Entrepreneurship in Hungary

The required documents and qualifications for entrepreneurship in Hungary

Hungary is moving towards programs that are planned to boost its economy, and this way it has attracted the attention of the world to itself. An entrepreneur is someone who can turn business ideas and concepts into appropriate products or services that are needed by the society. Entrepreneurship is taught in universities around the world and these universities teach the students to manage new business models while evaluating and assessing the potential risks of business plans. Entrepreneurs typically work in large companies or start-ups. Applicants can start a business in Hungary through a process which is easier than in other European countries and takes less time. Some of the benefits of entrepreneurship in Hungary are:
• Hungary is like a gateway for the applicants to enter the European Union.
• Hungary has a stable economy.
• In Hungary people pay less tax compared to other European countries.
Hungary, and especially its capital Budapest, is a safe place for entrepreneurship and doing business. Citizens of EU countries and citizens of non-EU countries are eligible for company registration and entrepreneurship in Hungary if they have signed the European Economic Area agreement and also reside in Hungary. As you know, the rules and requirements that are required to register a company vary from country to country. The requirements for entrepreneurship in Hungary are as follows:
• Registration of tax number (must be done immediately)
• Registered address for the company (must be done within 8 days.)
• Opening a bank account (must be done within 8 days.)
• Accountant (since the beginning of their work in Hungary they must appoint an accountant. If their company has no activity.)

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Topics reviewed in this article:

• Types of entrepreneurship in Hungary
• How to start a business in Hungary?
• Getting a residence permit in Hungary by registering a company

Types of entrepreneurship in Hungary

There are four types of companies and entrepreneurship methods in Hungary that applicants can set up, they are explained here:

• Independent or private entrepreneur
• Business Association
• Branch office
• Office of Commercial Representation

Independent or private entrepreneur: Entrepreneurship in the independent or private sector has a very fast process and registration in this type of entrepreneurship is free. After the registration, applicants will be able to pursue their business within the prescribed framework. The financial accounts of private entrepreneurs must be cash-based.

Business Association: Applicants can establish five types of business association in Hungary. They must have at least 2 members and do not require initial capital.

• Unlimited participation (Kkt): Requires a minimum of two members and does not require initial capital. The partners have unlimited responsibilities and the company is run by the partners. Registration fee is 50,000 HUF.
• Limited Partnership (Bt): It needs at least two members and one partner. No minimum capital is required and the general partner manages the company.
• Limited Liability Companies (Kft): The minimum number of members is one and all members have limited liability. The minimum capital is 3,000,000 HUF and the company must have at least one CEO. If the number of employees is more than 200 people, the company will need a supervisory board.
• Private Limited Company (Zrt): Requires at least 2 members and 5,000,000 as the initial capital. The liability of shareholders is limited to their shares.
• Public limited company (Nyrt): Needs at least one member and the starting capital must be at least 20,000,000 HUF and a supervisory board

Branch Office: Every foreign company can establish a company in Hungary.

Commercial representative office: Does not need a registered legal personality in Hungary. The registration fee is 50,000 HUF and there are no specific administrative requirements and registration takes less than 15 days.

How to start a business in Hungary?

Entrepreneurship and small businesses are among the most important prerequisites for transformation of countries’ economies. The easiest way to start a business in Hungary as an entrepreneur is to:

• In the first step, the applicant must register in a notary public in order to set up an account and password.
• To register for entrepreneurship in Hungary and obtain a Hungarian start-up visa, you must have a tax number and a social security number.

The required information for registration:

• name
• Address
• mother’s name
• Citizenship
• Date of birth, country, city
• Business activity code
• Type of tax
• Tax number
• Social Security number

Getting a residence permit in Hungary by registering a company

According to the terms and conditions of Hungary, with the following conditions, a company can be established in Hungary and the applicant get a Hungarian start-up visa by registering a company. Consult with a lawyer and tax advisor about the company’s goals in order to optimize the legal and tax structure of the company

• Gathering the required information, preparing and checking the required documents for establishing the company
• Signing documents
• Opening an account and initial capital of the company
• Documents must be filed in court.
• The registration of the company is done by the court.
• The company registration process time is 5 to 6 weeks.

Entrepreneurs pay different fees depending on the type of the company they register. Hungary allows non-EU immigrants who migrate to Hungary through investment to get a temporary residence permit in Hungary for one year for a minimum investment of € 50,000. After 5 years of uninterrupted living in Hungary a permanent residence permit will be given to them, and after 8 years of living and also being fluent in the Hungarian, applicants can obtain Hungarian citizenship.