Doing business in Hungary

Hungary is a unitary parliamentary republic with a codified civil-law system; company law sits in the 2013 Civil Code. Companies are registered electronically with the Court of Registration through a legal representative. Tax and customs are administered by the National Tax and Customs Administration (NAV), the Magyar Nemzeti Bank is both central bank and financial supervisor, the Competition Authority (GVH) handles merger control and NAIH enforces data protection. EU rules on customs, capital movement and data protection apply.

Key facts

Corporate income tax

9%, plus local business tax up to 2%

VAT

27% standard; 18% and 5% reduced

Main entity form

Kft, minimum capital HUF 3 million

Foreign investment

Ministerial approval in strategic sectors, sometimes including EU investors

Currency and capital flows

Hungarian forint (HUF); no exchange controls

Data protection

GDPR and Information Act; NAIH

New York Convention

Party

Withholding tax

None on dividends, interest or royalties to foreign companies

Foreign investors in Hungary usually set up a limited liability company (Kft), a private company limited by shares (Zrt) or a branch. Company law is in the Civil Code, and registration is electronic through the Court of Registration with mandatory legal representation. Acquisitions in strategic sectors can require government approval under Hungary's foreign investment screening rules.

Key facts

• A Kft with HUF 3 million capital is the usual subsidiary vehicle; a Zrt needs HUF 5 million.

• Registration is filed electronically by a legal representative, so appoint Hungarian counsel at the start.

• A branch can trade like any company, but a commercial representative office is limited to mediating and concluding contracts and liaising for its parent, which affects VAT and permanent establishment exposure.

• Check the foreign investment screening rules before acquiring a stake in a Hungarian business.

Who handles this in HungarySetting up and running a companyContracts and commercial law

Hungary has a low 9% corporate income tax but also a municipal local business tax and, in some sectors, extra-profit taxes. The standard VAT rate is 27%. Hungary does not levy withholding tax on dividends, interest or royalties paid to foreign companies, and requires real-time reporting of invoice data to the tax authority.

Key facts

• Corporate tax is 9%, but add the municipal business tax of up to 2% of adjusted revenue when modelling the total burden.

• VAT is 27% standard, so cash-flow planning for VAT matters.

• No withholding tax applies to dividends, interest or royalties paid to foreign companies.

• Invoicing systems must report every invoice to NAV in real time through the Online Számla system.

• Large groups must apply the Hungarian domestic top-up tax; the first return, for 2024, is due by 30 June 2026.

Who handles this in HungaryTax and structuringAccounting and annual filings

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3 statements on rates, thresholds or deadlines are held back until they are checked against an official source.

Key facts

• Payroll combines 15% income tax and 18.5% employee contributions, with a 13% employer social contribution tax on top.

Who handles this in HungaryEmployment, payroll and immigration

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1 statement on rates, thresholds or deadlines is held back until it is checked against an official source.

The Magyar Nemzeti Bank is both central bank and integrated financial supervisor. Large investments can receive individual government cash subsidies through the Hungarian Investment Promotion Agency.

Key facts

• Banks, insurers and investment firms are licensed by the MNB.

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• Large projects can negotiate cash subsidies through HIPA.

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• Public tenders follow the 2015 Public Procurement Act and are run electronically.

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Who handles this in HungaryLicences, permits and regulatorsTax and structuring

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Hungary uses the forint and has no exchange controls; EU free movement of capital applies. Banks apply customer due diligence under the 2017 anti-money laundering act, and the financial intelligence unit sits within NAV.

Key facts

• Profits can be repatriated freely, but forint exposure needs currency risk management.

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• Expect full KYC, including beneficial owners, when opening an account.

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• Suspicious transaction reports go to the FIU within NAV.

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Who handles this in HungaryBanking and capitalPayments and currencyAnti-bribery, sanctions and compliance

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Hungary is part of the EU customs union and applies the common external tariff and EU trade agreements. Customs is administered by NAV, which also runs the EKAER system; since 2021 EKAER reporting applies only to notifiable (formerly risky) goods. Dual-use exports are controlled under EU rules.

Key facts

• Hungary is inside the EU customs territory; importers of non-EU goods need an EORI number and apply EU customs rules.

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• Check whether the goods are notifiable products under EKAER before transport; since 2021 the obligation covers any type of vehicle.

• Dual-use exports listed in Annex I of the EU regulation need an authorisation from the Hungarian competent authority.

Who handles this in HungaryCustoms, trade and export controls

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1 statement on rates, thresholds or deadlines is held back until it is checked against an official source.

Key facts

• GDPR and the Information Act apply, enforced by NAIH.

• Medium-sized and larger entities in NIS2 sectors must meet the obligations of the 2024 Cybersecurity Act.

• Invoice systems must report to NAV in real time.

Who handles this in HungaryData protection and cyber

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The Hungarian Intellectual Property Office registers patents, utility models, trademarks and designs. Hungary belongs to the main international IP treaties. Copyright arises without registration.

Key facts

• File trademarks nationally with HIPO, as an EU trademark, or through Madrid.

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• Patents can be obtained through HIPO, the EPO or the PCT route.

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• Copyright arises when a work is created, so keep evidence of authorship and creation dates.

Who handles this in HungaryTrade marks, patents and brands

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Hungary has two foreign investment screening regimes, one of which can apply to EU investors as well as non-EU investors. Insolvency is governed by the Bankruptcy Act, with a separate restructuring procedure introduced under the EU directive.

Key facts

• Check Hungarian merger thresholds, and note the GVH can review smaller deals in some cases.

• Run a foreign investment screening analysis early; approval from the Minister of National Economy can be needed even for some EU buyers taking majority control.

• Bankruptcy, liquidation and restructuring are separate procedures.

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Who handles this in HungaryBuying, selling and investingLicences, permits and regulators

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Bribery is a criminal offence under the Criminal Code, and legal entities can face criminal measures. Since December 2022 the EU has suspended part of Hungary's cohesion funding and barred new EU commitments with public interest trusts under its budget conditionality mechanism, and Hungary set up an Integrity Authority.

Key facts

• Bribery, including of foreign officials, is criminal, and companies can face sanctions.

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• Projects relying on EU funds face extra scrutiny: some cohesion funding is suspended and bodies run by public interest trusts cannot take on new EU commitments.

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• Employers with 50 or more staff must run internal whistle-blowing channels.

Who handles this in HungaryAnti-bribery, sanctions and compliance

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Commercial disputes go to the district and regional courts, with the Curia as the supreme court. Arbitration is governed by a 2017 act closely mirroring the UNCITRAL Model Law, and domestic institutional arbitration is centred on the court attached to the Hungarian Chamber of Commerce and Industry. Hungary is a party to the New York Convention.

Key facts

• Awards are enforceable internationally under the New York Convention, subject to Hungary's reciprocity and commercial reservations.

• Domestic institutional arbitration of general commercial disputes is concentrated in the chamber's arbitration court.

• Higher-value cases start in the regional courts, with the Curia at the top.

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• Judgments from other EU states are recognised and enforced without a special procedure under Brussels I bis.

Who handles this in HungaryDisputes and arbitrationContracts and commercial law