Introduction
Embarking on the journey of establishing a business in Hungary requires a meticulous understanding of the legal landscape, particularly governed by Act 4 of 2006 on Business Associations, commonly known as the Companies Act. This legislation harmonizes with EU standards, providing a familiar framework for both resident and non-resident individuals and entities looking to initiate business operations in Hungary.
Business Association Types Under the Companies Act
Hungarian law recognizes various business association types under the Companies Act, aligning with international norms. These include general partnerships, limited partnerships, limited liability companies, single member companies, and private limited companies. The choice of structure depends on the nature and scale of the business, each with its unique advantages and implications.
Founding a Business: Simplified Procedures
The streamlined process of founding a business in Hungary involves distinct steps aimed at ensuring efficiency and compliance. One noteworthy aspect is the simplified procedure for certain entities, such as limited liability companies and private companies limited by shares, facilitated by the inclusion of a template in the annex of the Company Procedures Act.
Step 1: Preparation of Corporate Documents
Engage a Hungarian attorney-at-law to draft and authenticate the constitutive document, a crucial step requiring the founders' signatures. The timeframe for completion is a minimum of one day, with costs varying based on the attorney's fees.
Step 2: Opening a Bank Account
Within one day, initiate the process of opening a bank account, with associated costs contingent upon the chosen bank.
Step 3: Registering the Company
Submission of the company's registration application to the Hungarian Court of Registry is a pivotal step. The "one-stop shop" feature expedites the process, integrating tax number and statistical code acquisition. While the simplified registration procedure takes one working hour, the standard process may extend to 15 working days.
Costs for registration differ, with limited partnerships incurring HUF 50,000, limited liability companies and private companies limited by shares at HUF 100,000, and public companies limited by shares at HUF 600,000.
Step 4: Registration with Authorities
Engage a legal representative to complete registrations with the Hungarian tax authority, municipality, chamber of commerce, and the Central Administration of National Pension Insurance, ensuring a seamless establishment process within one day at no additional cost.
Step 5: Data Provision on Employees
Once registered at the Client Gateway, employers must electronically submit employee-related data to the State tax authority.
Legal Requirements and Obligations
It is imperative to recognize that mere registration does not grant unrestricted business activities. Complying with various licensing requirements specific to activities is fundamental for legal operation. While some activities necessitate a simple report, others mandate premises or activity licenses.
Conclusion
Navigating the intricacies of establishing a business in Hungary demands strategic planning and adherence to legal protocols. By following the prescribed steps and understanding the nuances of Hungarian business law, entrepreneurs can pave the way for a successful venture in this dynamic European market. This comprehensive guide aims to equip you with the knowledge needed to navigate the complexities and embark on a journey of business success in Hungary.
