Hungarian company formation is quite quick: thanks to the simplified company registration procedure, your enterprise can be registered within a week of submitting the required documents. To make use of this quick procedure, the articles of association of your enterprise must follow a certain template. However, simplified company registration does not apply to every form of business. If time is an important concern, you should consider what kind of paperwork is required to form different types of companies.
Which business structure should you choose?
The main business structures in Hungary are Bt (limited partnership), Kft (limited liability company) and Zrt (private company limited by shares). Since the Hungarian and English terms are not completely equivalent, we will use the Hungarian names for the sake of clarity. Although simplified company registration applies to all of the above forms of business (provided that their articles of association follows the required template), Kft is the most popular business structure by far. The main reason for that is simplicity, especially for foreigners:
- A Kft can be established by just one person. Consequently, if you form the company remotely, only one set of authorizations will be needed. If you form the company personally, only you will need to visit Hungary. (By contrast, a Bt requires at least two members.)
- A Kft’s bank account needs be opened after the company registration has concluded. By contrast, a Zrt’s bank account needs to be opened before the company registration begins. Since bank account opening has become more time-consuming for foreigners, establishing your company first and opening a bank account later is a quicker solution. (If you would like to know more about opening a corporate bank account, stay tuned for our next article.)
How does ownership affect company registration?
You can be the owner of your Hungarian enterprise as a private individual or through your foreign business. Establishing a standalone company as a natural person is the quickest way of company registration in Hungary as it only requires a copy of your passport. Simplified company registration also applies to subsidiaries, although you will need to present the translated and attested documents of the parent company, and acquiring those may take time, thus making the procedure longer. However, you can form a standalone company, and then sell it to your foreign business, thus making it a subsidiary.
Branch offices and commercial representatives are outposts of a foreign enterprise. All of their expenses are financed by the parent company which assumes liability for them as well. However, simplified company registration does not apply to branch offices and commercial representatives, meaning that their registration can take up to 30 days. Therefore, they will not be the best choice if your main priority is setting up your Hungarian business quickly.
How to get started with company formation?
The team of Helpers Hungary has over fifteen years of experience with all kinds of company formations. With us, your company registration will be in good hands. We also offer a wide range of services to ensure that all your paperwork is taken care of while you focus on your business. You can ask for a consultation by calling our office on +36 1 317 8570, by e-mailing email@example.com or by filling in our contact form.