Offshore company formation in Hungary
Hungary offshore company formation is a good opportunity to start an EU company with 9% corporate tax. The formation process is extremely fast.
The Limited Liability Company (KFT) is an ideal company form if the number of members is low. It is very similar to the German Gmbh. Many foreign investments have been channeled through this type of company.
A KFT is treated as a Hungarian tax resident if it is managed from Hungary, main business decisions should be made from Hungary to provide the background of the residency. The director does not have to be from Hungary. Director’s Meetings have to be in Hungary for maintaining Hungarian tax residency. Shareholders and/or directors can be either physical persons or corporate entities.
There is a paid-up capital of HUF 3 million (cc EUR 10.000). Until the share capital is not fully paid, the shareholder is responsible for the payables of the KFT in the amount of the unpaid share capital the KFT is not entitled to pay out dividends, but the share capital can also be paid from the earnings of the company.
For example, if the shareholder did not pay any amount yet and the earnings of the KFT are HUF 10 million, then HUF 3 million can be treated as the payment of the share capital and only the rest of HUF 7 million can be paid out as a dividend.
It is a statutory requirement that a KFT must have a bank account opened in a Hungarian financial institution.
What are the steps to forming a Hungary company?
Bank account opening
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Frequently asked questions
Hungary applies withholding tax only regarding payments to private persons, so all payments from a Hungarian Kft to corporate entities are not subject to withholding tax. Dividends paid to foreign individuals are charged with 15% personal income tax, except if a double tax treaty states otherwise.
Companies are obligated to pay income tax at a rate of 9% after profit. The tax rate is applicable to worldwide income.
Only micro and small enterprises are exempted from innovation tax, the medium enterprises are subject to an innovation tax of 0.3%.
VAT in Hungary is 27%.
Hungary has concluded tax treaties with more than 70 countries.
- Certificate of Incorporation
- Memorandum and Articles of Association
- List of Directors
- Address of the company’s registered office
- Notarized specimen signature of the director
Only direct shareholders are disclosed to the Court of Registry. Names of shareholders owning more than 50% as well as the directors are publicly available.
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