By the US GO EU Hungarian Team · Last updated July 13, 2026
9%
Corporate income tax — the lowest flat rate in the EU; combined with a maximum 2% local business tax, total effective rate is approximately 11%
1 day
Minimum registration time — a straightforward Kft can be approved within one business day after attorney submission to the Court of Registration
27%
Standard VAT rate — the highest in the EU; a critical pricing and compliance consideration for all Hungarian businesses
Why Americans Register Companies in Hungary
Hungary's 9% corporate tax rate is not a temporary incentive or a special regime — it is the standard statutory rate applied to all ordinary corporate profits, with no conditions, sunset clauses, or sector restrictions. For businesses generating meaningful profits, this rate produces a tax saving of 14 to 24 percentage points compared to the EU average, compounding significantly over time. Combined with a Local Business Tax of maximum 2%, the total effective rate on Hungarian corporate profits is approximately 11% — still among the lowest in any developed economy globally.
Beyond the tax rate, Hungary's location at the geographic heart of Europe — bordering Austria, Slovakia, Czech Republic, Romania, and Serbia — provides natural Central European reach. Budapest has emerged as a regional headquarters hub for multinationals seeking a lower-cost alternative to Vienna or Prague, with a highly educated, multilingual professional workforce and an established infrastructure for international business. The country is a NATO member with a stable institutional framework, and EU membership ensures rule of law and contractual enforceability.
Business StructuresWhich Entity Type Is Right for You?
Hungarian company law offers several structures. The Kft — Hungary's limited liability company — is the clear and universal choice for foreign entrepreneurs and American business owners. It provides limited liability, a manageable share capital requirement, and is the standard commercial form for businesses of all sizes operating in Hungary.
Most Popular★ Recommended for Americans
Limited Liability Company
Kft — Korlátolt Felelősségű Társaság
The standard choice for SMEs and all foreign entrepreneurs. Liability is limited to contributed capital. Requires mandatory attorney filing with the Court of Registration (Cégbíróság). Minimum share capital of HUF 3 million (approximately €7,500). Can be registered in as little as one business day. Eligible for Hungary's 9% flat corporate income tax rate.
Private Joint Stock
Private Joint-Stock Company
Zrt — Zártkörűen Működő Részvénytársaság
For larger businesses with more complex ownership structures. Shares are privately held and not publicly traded. Requires minimum share capital of HUF 5 million. More complex governance than a Kft, including a board of directors and supervisory board for larger companies. Can issue shares of different classes, making it suitable for venture-backed or complex shareholder arrangements.
Public Markets
Public Joint-Stock Company
Nyrt — Nyilvánosan Működő Részvénytársaság
For companies whose shares are publicly traded on the Budapest Stock Exchange or other exchanges. Requires minimum share capital of HUF 20 million and significantly more complex governance and disclosure requirements. Not suitable for most foreign company formations — the Kft is the appropriate structure for the overwhelming majority of American-owned businesses in Hungary.
Partnerships & Branch
Limited Partnership / Branch Office
Bt / Fióktelep
The Bt (Betéti Társaság) is a limited partnership requiring at least one general partner with unlimited liability and one limited partner. No minimum capital. The Branch Office (Fióktelep) allows a foreign company to operate in Hungary as an extension of the parent company. Both are used for specific purposes — the Kft remains the standard choice for independent foreign company formation.
Hungary's 9% Corporate Tax — and the 27% VAT Counterweight
Hungary's tax system presents a striking contrast: the lowest corporate income tax in the EU at 9%, combined with the highest standard VAT rate in the EU at 27%. For businesses focused on profit generation and reinvestment — particularly B2B businesses where VAT is largely a pass-through — the 9% CIT produces a genuine and significant financial advantage. For consumer-facing businesses with high-volume low-margin sales, the 27% VAT rate requires careful pricing modelling.
Hungary Tax — The EU's Most Asymmetric Rate Structure
Hungary Tax Framework
9%
Flat corporate income tax — the lowest rate in the EU; no bands, no surcharges, applied to all taxable profits of Hungarian companies
+2%
Maximum Local Business Tax (LBT) — set by each municipality on the adjusted tax base; brings total effective rate to approximately 11%
27%
Standard VAT rate — the highest in the EU; reduced rates of 18% and 5% apply to specific categories including food and medicines
Hungary uses the Hungarian forint (HUF) — it is an EU member but not a Eurozone member. FX conversion applies for euro-denominated transactions. Hungary has an active double taxation treaty with the United States, providing reduced withholding rates on dividends, interest, and royalties paid to US shareholders. Dividend withholding tax is 0% for non-resident corporate shareholders under Hungarian domestic law in many cases — a meaningful advantage for holding company structures. Non-EU companies without an EU establishment must appoint a Hungarian financial representative when registering for VAT — this representative is jointly and severally liable for the company's Hungarian tax obligations. Real-time online invoicing reporting (RTIR) is mandatory for all Hungarian companies above certain invoice thresholds.
⚠️ US Tax Obligations Apply to Hungarian Company Owners — and GILTI is the Critical Issue
US citizens and Green Card holders are taxed by the United States on worldwide income regardless of where their business is incorporated. Owning a Hungarian Kft creates US filing obligations — including FBAR reporting for Hungarian bank accounts over $10,000 and Controlled Foreign Corporation (CFC) reporting. Most critically: at 9%, Hungary's corporate tax rate is well below the GILTI high-tax exclusion threshold of 18.9%. This means undistributed profits of a Hungarian Kft held by an American owner are very likely to be included in your US taxable income annually under the GILTI rules — potentially eliminating a significant portion of Hungary's 9% tax advantage. This is the same structural issue as Estonia (0%) and Bulgaria (10%), but at a rate still well below the exclusion threshold. Engage a US-qualified international tax advisor with specific Hungary / US CFC experience before incorporating — this is the most important planning step for American owners of Hungarian companies.
How to Register a Company in Hungary
Hungary's Kft registration is unique in this series: a licensed Hungarian attorney is legally required to submit all registration documents. You cannot self-file. This mandatory attorney involvement makes the process more structured than some other EU jurisdictions, but also means a qualified local professional is managing every step — reducing risk of documentation errors. A straightforward Kft can be approved within one business day of submission.
1
Engage a Licensed Hungarian Attorney — This is Mandatory
Unlike every other country in this series, Hungarian law requires that all Kft registration documents be submitted to the Court of Registration (Cégbíróság) exclusively by a licensed Hungarian attorney (ügyvéd), who electronically signs and files the application. You cannot submit the registration yourself. This is the first and most important step — engage a Hungarian corporate attorney before any other preparation begins. The attorney will draft the founding documents, obtain your specimen signature, coordinate the bank account opening, and submit the complete application to the Cégbíróság.
Mandatory — attorney required
2
Choose Your Company Name
The company name must be unique in the Hungarian Company Register (Cégbíróság) and must be in Hungarian (or transliterable into Hungarian). The name must include the entity type designation — "Korlátolt Felelősségű Társaság" or "Kft" for a limited liability company. Your attorney will check name availability through the Cégbíróság database and assist with selecting a compliant name. Foreign company names can be used but must comply with Hungarian naming rules and include the entity type.
Hungarian name required
3
Draft the Founding Documents (Articles of Association)
Your attorney drafts the Articles of Association / Deed of Foundation — including the company's name, registered Hungarian address, business activities (using NACE codes), share capital, shareholders, and managing directors. All documents must be in Hungarian. Foreign documents — passports, identification, power of attorney — require certified Hungarian translation and may require an apostille. Your attorney will also prepare the specimen signature card (aláírási címpéldány), which must be countersigned by the attorney.
All documents in Hungarian
4
Open a Temporary Bank Account and Deposit Share Capital
Open a temporary dedicated bank account with a Hungarian bank and deposit the minimum share capital of HUF 3 million (approximately €7,500) before submitting the registration application. The bank issues a certificate (bankigazolás) confirming the deposit, which your attorney submits as part of the Cégbíróság application. Note that due to AML regulations, the physical presence of the company's representative is typically required for bank account opening in Hungary — plan for this step accordingly. A permanent corporate account replaces the temporary account within 15 days of receiving the tax number.
HUF 3M deposit + in-person banking
5
Attorney Files Registration with the Court of Registration (Cégbíróság)
Your attorney submits the complete registration application electronically to the Court of Registration (Cégbíróság) — signed with their digital attorney's signature. The application includes the signed Articles of Association, bank certificate of capital deposit, proof of registered office address, identification documents, specimen signature card, and certified translations of any foreign documents. For a standard Kft, the Cégbíróság issues the company registration number and enters the company into the Company Register typically within one business day. Complex cases may take 4 to 6 weeks.
1 business day (standard)
6
Obtain Tax Number and Register for VAT with NAV
After Cégbíróság registration, register the company with the National Tax and Customs Administration (NAV — Nemzeti Adó- és Vámhivatal) to obtain the Hungarian tax number (adószám). Companies making taxable supplies in Hungary must also register for VAT (ÁFA — Általános Forgalmi Adó). Non-EU companies without an EU establishment must register for VAT immediately upon making taxable supplies and must appoint a Hungarian financial representative (pénzügyi képviselő) who is jointly and severally liable for the company's VAT obligations. The standard Hungarian VAT rate is 27%.
Non-EU founders: financial rep. required
7
Open a Permanent Corporate Bank Account
Within 15 days of receiving your tax number (adószám), open a permanent corporate bank account in Hungary. The temporary account used for share capital deposit cannot serve as the permanent operational account. Required documents include the certificate of incorporation, Articles of Association, specimen signature, and identification of the company representative. Physical presence is typically required for permanent account opening due to AML regulations — factor this into your timeline if you are managing the process remotely.
Within 15 days of tax number
8
Register for Local Business Tax and Social Security (if applicable)
Register for Local Business Tax (LBT — helyi iparűzési adó) with the municipality where the company's registered office is located. The maximum LBT rate is 2% of the adjusted tax base (gross margin). If your company will hire employees, register as an employer with NAV for payroll taxes. Employer social contribution is 13% of gross wages; employee contributions total 18.5% (withheld by the employer). The flat personal income tax rate for employees is 15%.
LBT + payroll if hiring
What Does It Cost to Register a Company in Hungary?
Hungary's formation costs are moderate by EU standards. The mandatory attorney fees are the primary variable cost, alongside translation and apostille fees for foreign documents — both unavoidable requirements for non-resident founders. The HUF 3 million share capital deposit is the most significant upfront commitment, though it remains as company capital.
| Cost Item | Notes | Est. Amount |
|---|---|---|
| Attorney fees | Mandatory for all Kft registration submissions. Covers document drafting, electronic filing, and Cégbíróság representation. | €500–€1,500 |
| Court registration fee | Court fee for entry into the Company Register (Cégbíróság). Electronic filing is standard and included in the attorney's submission. | HUF 50,000 (~€130) |
| Minimum share capital (Kft) | HUF 3 million (~€7,500) must be deposited before registration. Remains as company capital — not a fee. In-person bank visit typically required. | HUF 3M (~€7,500) |
| Translation and apostille fees | All foreign documents (passports, foreign IDs, power of attorney) require certified Hungarian translation and often an apostille. Varies significantly by document volume. | €200–€600 |
| Registered office address | Every Hungarian company requires a registered address in Hungary. Virtual office and seat services are widely available in Budapest. | €300–€800/yr |
| Accounting & annual compliance | Annual financial statements, three tax returns (CIT, LBT, VAT), real-time invoice reporting. Hungarian accountancy fees are competitive. | €800–€2,500/yr |
Post-Registration Requirements
Hungarian companies face comprehensive ongoing compliance obligations. Notably, Hungary operates a mandatory real-time online invoice reporting system (RTIR — Adatszolgáltatás) requiring invoice data to be submitted to NAV in real time for transactions above certain thresholds. A Hungarian accountant is essential for non-resident owners.
Annual Financial Statements & Three Tax Returns
All Hungarian Kft companies must prepare annual financial statements and submit three separate annual tax returns: a corporate income tax return (társasági adó bevallás), a Local Business Tax return (helyi iparűzési adó bevallás), and a VAT return (ÁFA bevallás — monthly or quarterly depending on turnover). Annual accounts must be submitted to the Court of Registration and are publicly accessible. A statutory audit is required for companies exceeding certain size thresholds.
Corporate Governance — Managing Director (Ügyvezelő)
A Kft must have at least one managing director (ügyvezetõ), who is registered in the Company Register. The managing director can be a foreign national and is not required to reside in Hungary. The managing director bears personal responsibility for the company's legal and tax compliance. Changes to the managing director must be filed with the Cégbíróság through a Hungarian attorney within the prescribed timeframe.
Real-Time Invoice Reporting (RTIR)
Hungary requires mandatory real-time online invoice data reporting to NAV for all domestic B2B invoices above HUF 100,000 (approximately €250). Invoice data must be transmitted within five days of the invoice date (or immediately for electronic invoices). This system — one of the most advanced in the EU — requires compatible accounting software and a NAV-connected invoicing system. Your Hungarian accountant must set this up before the first invoice is issued.
Beneficial Ownership Register
Hungary maintains a central beneficial ownership register in line with EU AML directives. All companies must register their ultimate beneficial owners — individuals owning or controlling more than 25% of the company — and keep this information current. Beneficial ownership data is filed with the Company Register through your Hungarian attorney and must be updated within five days of any ownership change.
What Americans Should Know Before Registering in Hungary
The 9% CIT is real — but GILTI largely neutralises it for US owners without careful structuring
Hungary's 9% corporate tax rate is the headline — and it is entirely real. For non-US entrepreneurs, it produces an exceptional financial advantage over Western European alternatives. For Americans, however, the GILTI high-tax exclusion threshold is 18.9%, and Hungary's 9% rate falls well below it. This means undistributed profits of a Hungarian Kft owned by a US person are almost certainly included in the US owner's taxable income annually under the GILTI regime — adding approximately 10.5% US tax on top of Hungary's 9%, before treaty credits are applied. With careful structuring — including the right election choices, corporate interposition, and treaty credit optimisation — some of this can be mitigated. But the 9% headline rate should not be assumed to represent your total tax burden as an American owner without specific US cross-border tax planning. This is the most important caveat in this entire series of pages.
Attorney filing is non-negotiable — choose one with international client experience
Hungary's mandatory attorney filing requirement means your choice of Hungarian attorney is one of the most important decisions in the formation process. Attorneys vary significantly in their experience with international clients, their ability to communicate in English, their familiarity with the specific documentation requirements for non-resident founders (translations, apostilles, powers of attorney), and their relationships with Hungarian banks. Choose an attorney who has a track record of forming companies for non-resident non-EU founders — ask specifically about their experience with American-owned Kft formations and cross-border VAT registration.
Banking requires physical presence — plan for it in advance
Opening both the temporary share capital account and the permanent operational bank account in Hungary typically requires the physical presence of the company's representative due to Hungarian AML regulations. This is not always avoidable through power of attorney arrangements at all banks. If you are managing the formation remotely, you will need to plan at least one trip to Hungary — ideally timed to coincide with the temporary account opening (before registration) and the permanent account opening (within 15 days of receiving the tax number). Some banks are more flexible than others for non-resident founders — your attorney can advise on which institutions are most accessible for your specific situation.
The 27% VAT is the highest in the EU — model it carefully for consumer-facing businesses
Hungary's 27% standard VAT rate is not a theoretical concern — it directly affects pricing for any business selling to Hungarian end consumers or to non-VAT-registered buyers. For B2B businesses dealing exclusively with other VAT-registered companies, the VAT is largely a pass-through and the administrative overhead (especially with the RTIR real-time reporting system) is the primary impact. For consumer-facing businesses, a 27% VAT burden on gross receipts is among the heaviest in the EU. Model this carefully against your pricing strategy before committing to a Hungarian entity as your primary customer-facing structure.
The Hungarian Golden Visa programme may complement a business registration
Hungary has an active Golden Visa programme — the Guest Investor Visa — providing residency through qualifying investment in Hungarian real estate investment funds, residential property, or charitable donations. The thresholds start at €250,000. While company registration alone does not qualify for the Golden Visa, some investors combine a Hungarian Kft formation with a parallel Golden Visa investment to establish both a business presence and a residency pathway. See our Hungary Golden Visa guide for full details on the qualifying routes and current programme structure.
Registering a Hungarian Company Is Right for You If…
- →You want the EU's lowest corporate tax rate at 9% — and you have taken US cross-border tax advice confirming how to structure your ownership to manage GILTI exposure effectively.
- →You are targeting Central European markets and want a business base in a country bordering Austria, Slovakia, Czech Republic, Romania, and Serbia — with full EU single market access.
- →You operate a B2B or profit-focused business where VAT is largely pass-through and the 9% CIT rate on retained profits creates meaningful long-term savings compared to Western European alternatives.
- →You value a fast registration process — a well-prepared attorney-filed Kft application can receive Cégbíróság approval within one business day — and you are prepared for the mandatory attorney involvement and in-person banking requirements.
- →You are open to combining business registration with Hungary's Golden Visa programme as a pathway toward EU residency, using the Kft as the operational entity alongside a qualifying investment.
We work with trusted Hungarian corporate attorneys and accountants who specialise in company formation for non-EU nationals. From founding document preparation and mandatory attorney filing to temporary and permanent bank account setup, NAV tax registration, VAT compliance, real-time invoice reporting, and US cross-border tax coordination — we guide you through every step of Hungary's structured formation process.