What is the role of a holding company in Hungary?
A holding company in Hungary is a legal structure that owns shares of other companies with the purpose of creating a corporate group. Basically, a holding company doesn’t have business activities like producing goods or providing services. Its role is to own other companies outstanding stock and operate through them.
What are the advantages of holding companies in Hungary?
A company created only for the purpose of purchasing shares in another company is called pure holding. This type of company in Hungary has several advantages and some of these are:
- it beneficiates from a special tax regime due to the numerous double tax treaties signed by Hungary;
- it beneficiates of the EU Parent Subsidiary provisions, etc.
The Hungarian holding regime
The Hungarian holding company tax regime represents the program that regulates the holding regime in Hungary. This program was introduced in 2006 and offers all the advantages that the customary holding locations do. Precisely, the Hungarian holding regime provides the following tax advantages:
- the profits realized after selling the subsidiaries are free of taxes;
- the profit distributions received from subsidiaries are fully exempt from corporate tax at the level of the holding company;
- no withholding tax is levied on the profit distributions made by the holding company to its own shareholders.
Moreover, the extensive network of double tax treaties signed by Hungary
ensures exemption from paying corporate income tax or any withholding taxes on dividends, interests or royalties or their minimization.
Opening a Hungarian holding company
The foreign investors interested in saving their profits realized by their subsidiaries in another country can set up a holding company
Our company registration agents in Hungary
can help you with more information about the tax regime for holding companies
in this country and can also provide you with complete legal support when opening this type of company