Shelf Companies in Hungary

Accounting is a necessary component of any business activity and the way the financial documents are maintained and submitted must follow the rules of the Accounting Act. Our accountants in Hungary can assist all types of businesses in any accounting matter.

 

Of course, accountants can also prepare the financial statements, that must be prepared based on various characteristics of the company.  

 

 

Although the process of company formation in Hungary will be avoided when purchasing a shelf-company (also referred to as a ready-made company), there are still numerous aspects that investors should comply with.

 

It is true that the investors will be able to start their operations much faster than if they have opted to open a company in Hungary following the standard registration process, but this doesn’t mean that the procedure is completely simple. 

 

This is given by the fact that upon the purchase of the shelf company, the investor will have to sign specific documents. Upon the transfer of ownership, the new buyer must change specific aspects if this is necessary and, in specific cases, it is legally required.

 

For instance, the company must have a director, and the new owner must appoint a person to act as the director of the company.  

 

Then, he or she may want to change the objects of activity of the company. Any change that is brought to the original registration information has to be reported to the Hungarian registration authorities, in accordance with the applicable law.

 

The new owner also has the right to change the company’s business address to a new location. 

 

Please mind that an advantage of this company type is that the investors are no longer required to submit a minimum share capital, as the company is already incorporated with the required capital.

 

This can have a positive impact when starting a local company, as the start-up costs businessmen have to invest in a new business are relatively large. 

 

Given that the most important aspect involved in this procedure is signing the purchase agreement, it is highly recommended to be represented by local lawyers or by a team of specialists in company formation in Hungary.

 

Such specialists are qualified to oversee the entire process and, more importantly, to act on your behalf in the relation with the local institutions. 

 

Once the document is signed, the papers have to be submitted with the Hungarian Court of Registration, which will take notice on the new ownership of the company and any other changes that were brought to the company.

 

As a general rule, since the day when the documents were submitted, the modifications will be registered in a period of maximum 8 days. 

 

Foreign businessmen who want to open a company in Hungary by buying a shelf company must know that they do not have to be present in Hungary at the moment when the purchase is made.

 

The procedure can be completed outside Hungary as well, but in this case, a much more complex procedure must be started, in the sense that the purchase documents can be signed from overseas, but the presence of a notary will be required, who must notarize the respective papers. 

 

The advantage of a shelf company in Hungary is that it remained dormant since the moment when it was incorporated and evidence upon this will be provided to the new owner, who will have access to all the corporate documents issued throughout the years, since the moment of the incorporation. 

 

Certified documents regarding its incorporation, the lack of business activities and the lack of corporate debts will be provided to the new owner once the sale-purchase agreement is signed.

 

It is necessary to know that you will not need to complete other standard steps for company registration in Hungary, such as registering for VAT or opening a corporate bank account, as the shelf company already provides all these. 

 

However, the new owner of the company will still have to complete various formalities once the company becomes operational, such as:

 

1. registering the employees for social security if the company will have employees;
2. obtaining business permits in accordance with the new objects of activity of the company;
3. obtaining various licenses for a new business office;
4. another office premises (if necessary),etc. 

 

 

Regardless if you want to open a Hungarian company following the standard registration steps or if you want to buy a shelf company, all corporate structures in this country have the same tax liability (this can vary based on the company type).

 

However, for a limited liability company incorporated following the basic steps or for a limited liability company purchased as a shelf company there aren’t any tax differences. The basic taxes refer to the following: 

 

 

 

The most common legal entity available for a shelf company in Hungary is the limited liability company (LLC). This happens because the LLC is the most common business form that is selected for incorporation in Hungary. 

 

The LLC is a common way to start a business because it offers many advantages, and it is the most suitable legal entity designed to fit the needs of small and medium-sized companies.  

 

This company type offers many benefits, in terms of taxation, management, shareholding and many others and you can find out here some of the main advantages of this structure. 

 

Of course, our team of consultants in company formation in Hungary remains at your service for any additional information that you may need. 

 

In the list below, you can discover few of the main characteristics of this company type when it comes to its management: 

 

 

Another reason to purchase a shelf company in Hungary that is incorporated as an LLC is that the investor’s liability towards the company’s debts is limited to the capital contribution of that investor.

 

This one of the main advantages of this company type, as investors have limited liability while retaining all other benefits that can be obtained through the LLC. 

 

In comparison, for other company types investors can be held accountable for the company’s debts with their personal assets, and this can become a potential factor of risk when developing a business activity.  

 

Why choose Hungary as an investment destination? 

• • one of the most important economic activities in Hungary is automotive, accounting for 170,000 employees;
• • the country has an active workforce of 4,5 million persons (data measured for 2020);
• • when starting a business that will employ workforce, investors should know that they will need to pay EUR 470 as a minimum wage, while the average salary is of EUR 1,110 (calculated as a gross amount);
• • Hungary benefits from financial aid through the EU funds and a new call was open for the period of 2021-2027;
• • companies creating minimum 10 jobs related to research and development can qualify for certain subsidies. 

1. Austria;
2. Slovakia;
3. Ukraine;
4. Romania;
5. Serbia;
6. Croatia.