Types of companies in Hungary

Updated on Friday 04th March 2016

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Legal entities in Hungary

 
The Companies Act makes it possible for residents and foreign investors to form several types of companies in Hungary. The following legal entities can be incorporated in Hungary:
 
- the limited liability company;
- the joint stock company;
- the general partnership;
- the limited partnership;
- the sole proprietorship;
- branches, representative offices
 
We invite you to watch a short presentation about the types of companies in Hungary:
 

 

The joint stock company and the limited liability company in Hungary

 
The joint stock company in Hungary (rt.) can be private (zrt.) if its shares are not listed to the public or public (nyrt.) if it is listed on the Stock Exchange. An important difference between the two also lies in the minimum share capital necessary at the incorporation: 5 million HUF for the private one and 20 million HUF for the public joint stock company. This company can be opened by one or more founders and a board of directors must oversee the actions of the company.
 
The limited liability company in Hungary (kft.) is suited for small and medium sized businesses. Shareholders bear limited liability, according to the amount invested in the capital of the company. This legal entity requires lower incorporation costs and a minimum share capital of 3 million HUF. Contributions can also be made in kind.
 
Depending on the types of business you perform in Hungary, you will need to obtain certain permits and licenses form the relevant authorities. Our experts can help you obtain these permits and can also assist you throughout the entire company registration procedure in Hungary.
 

Hungarian partnerships and sole proprietorships

 
Individuals who want to perform business activities together can form a general or limited partnership. The general partnership requires that all its members are jointly liable for the obligations of this business form. Like all partnerships in Hungary, it does not require a minimum share capital. The limited partnership allows only for some members to be fully liable, while other can have limited liability (according to the amount contributed to the capital, in cash or in kind).
 
A sole trader in Hungary is a natural person who has legal capacity but no legal personality and has registered his or her business with the Companies Register. The individual has full liability for the actions and obligations of the sole trader. This form of business may have only one member.
 
Investors looking to set up a company in Hungary can also incorporate a branch or a representative office. The branch is suited for foreign companies that want to open an office in Hungary and comply with the requirements for bearing full liability for the branch. Alternatively, a subsidiary can be formed in Hungary or, for different business purposes, companies can open a virtual office. Regardless of the chosen business form, both types of companies must be registered with the Hungarian Company Register.

There are several domains in which you can launch a business in Hungary and depending on the size of your future business we can help you choose one of the legal structures above. Before starting up, you should have an extensive knowledge about that sector you intend to activate in. For example, before opening a financial company it is recommended to take  finance training courses, which will help you understand better the domain and will bring you new professional acquaintances. 
 
For more details regarding the types of structures in Hungary or if you are in need of personalized consultancy, please feel free to contact our company registration specialists in Hungary
 

 

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