HUOperating in Hungary
Payroll, accounting, employment, immigration, entity setup, and corporate compliance managed locally through a single international coordination model.
Request a country assessmentThe regulatory landscape
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.
The detail most often missed by companies modelling Hungary purely on the 9% headline rate is the local business tax (HIPA) — up to 2% of net revenue, not profit, levied by the municipality where the company operates. Combined with a small innovation contribution (0.3%, same base), the realistic total tax burden on a profitable Hungarian company sits closer to 9-11%, but a company with thin margins or temporary losses still owes HIPA on revenue, a structural difference from profit-based systems.
Official language
Hungarian
Legal forms
Kft · Zrt
Corporate tax rate
9% flat (lowest in the EU) + local business tax up to 2% of net revenue + 0.3% innovation contribution
Currency
HUF (Hungarian forint)
Employer social security
13% social contribution tax (szocho) on gross salary — employee side 18.5%, combined burden ~46.5%
Social contribution cap
Applies to capital income (e.g. dividends) until 24× minimum wage annually (~€20,000 for 2026) — employment income uncapped
Minimum share capital
Kft: ~€7,500 (HUF equivalent) · Zrt: higher, per Civil Code requirements
Integrated services in Hungary
Each service is delivered as part of an integrated service model, coordinated across functions under a single point of accountability. Clients engage one team, not a coordination layer between independent providers.
Accounting & Tax Compliance
Statutory accounts, VAT returns, and corporate tax filings aligned with Hungarian accounting standards, including local business tax (HIPA) and real-time invoice reporting compliance.
Explore Accounting & Tax CompliancePayroll & Workforce Management
Full-cycle Hungarian payroll including social contribution tax (szocho), employee social security withholding, and employment terms under Hungarian labour law.
Explore Payroll & Workforce ManagementCompany Formation & Entity Setup
Kft and Zrt incorporation, Hungarian Trade Register filing, and post-formation compliance setup including HIPA registration.
Explore Company Formation & Entity SetupWorkforce Mobility
Work permit and EU Blue Card applications, business residence permit coordination, and salary threshold compliance for internationally mobile employees.
Explore Workforce MobilityClient profiles in Hungary
HR & Employment Advisory
Multinationals establishing or restructuring Hungarian operations
Company Formation & Entity Setup
Companies entering Hungary for the first time, requiring entity setup and initial compliance infrastructure
Workforce Mobility
Groups managing internationally mobile employees on work permit or EU Blue Card status
Payroll & Workforce Management
Companies already operating in Hungary consolidating fragmented HR, payroll and accounting providers under a single governance layer
At the center of your HR operations
What clients say about our services in Hungary
We had a strong revenue year but thin margins due to a major one-off investment, and we were caught off guard that our local business tax bill didn't reflect that at all — it's calculated on revenue, not profit. Once we understood that structurally, we budgeted for it correctly in subsequent years.
Finance Director, Manufacturing Group — Hungarian OperationsInsights on Hungary
Selected articles on regulatory developments and operational frameworks relevant to companies in Hungary.
HIPA is charged on revenue rather than profit, so it is payable in loss-making years as well. What that means for companies with thin margins or a long ramp-up.
Read articleKIVA taxes a different base from standard corporate tax, and the 2025/2026 eligibility thresholds widened the pool of companies that can elect it. How to compare the two.
Read articleDirector compensation has to satisfy a contribution floor set against the minimum wage, regardless of what is actually paid. How to structure remuneration to meet it.
Read articleFrequently asked questions
Questions raised most often by companies entering or operating in Hungary.
What services does HTLC Network provide in Hungary?
HTLC Network provides Payroll & Workforce Management, Accounting & Tax Compliance, HR & Employment Advisory, Company Formation & Entity Setup, and Workforce Mobility services in Hungary through a coordinated international service model.
Why do manufacturers and industrial companies expand into Hungary?
Hungary is frequently chosen for manufacturing, automotive, logistics and industrial operations, for its central location and established industrial infrastructure.
Do I need a local entity before hiring employees in Hungary?
Not always. The most appropriate structure depends on the business activities, the workforce plans and the tax exposure.
How does payroll work in Hungary?
An employer generally manages salary administration, income tax withholding, social contribution obligations and statutory payroll reporting.
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.
Talk to a Hungary expert
For companies structuring a market entry or consolidating an existing Hungarian operation under a single governance model.