Being a country with low taxes and a stable economy, Hungary represents a very attractive country to set up a company, and the most preferred by foreign investors is the Hungarian KFT (Limited Liability Company). The incorporation period is rather short and it adds to other advantages offered by the Central European country.
Before applying for the Court of Registration, there are some preliminary activities to take. Two of the most common types of companies in Hungary are Limited liability and the joint stock company. The following procedure is related to the Hungarian LTD Company.
Exactly like in the case of a Singapore LLC, the Articles of Association represents the fundamental act in setting up a Limited Company in Hungary. The first step and document to put up a file for the registration is the denomination of the company. It must express the real activity object and the legal form of the company.
The Articles have to clearly provide the address of headquarter of the company. Other locations than headquarters represent operation units and branches. A Hungarian Limited Liability Company may have a sole partner. The subscribed capital must be included in the Articles, stating the monetary or non-monetary contributions and identification information about the members, name and residence and the signature specimen.
Next step is to open a bank account for the financial contribution of the founders. It is information requested for the setup of the Hungarian LTD.
Depending on the address of the company, this must be registered at a Court of Registration. For the limited liability company the application for the company register at the Court must contain a commercial license, documents of incorporation, of the address and the unique name, the activity and the type of the company. The file must also include the receipt of the bank account.
Through an online system, the Court registers the company with the State Tax Authority (for income taxes and VAT) and with the Statistical Office during the process of registration at the Hungarian Trade Registry.
Both the limited liability companies and the joint stock ones in Hungary have to register for Social Security through an application form, after obtaining the Trade Registry certificate.
To incorporate a Hungarian Limited Company from abroad, the managing board of the entity must assign an attorney to represent the company and complete the necessary steps of registration. All documents must have authenticated translations in Hungarian.