Hungary has emerged as a strategic gateway for foreign investors seeking access to both Central and Western Europe. A preferred vehicle for doing business is the Korlátolt Felelősségű Társaság, commonly abbreviated as Kft., Hungary’s equivalent of a limited liability company. From its competitive tax regime to EU-member benefits, forming a Kft. is a streamlined and cost-effective way to launch or expand business operations.
At Damalion, we help international investors register their Hungarian Kft., secure local directorships, and open corporate bank accounts with trusted Hungarian banking partners.
Why Choose a Hungarian Kft.?
A Korlátolt Felelősségű Társaság is the most popular legal form for both Hungarian entrepreneurs and foreign investors. It offers limited liability protection, operational flexibility, and straightforward administration.
Under Act V of 2013 on the Civil Code (Ptk.), the legal basis for a Kft. is outlined in detail, including rules on formation, governance, capital contributions, and member rights.
Key advantages:
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Low share capital: Only HUF 3,000,000 (~€7,600) required.
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Fast incorporation: 5 to 10 business days with a simplified procedure.
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Full foreign ownership is permitted.
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No local director requirement, though a local representative may be advisable.
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Hungary is a member of the EU, OECD, and Schengen Area, ensuring regulatory harmonization.
Corporate Tax Regime
Hungary boasts one of the most attractive corporate tax rates in Europe:
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Corporate Income Tax (Társasági Adó): 9% flat rate – the lowest in the EU.
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Local Business Tax (Helyi Iparűzési Adó): Up to 2%, depending on the municipality. For example, in Budapest, the full 2% applies.
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Innovation Contribution (Innovációs járulék): An additional 0.3% may apply to certain companies with significant turnover.
These rates combine to an effective tax burden of 11.3%, which remains highly competitive in the European context.
Taxation on Dividend Distribution by Hungarian LLC (Korlátolt Felelősségű Társaság)
Dividends distributed by a Hungarian Kft. are subject to withholding taxes and social contributions, depending on the tax residency of the shareholders:
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To Hungarian resident individuals:
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15% Personal Income Tax (Szja) on dividends
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13% Social Contribution Tax (Szocho), unless the recipient reaches the annual contribution cap (24x the minimum wage)
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To non-residents:
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Subject to double tax treaty provisions.
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Many treaties reduce or eliminate the withholding tax entirely.
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Hungary has signed over 80 double tax treaties, including with the US, Germany, France, and the UK, offering opportunities to structure cross-border investments efficiently.
VAT Regime (Általános Forgalmi Adó – ÁFA)
Hungary applies a standard VAT rate of 27%, the highest in the EU, with reduced rates of:
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18% on certain food products, accommodation services, and internet services
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5% on pharmaceuticals, books, newspapers, and some housing construction
A Hungarian Kft. must register for VAT if its taxable turnover exceeds HUF 12 million (~€30,400) annually. Non-resident companies without a Hungarian establishment can also voluntarily register for VAT.
The Hungarian Tax Authority (NAV – Nemzeti Adó- és Vámhivatal) mandates real-time invoice reporting via the Online Számla system for transparency and compliance.
Other Key Compliance Aspects
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Annual financial statements must be filed in Hungarian with the Company Registry.
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Statutory audit is required if the company exceeds HUF 300 million (~€760,000) in annual revenue or employs more than 50 people.
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All Hungarian Kft. must have a registered office address (székhely) in Hungary.
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Corporate documents and filings must be in Hungarian or officially translated.
Bank Account Opening: Damalion Facilitates It
Opening a corporate bank account in Hungary requires:
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Valid corporate documents
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Identification of directors and beneficial owners
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Proof of registered address
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KYC/AML compliance
Some banks require in-person visits, while others may permit remote onboarding. Damalion provides introductions to selected Hungarian banks, ensuring smoother processing and compliance readiness. Our network includes traditional banks and fintech institutions able to support EUR and HUF-denominated accounts, online banking, and card issuance.
Why Work with Damalion?
We assist clients from company registration to operational setup:
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Drafting and translation of founding documents in Hungarian
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Legal representation and coordination with notaries and the Court of Registration
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Selection of business premises and registered address services
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VAT and tax number registration with NAV
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Assistance with local director appointment (if required)
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Bank account introduction and post-incorporation support
Our solutions are tailored for international entrepreneurs, holding companies, ecommerce sellers, exporters, and service providers looking to operate within the European Union.
Hungary’s Korlátolt Felelősségű Társaság (Kft.) combines flexibility, low taxation, and EU market access. Its simplified setup procedure and favorable tax treatment make it an excellent option for foreign investors seeking efficient company formation in Central Europe.
If you’re looking to register a Hungarian Kft. and want a trusted partner to guide you through every step – from legal formation to opening a corporate bank account – Damalion is here to help.
Contact your Damalion expert today to start your Hungarian expansion journey.
10 Best Hotels in Hungary for Your 24-Hour Business Trip
If you’re flying into Hungary for a tight 24-hour business trip, you need speed, comfort, and business-ready services. These top hotels in Budapest deliver all that—plus location advantages near transport hubs and business districts.
1. Four Seasons Hotel Gresham Palace Budapest (Four Seasons Gresham-palota Budapest)
A landmark of Art Nouveau elegance overlooking the Danube, offering executive meeting rooms, fine dining, and premium service for high-level business stays.
2. Kempinski Hotel Corvinus Budapest (Kempinski Corvinus Szálloda Budapest)
Located near Erzsébet tér, this luxury hotel features MICE facilities, a top-tier business center, and signature culinary experiences.
3. Corinthia Hotel Budapest (Corinthia Szálloda Budapest)
A historic grand hotel with contemporary meeting infrastructure, wellness center, and direct access to major city arteries.
4. Hilton Budapest (Hilton Szálloda Budapest)
Nestled in the UNESCO-listed Castle District, this hotel offers stunning views, meeting rooms, and an executive lounge.
5. Anantara New York Palace Budapest (Anantara New York-palota Budapest)
Luxurious interiors, a legendary café, and expansive event spaces make it a favorite for business executives and corporate delegations.
6. Aria Hotel Budapest (Aria Szálloda Budapest)
A boutique hotel by St. Stephen’s Basilica featuring musical themes, a rooftop bar, spa services, and a private boardroom.
7. Hotel Clark Budapest (Clark Szálloda Budapest)
Modern, adults-only hotel overlooking the Chain Bridge, offering smart interiors, a rooftop bar, and quick check-in—ideal for short business stays.
8. Kozmo Hotel Suites & Spa (Kozmo Lakosztályok és Gyógyfürdő Budapest)
Quietly located near the Grand Boulevard, this boutique-style hotel provides oversized suites, wellness, and ideal work-life balance.
9. Hotel Moments Budapest (Moments Szálloda Budapest)
Located on the elegant Andrássy út, with a cozy business corner, fast Wi-Fi, and easy metro access—perfect for efficient city meetings.
10. InterContinental Budapest (InterContinental Szálloda Budapest)
Trusted global brand with large meeting spaces, Danube views, and a location near key business and government buildings.
