Company Formation · Hungary

Set up a company in Hungary.

The lowest corporate tax rate in the European Union at 9%, the modern Kft vehicle with electronic registration in 1–3 business days, and a strategic Central European base — serving the entire CEE manufacturing and distribution corridor.

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9% Corporate Tax

10% KIVA SME Rate

1–3 Days Registration

EU Single Market

17 Years Founded 2009 · UK Reg. 11575770

100+ Jurisdictions Covered

40+ Senior Consultants Globally

20+ Sectors Served

48 Hours Quote Turnaround

At a Glance

Hungary — the essentials.

Capital

BudapestLargest city & commercial centre

Population

~9.6 millionEU member since 2004

Currency

Forint (HUF)Outside the Eurozone

Official Language

HungarianEnglish standard in international business

Time Zone

CET (UTC+1)CEST in summer

EU Status

EU 2004 · Schengen 2007Full single market access

Legal System

Civil lawContinental European tradition

Corporate Register

CégbíróságCourt of Registration · e-cegjegyzek.hu

Why Hungary

Six reasons clients choose Hungary.

The lowest headline corporate tax rate in the European Union, an electronic incorporation process measured in days, and a strategic Central European location at the centre of the CEE manufacturing corridor.

Lowest CIT in the EU

9% flat corporate income tax — the lowest headline rate in the European Union. Combined with local business tax (HIPA) of up to 2%, the realistic total burden lands in the 9–11% range. Genuinely competitive even after Pillar Two for SMEs.

KIVA: alternative SME regime

The Small Business Tax (KIVA) replaces 9% CIT plus 13% social contribution with a single 10% rate. Retained profits not taxed until distributed. 2026 thresholds doubled to <100 employees and HUF 6bn revenue/balance sheet. Best for service-heavy SMEs.

Heart of Central Europe

Excellent road, rail, and air connections to every major European market. Budapest sits within four hours' drive of Vienna, Bratislava, Belgrade, and Zagreb. The natural CEE base for manufacturing, distribution, and shared services operations.

Manufacturing powerhouse

BMW, Mercedes-Benz, Audi, Suzuki, and most major Tier 1 automotive suppliers operate Hungarian plants. World-class electronics, battery manufacturing, and pharmaceuticals clusters — backed by a deep engineering and technical workforce.

Electronic Kft incorporation in 1–3 days

Simplified Kft formation runs through the electronic Court of Registration in 1–3 business days. HUF 3,000,000 (~€7,500) minimum capital does not need to be deposited in a bank before incorporation — usable for operations from day one.

R&D and clean tech incentives

10% R&D tax credit, fully refundable in cash, capped at €25M–€55M depending on activity. New 2026 clean tech tax allowance: 70–100% deduction on qualifying green investments, capped at €30M. Real money on the table for innovation-led businesses.

Business Structures

Choose the right vehicle — six options.

Most international clients use the Kft for SMEs and foreign-owned subsidiaries, or the Zrt for larger setups. We will tell you straight which one fits your situation, and why.

Structure	Min. Capital	Liability	Best for	Formation
KftKorlátolt Felelõsségû Társaság · Limited Liability Company Most Used	HUF 3,000,000 ~€7,500 · no bank deposit required	Limited to share capital	The default choice for SMEs, foreign-owned subsidiaries, holdings, and start-ups. Modern, flexible, electronically registered in 1–3 days.	1–3 days
ZrtZártkörûen Mûködõ Részvénytársaság · Private Limited Company by Shares	HUF 5,000,000 ~€12,500 fully paid	Limited to share capital	Larger businesses requiring formal share-based governance. Suited to mid-market companies, regulated industries, and JV structures.	2–4 weeks
NyrtNyilvánosan Mûködõ Részvénytársaság · Public Limited Company	HUF 20,000,000 ~€50,000	Limited to share capital	IPO-track companies and listed entities with publicly traded shares. Heavier governance and disclosure requirements.	4–8 weeks
BtBetéti Társaság · Limited Partnership	None	Mixed (general / limited)	Investor / operator structures where general partners manage and limited partners provide capital with capped liability.	1–2 weeks
KktKözkereseti Társaság · General Partnership	None	Unlimited, joint & several	Two or more partners running an active business together; small partnerships with shared risk and management.	1–2 weeks
BranchFióktelep · Branch of foreign company	None	Parent company liable	Foreign-headquartered groups establishing local presence without separate legal entity. Faster to set up; parent carries direct liability.	2–4 weeks

Tax & Compliance

The numbers that matter.

Headline figures every founder, finance director or international operator should know before they incorporate.

Corporate Tax

Flat 9% rate — the lowest headline rate in the EU. Applies to AE, IKE-equivalent, partnership, and branch structures keeping double-entry books. Genuinely competitive even after Pillar Two for SMEs.

10%

KIVA SME Tax

Small Business Tax replaces 9% CIT plus 13% szocho with a single 10% rate. 2026 thresholds doubled to <100 employees, HUF 6bn revenue/balance sheet (~€15.4M). Best for service-heavy SMEs.

27%

VAT (Standard)

The highest standard VAT rate in the EU. Reduced rates of 18% (food, hotels) and 5% (medicines, books, district heating, new homes). Mandatory registration above HUF 20M turnover.

2% max

HIPA Local Business Tax

Municipal business tax up to 2% on net sales revenue (not profit). Set by local council; Budapest typically charges the full 2%. Plus innovation contribution 0.3%. KIVA filers can use 120% of KIVA base instead.

10%

R&D Tax Credit

10% of qualifying R&D costs as a tax credit, fully refundable in cash. Capped at €55M / €35M / €25M depending on activity type. Material money on the table for innovation-led businesses.

100%

Participation Exemption

Capital gains on reported shareholdings exempt if held at least 1 year. Combined with the 9% CIT base rate, makes Hungary credible as a holding location for CEE and EU group structures.

70–100%

Clean Tech (NEW 2026)

New 2026 tax allowance: 70–100% base deduction on qualifying green investments — renewables, energy efficiency, circular economy. Capped at €30M per project.

15%

Personal Income Tax

Flat 15% on personal income — one of the lowest in the EU. Plus 18.5% employee social security and 13% employer szocho on gross wages. Under-25s exempt from PIT up to gross national average.

Pillar Two minimum tax: Hungary has implemented the OECD/EU 15% global minimum effective tax for multinational groups with consolidated turnover above €750 million from 30 June 2026, via the Income Inclusion Rule, Undertaxed Profits Rule, and a domestic top-up tax (QDMTT). Most SMEs and growth-stage businesses are not in scope.

Formation Process

From decision to trading entity.

A realistic seven-step path. A simplified Kft can be electronically registered in 1–3 business days; including bank account opening and full tax setup, most international clients are operational within 2–4 weeks.

Discovery & structure design

Confirm the right vehicle (Kft, Zrt, Bt, Kkt, branch), shareholding, directorships, registered office location, and tax position. Assess KIVA eligibility against 2026 thresholds (<100 employees, <HUF 6bn revenue/balance sheet).

Week 1

Articles drafting

Articles of Association (Társasági szerzõdés) drafted — in Hungarian for filing, with English translation for foreign shareholders. Specifies share structure, governance, directorship, and registered seat.

Week 1–2

Counter-signature

Articles counter-signed by a Hungarian attorney (ügyvéd) or notary public — mandatory for registration. The attorney handles electronic submission and can act as registered agent for the company.

Week 2

Cégbíróság registration

Electronic filing with the Court of Registration via e-cegjegyzek.hu. Simplified Kft procedure completes in 1–3 business days. Company receives its registration number (cégjegyzékszám) and tax number (adószám).

Week 2

NAV tax & VAT registration

Tax number assigned automatically at registration. VAT (ÁFA) registration with NAV (Nemzeti Adó- és Vámhivatal), including the EU VAT-ID for cross-border trade. KIVA election filed if applicable.

Week 2–3

Bank account & MKIK Chamber

Hungarian bank account opened — the longest single step for international clients. For a Zrt, share capital paid in. Mandatory MKIK (Hungarian Chamber of Commerce) enrollment within 5 working days; HUF 5,000 annual fee.

Week 2–4

Social security, HIPA & licences

NAV social security registration if hiring (employer szocho 13%, employee 18.5%). HIPA filing with the local municipality. Sector-specific licences via HIPA agency (Hungarian Investment Promotion Agency) where applicable.

Week 3–4

What We Handle

A single partner. End to end.

You get one senior point of contact at Grant & Graham. Behind that, a vetted local network of notaries, banks, accountants, and lawyers we have worked with for years.

01 · ADVISORY

Structure & tax design

Choosing the right vehicle (Kft, Zrt, Bt, Kkt, branch), shareholding, registered office, and tax position. KIVA vs CIT modelling at the structure design stage when the business profile suggests it.

02 · LEGAL

Articles & counter-signature

Drafting Articles of Association (Társasági szerzõdés) in Hungarian and English, attorney counter-signature, and electronic submission to the Court of Registration via e-cegjegyzek.hu.

03 · FILING

Cégbíróság & NAV registration

Court of Registration filing, NAV tax/VAT registration, EU VAT-ID, KIVA election where applicable, MKIK Chamber enrollment, UBO Register, and ongoing compliance filings.

04 · BANKING

Bank account introduction

Direct introductions to leading Hungarian and international banks operating in Hungary. We compress account-opening timelines for foreign clients and coordinate KYC documentation upfront.

05 · FINANCE

Accounting & tax filings

Bookkeeping, payroll, monthly VAT returns, annual financial statements, corporate tax returns, HIPA municipal filings, and CIT advance payments through our partner accountants in Budapest.

06 · PEOPLE

HR, employment & relocation

Employment contracts under the Munka Törvénykönyve, NAV social security registration, work permit and Single Permit support for non-EU hires, and relocation packages for senior staff.

Best Fit When…

Hungary is the right answer for specific situations.

Not the right fit for B2C consumer businesses bothered by the 27% VAT, and not for businesses that need euro-denominated balance sheets. The right call when one of these scenarios applies.

You want the lowest CIT rate in the EU

9% headline corporate tax, with effective burden landing in the 9–11% range after local HIPA. The most competitive rate available within the EU single market for substantive operating businesses.

You run a service-heavy SME (KIVA fit)

If your costs are mostly salaries and you reinvest profit, KIVA at 10% replaces CIT plus 13% szocho with one tax. 2026 thresholds doubled: <100 employees, HUF 6bn revenue. Best fit for IT, consulting, legal, healthcare, accounting firms.

You are a manufacturing or automotive operation

BMW, Mercedes-Benz, Audi, Suzuki, and most major Tier 1 suppliers operate Hungarian plants. Battery and EV ecosystem expanding rapidly. Deep engineering workforce, mature industrial corridor, strong logistics infrastructure.

You need a CEE distribution hub

Budapest sits within four hours of Vienna, Bratislava, Belgrade, and Zagreb. Excellent road, rail, and air connectivity to Western Europe and the Balkans. Natural distribution and shared services centre for the wider region.

You are R&D or clean tech intensive

10% R&D credit refundable in cash (capped €25M–€55M) and the new 2026 clean tech allowance (70–100% deduction, capped €30M) put real money on the table. Combined with 9% CIT, exceptionally favourable for innovation-led businesses.

You are building a CEE holding structure

9% CIT, participation exemption on shareholdings held ≥1 year, no withholding tax on dividends paid to corporate shareholders. Combined with the EU passport, makes Hungary credible as a holding location for CEE and EU group structures.

Cost & Timeline Planner

Get an estimate in 30 seconds.

Three quick questions. We will give you a realistic cost range and timeline for your situation, and route the answers straight into a fixed-price quote request.

Step 1 of 3

01 · Structure

Which company structure are you considering?

02 · Setup

How is the shareholding structured?

03 · Services

What do you need from us?

Estimated for your situation

All-in cost (one-off)

—

Timeline to operational

—

Recommended structure

—

Get this as a fixed-price quote →

Estimate only. Final quote depends on specific scope, sector requirements, and any sector-specific licences. Includes Hungarian attorney counter-signature, Cégbíróság registration, NAV tax/VAT registration, MKIK Chamber enrollment, and Grant & Graham senior advisory at €250/hour.

Frequently Asked

The questions we get asked most.

How long does it take to set up a Kft in Hungary?

A simplified Kft can be electronically registered in 1–3 business days through the Court of Registration (e-cegjegyzek.hu). Including the bank account opening (typically the longest step for international clients) and full NAV tax/VAT setup, most foreign clients are operational within 2–4 weeks. A Zrt or Nyrt typically runs to 4–8 weeks given the heavier capital and governance requirements.

Do I really need to deposit HUF 3 million for a Kft?

Yes, the minimum capital is HUF 3,000,000 (~€7,500), but it does NOT need to be deposited in a bank account before incorporation. The capital can be used for normal business operations from day one — the legal requirement is satisfied by the founders' undertaking to subscribe the capital, recorded in the Articles. This is a major practical advantage over jurisdictions that lock up the capital pre-registration.

Should we choose KIVA or standard CIT?

KIVA replaces 9% CIT plus 13% szocho with a single 10% rate, calculated mainly on personnel payments and approved dividends. It is best for service-heavy SMEs where most costs are salaries: IT, consulting, legal, healthcare, accounting firms. 2026 entry threshold is <100 employees plus <HUF 6bn revenue and balance sheet. CIT is generally better for capital-intensive businesses, businesses with high non-salary costs, or those that retain rather than distribute profits. We model both at the structure design stage.

Do shareholders or directors need to be Hungarian or EU residents?

No. Foreign nationals and non-EU residents can be both shareholders and directors of a Hungarian Kft, Zrt, or branch. There is no nationality or residency requirement. For a smooth bank account opening and a credible local presence, having at least one director with EU presence is helpful. The registered office and a local tax representative are required.

What is HIPA (the local business tax)?

HIPA (helyi ipárűzési adó) is a local business tax levied by the municipality where the company is registered. The rate is set locally up to a legal maximum of 2% on adjusted net sales revenue (not profit). Budapest typically charges the full 2%. Smaller municipalities sometimes charge 0–1%, which can materially affect the realistic total tax burden. Confusingly, HIPA is also the acronym for the Hungarian Investment Promotion Agency — different organisation entirely.

What ongoing compliance does a Hungarian company face?

Annual financial statements filed with the Court of Registration, an annual corporate income tax return, monthly or quarterly VAT returns, monthly NAV social security filings if employing staff, twice-yearly HIPA advance payments to the municipality, monthly CIT advance payments where prior-year liability exceeds HUF 20M (quarterly otherwise), and the annual MKIK Chamber fee of HUF 5,000. We package this as an ongoing service for international clients.

How They Compare

Hungary vs Bulgaria vs Romania.

The three lowest-CIT EU jurisdictions clients most often weigh up. A side-by-side comparison on the numbers that actually matter.

	Hungary	Bulgaria	Romania
Primary Vehicle	KftZrt for larger setups	OODEOOD for single shareholder	SRLSA for larger setups
Min. Share Capital	HUF 3M (~€7,500)No bank deposit required	BGN 2 (~€1)Effectively zero	NoneNo statutory minimum since 2020
Corporate Tax	9% (+~2% HIPA)Lowest CIT in EU; effective ~9–11%	10%Flat, no local surcharge	16%Or 1–3% micro-company regime
Formation Time	1–3 daysSimplified Kft via electronic court	1–2 weeksAmong fastest in EU	2–3 weeksNotary required
Standout Feature	KIVA SME alt + R&D10% blended for service SMEs; 10% R&D credit refundable	Lowest CIT in EU (flat)No HIPA-equivalent local tax	Micro-company 1–3%Up to €100k turnover; flat 16% otherwise
Best Fit	Manufacturing, automotive, R&D-led, CEE distribution hub	Holding companies, low-cost back office, IT outsourcing	BPO, IT services, EU funding access, large CEE market
Watch Out For	27% VAT (highest in EU)Plus HUF currency exposure outside Eurozone	BGN currency & substance rulesReal economic presence required	Frequent fiscal changeMicro-company thresholds tightened repeatedly

Comparison data verified April 2026. Tax rates are headline figures — effective burdens vary by deductions, allowances, and structure. We can model the right answer for your situation in 48 hours.

Other Jurisdictions

Hungary is one of 100+ markets we cover.

If Hungary is not the right answer for your situation, here are the markets clients most often consider alongside it.

View all 100+ jurisdictions →

Start the Conversation

Ready to set up in Hungary?

Tell us what you are trying to do and we will come back inside 48 hours with a fixed-price quote and timeline. No pressure to commit — just a clear answer from a senior adviser.

Start a formation → uk@grant-graham.co.uk