A shelf company in Hungary is an excellent option for foreign investors who do not want to register a new company in Hungary. These companies have already been incorporated but have been left dormant, meaning that they have no commercial activities but have all of the incorporation documents in order.

The only step you will need to make in order to be able to begin working through your Hungarian company is to change the ownership of the company to your name. This is a simple process and our experts in company formation in Hungary can help you complete the paperwork in the shortest amount of time possible.

What are the advantages of a shelf company in Hungary?

The main advantage of a shelf company in Hungary is that owners do not have to go through the company incorporation process and handle all the legal matters. Another benefit offered by shelf companies in Hungary is that the company is already established on the market and this gives it credibility and age. This can be particularly useful for creditors and biding on contracts. A shelf company has a registered address in Hungary and we can also provide other services that will be needed after the company has commenced its activities, like accounting.

What you should know on Hungarian shelf companies

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, who 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 registering the employees for social security if the company will have employees, obtaining business permits in accordance with the new objects of activity of the company, obtaining various licenses for a new business office or another office premises and others.

What is the tax liability of a shelf company in Hungary?

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 corporate tax in Hungary is charged at a rate of 9%;
• the VAT is charged at a standard rate of 27%;
• the Hungarian tax institutions also charge reduced VAT rates of 18% and 5%;
• the employment tax is charged at a rate of 15.5%;
• the land tax is charged at HUF 200 per square meter or at 3% of the value of the property.

Is a Hungarian shelf company right for you?

Hungary has a medium sized economy but nevertheless it is an important business destination among the Central European countries. Hungarian companies incorporated by foreign investors can be fully owned and controlled by their foreign directors. Shelf companies in Hungary can take the form of the most common business types used in the country, like limited liability companies. These types of companies have a variety of ages and names and investors can choose the one that best suits their business and commercial interests in Hungary.

Our team of specialists in company registration in Hungary offers you the possibility to purchase a ready-made company that has been incorporated recently in Hungary or that has a certain age and suits different business needs. Prices for shelf companies can vary according to numerous aspects. For detailed information about the ownership transfer and prices, please contact our team, where you will find the necessary support in opening a company in Hungary.

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Istvan Sinkovicz is our experienced company formation agent. He has helped numerous businessmen open companies in Budapest and in other Hungarian cities.

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Call us now at +36/306943931 to set up an appointment with our lawyers in Budapest, Hungary. Alternatively you can incorporate your company without traveling to Hungary.

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Articles

Shelf Companies in Hungary

What is a shelf company?

What are the advantages of a shelf company in Hungary?

What you should know on Hungarian shelf companies

What is the tax liability of a shelf company in Hungary?

Is a Hungarian shelf company right for you?

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