The most common types of companies in Hungary are KFT (Limited Company) and ZRT (Private Limited Company). The establishment procedure is the same as the general company establishment procedure; it will be completed by submitting the Articles of Association and Articles of Association to the Registry Court. The process can be completed within 8 business days in the case of a Merger & Acquisition; and within 2 weeks in the case of the acquisition of an existing company.
A central office must be located in Hungary. It is not possible to undertake banking, insurance or public financial services unless a special permit is granted by the National Bank.
Every company must prepare a complete annual Financial Statement in accordance with the Hungarian Accounting Standards by May 31st of each year. In addition, companies are required to file a Corporate Tax Return by May 31st of each year. The standard 9% corporate tax rate applied to worldwide income is taken as basis. In addition, the municipalities where the company is a taxpayer are entitled to levy a local business tax of up to 2% on the company's income. Most municipalities levy a local business tax, but there are some regions that do not levy a local business tax. Regarding double taxation, Hungary has tax agreements with more than 80 countries. Regarding VAT, the standard rate is 27%. There is a reduced VAT rate of 5% for certain food products and medicines, and 18% for restaurants, catering, hotel services, etc.
A company is not required to appoint an auditor if its annual net sales do not exceed HUF 300 million on the average of the two fiscal years preceding the fiscal year under review, and if the average number of people employed by the company does not exceed 50 on the average of the two fiscal years preceding the fiscal year under review.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
