- 14 Jan 2022 10:18 AM
The following guideline helps you in the process by presenting the legal background of starting a business in Hungary.
The first step is choosing the right company form. The most common company forms are the limited liability company (in Hungarian: Korlátolt Felelősségű Társaság- Kft.) and the limited partnership company (in Hungarian: Betéti Társaság-Bt.). It depends on various factors which form would be the right for you, in order to choose which one suits your goals the best, you need to be aware of the differences between them.
First you should consider what your goal is with the company, what your financial status is and how much responsibility you are willing to take.
For setting up a Bt. at least two partners are required. The partners agree to provide capital contribution and at least one of the partners has personal liability for the company’s debts not covered by the company’s assets (general partner/ beltag) and at least one other partner is not liable for the obligations of the company (limited partner/kültag). For setting up a Bt., the minimum amount of the inital capital is not set by law.
In a Kft. shareholders have limited liability and are not normally liable for corporate debts with their private assets. The minimum of the initial capital of a Kft. is 3.000.000,- HUF. The capital contribution can be monetary (cash) or non-monetary (for example property, rights representing assets, claims etc.).
Once you decided on the company form the next step is to choose the company’s name. The company’s name can not be a name that is already used by another company, and it can not be a name that is easily confused with an already existing company’s name.
Another essential detail for the comapny registration is having a registered seat. If you wish to set up the company’s registered seat in a property owned by a third party, it is necessary to obtain a consent statement from the owner of the property authorizing the company to register the property as a seat.
The managing director (s) of the company can be foreign citizens as well, with independent or joint signatory right. Those shareholders and managing directors who don’t have a Hungarian address/registered seat, shall assign a mailing agent in Hungary.
The company registration proceeding is electronic and legal representation is mandatory at the Company Court. Both Kft. and Bt. can be set up in a simplified proceeding, with a one business day registration deadline. Within 8 days after the company was registered in the company register it has to open a corporate bank account at a Hungarian bank.
Dr. Szegő Judit Law Firm’s activities cover the whole area of civil law, including the following areas: company law, property law, family law, labour law, inheritance law, and litigation. Furthermore the office has wide experience in representing foreign investors in Hungary with full authority in English and German.
Address: 1026 Budapest, Pasaréti út 12/A. I/2.