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Hungarian Company Formation

As one of the more recent inclusions to the European Union (EU), Hungary has a medium sized economy located in Central Europe. Nonresident and foreign investors seek European company formation for many different reasons, and Hungary is one of those few European countries which appeals to a wide range of business interests. Corporate tax strategies in Hungary were designed with the nonresident investor in mind, and provide a welcome escape from excessively high rates. In most cases, Hungarian company formation means a low Corporate Tax rate of between 10% and 16%. And any royalties paid to Hungarian corporations can actually be deducted from corporate profits, delivering a tax benefit not offered by many EU members.

Since Hungary is battling for business with much larger economies in some European countries, Hungarian business officials have created a rather lax regulatory atmosphere for those foreign business owners anxious for a better corporate climate. For instance, there are no corporate requirements dictating the need for local shareholders or directors. That means 100% nonresident or foreign ownership is possible in the many diverse Hungarian company formation entities. And according to Hungarian regulation, any dividends paid to business shareholders, either resident or nonresident, are absolutely free from taxation.

If speed is of paramount importance when you are seeking your European company formation, nowhere in the EU can you be up and running with your own VAT number faster than in Hungary. The right European company formation specialist has relationships with Hungarian business officials and accountants, and can put you in ownership of one of the more common company formation types with your own VAT number in just 24 hours, thanks to Hungary's business-friendly climate. And that is with exclusive ownership by non-Hungarian residents or foreign citizens, and without the need for any local signatory or director.

The most beneficial and most common Hungarian company formation types are a Limited Liability Company (KFT), a Company Limited by Shares (RT) and a Limited Partnership (BT). A KFT is a private limited company, and corporate liability is limited to the amount of capital paid. This is the most common form of company formation in Hungary, the easiest to set up, and can be owned by a holding company, a single individual or multiple partners. An RT is basically a hybrid stock company which can offer shares publicly or privately, and the shareholders benefit from a lack of liability for the company's operations. Finally, a BT requires no minimal share capital, and requires at least one general partner and one limited partner. The benefit for the limited partner is the requirement that he only be liable for up to the amount of the capital invested.

With a central European location and solid economy, a soft regulatory climate and advantageous tax atmosphere make Hungary the perfect destination for the overseas investor. 100% nonresident ownership and a host of corporation choices combined with the fastest VAT registration in Europe make Hungary a solid choice for any foreign investor seeking European company formation.