 18% and 5% depending on goods/services.

6) What’s the VAT exemption threshold for 2026?
For eligible Hungary-established businesses: 20,000,000 HUF annual revenue (rules and eligibility matter).

7) How strict are Hungarian banks with foreigners?
Strict. Expect full UBO checks, ownership charts, and often extra supporting documents for non-resident owners.

8) What payroll costs should I budget?
Employer typically adds 13% on top of gross salary (plus admin). Employees have significant withholdings.

9) What is the minimum wage in Hungary (2026)?
322,800 HUF/month minimum wage; 373,200 HUF/month guaranteed minimum for qualified roles.

10) Does forming a company give me residency?
No. Immigration is separate and requires proof of real business activity and financial stability.