Company Formation & Entity Setup in Hungary

Kft and Zrt incorporation, Hungarian Trade Register filing, and post-formation compliance setup including HIPA registration.

Hungary Reviewed September 2026

Currency

HUF (Hungarian forint)

Legal forms

Kft · Zrt

Minimum share capital

Kft: ~€7,500 (HUF equivalent) · Zrt: higher, per Civil Code requirements

Registration body

Company Registry Court, via electronic filing

Formation timeline

As little as a few business days for a standard Kft

Corporate tax rate

9% flat (lowest in the EU) + local business tax up to 2% of net revenue + 0.3% innovation contribution

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How company formation works in Hungary

Hungary applies a flat 9% corporate income tax rate, the lowest in the EU, uniformly across company sizes with no progressive bands. The Kft, Hungary's standard limited liability company, requires HUF equivalent of roughly €7,500 in minimum share capital, available for immediate operating use after formation rather than held in escrow.

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Matched to your business objective

Kft

Liability

Limited to company assets

Min. capital

Kft: ~€7,500 (HUF equivalent) · Zrt: higher, per Civil Code requirements

The standard vehicle for an operating subsidiary of a foreign company — the default choice for most market-entry engagements in Hungary.

Zrt

Liability

Limited to company assets

Min. capital

Kft: ~€7,500 (HUF equivalent) · Zrt: higher, per Civil Code requirements

Used for larger operations, more formal governance needs, or entities seeking to raise capital publicly.

Branch

Liability

None separate — the foreign parent company bears full liability

Min. capital

None — no separate capital requirement

Useful for testing the Hungary market before committing to a subsidiary, or for keeping a single legal entity across borders. Creates a taxable presence — profits are generally taxed in Hungary.

Representative office

Liability

N/A — not a registered legal entity in most cases

Min. capital

None

For market research and liaison activity only — cannot sign contracts, invoice, or trade locally in most jurisdictions.

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What it takes to register, and how long

Formation runs through the Company Registry Court, via electronic filing, typically taking As little as a few business days for a standard Kft.

Local business tax (HIPA) — levied on net revenue, not profit — payable even in loss-making years, up to 2% depending on municipality
KIVA small business tax regime — — entry threshold raised to 100 employees and HUF 6 billion revenue from December 2025, an alternative to standard CIT for qualifying companies
Director minimum contribution floor — — social contributions due on at least 30% of minimum wage (HUF 322,800/month for 2026) even for minimally-paid director-shareholders
Real-time invoice reporting — — mandatory automated upload of nearly all outgoing invoices to the Hungarian Tax Authority's online system

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Frequently asked questions

Why does Hungary tax revenue as well as profit?

In addition to the 9% corporate income tax on profit, Hungarian municipalities levy a local business tax (HIPA) of up to 2% on net revenue, plus a 0.3% innovation contribution on the same base. Both apply regardless of profitability, meaning a company with strong revenue but a loss-making year still owes these taxes.

What is the KIVA regime and who can use it?

KIVA is an alternative small business tax regime taxing the sum of personnel costs and dividends rather than standard accounting profit. As of December 2025, eligibility was expanded to companies with fewer than 100 employees and revenue/balance sheet under HUF 6 billion, with exit thresholds raised to 200 employees and HUF 12 billion.

Why do director-shareholders have a minimum social contribution requirement?

Hungarian law requires social contributions to be paid on at least 30% of the minimum wage (HUF 322,800/month for 2026) for any director drawing a salary, even a minimal one — preventing structures designed purely to minimise contribution exposure through artificially low director pay.

How does the social contribution cap on capital income work?

The 13% social contribution tax on capital income (such as dividends) applies only until total annual income from work and capital gains reaches 24 times the monthly minimum wage — approximately €20,000 for 2026. Above that threshold, no further social contribution is due on capital income for the year. Employment income itself is not subject to this cap.

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Companies modelling Hungary purely on its 9% headline corporate rate consistently miss the local business tax's revenue basis — a company with strong revenue but thin or negative margins still owes HIPA, a structural difference from profit-based tax systems elsewhere in Europe that changes cash flow planning materially.

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