Setting up a company in Hungary.
Setting up a company in Hungary
Today Hungary offers international businesses one of the most favourable tax rates and corporate administration of local companies, which allows the country to successfully compete with the well-known centres of international tax planning, such as Cyprus and Malta. Hungary is a fast developing country whose legislation is on the way closer to the Western model. Activities of firms in Hungary are regulated by the Companies Act 1988.
The corporate tax rate is 19 %, but if the profits of a company does not exceed 500 million forints ( about € 1,7 million) a preferential rate of 10% can be applied. However, for Hungarian holding companies there are tax exemptions on dividends at the level of domestic law , as well as at the level of bilateral tax agreements. It is worth noting the fast and fairly simple procedure of registration of legal entities in Hungary, the relatively low costs of their creation and administration.
The banking system in Hungary is very transparent and reliable, and most importantly – very democratic. It is very easy to open an account there as you do not need to provide any certificates of solvency, deposit and so on. It is not necessarily at the same time to conduct all transactions through the Hungarian bank accounts. Hungarian law allows open accounts abroad too.
In general, we can point out several main advantages of setting up a company in Hungary:
- Geographical location. Hungary is located in the heart of Eastern Europe.
- Unlike many other countries , the Hungarian corporate law clear and understandable to everyone
- Sound banking system
- Infrastructure
- Ability to obtain a residence permit for employees
- Only the Hungarian and Cypriot offshore can actually provide proof of status of the taxpayer at the place of its registration
