Residence Permit
February 27, 2024
Reading Time: 9 min

Business immigration to Hungary: how to set up a company and get a residence permit

A foreign investor can start or buy an operating business in Hungary and obtain residency. It will take at least six months.

An entrepreneur needs to visit the country at least twice: first, to open a bank account and then to apply for a residence permit. The company will be registered through a local attorney acting on the entrepreneur’s behalf.

Here is what entrepreneurs need to know before relocating to Hungary.

How to buy Hungary real estate: Budapest apartments for getting residence permit
Business immigration to Hungary: how to set up a company and get a residence permit

7 benefits of the Hungary Startup Visa and business immigration to Hungary

1. Possibility to get a residence permit. Founders of companies, buyers of ready-made businesses and private entrepreneurs can become residents of Hungary. To do this, they apply for a residence permit to engage in profitable activities. The status is issued for up to three years with the right to renew.

A 10-year residence permit is available to investors willing to buy units in investment funds or residential real estate.

2. Moving to Hungary. Residents have the right to live permanently in the country if the residence permit is valid. You must stay in Hungary for at least 183 days a year to maintain your status.

3. Visa-free travel within the Schengen Area: with a resident card, you can spend up to 90 days out of 180 in the Schengen states. The entry rules to other European countries should be checked on the consulate's websites. For example, you will need a passport and proof of hotel accommodation to travel to Cyprus.

4. Low taxes and interest on business loans. The income tax in Hungary is 9% — one of the lowest rates in Europe. In addition, Hungarian companies receive a VAT taxpayer number in the European Union, and trade between companies in the Commonwealth countries is not subject to VAT.

For small and medium-sized businesses, there are preferential rates for loans up to 2.6%.

5. State support for entrepreneurs. For example, there is a simplified taxation and accounting reporting system for small and medium-sized businesses. The Hungarian government also actively supports technology startups and helps attract investments.

6. Quality medicine and international education for children. Residents can use the services of state institutions or apply for paid medical services. Residents' children attend local schools and universities. Diplomas of Hungarian universities are recognised in the European Union, the UK, and the US. 

7. Opportunity to get permanent residency and citizenship. After three years of living in Hungary, the owner of a residence permit can obtain a permanent residency. Another eight years lead to citizenship. 

The Hungarian passport allows the holder to enter 170+ countries without a visa, including the UK, Australia, the US, and Japan.

Options for doing business and getting a Hungary Business Visa in 2024

Opening a new company or buying a business. A Hungarian attorney's assistance is required as only they have the right to prepare and submit documents for legal entity registration. The entrepreneur issues them a notarized power of attorney.

Documents for a residence permit are submitted within two months after the company is registered. For example, the investor must prove that the company is in operation by providing a bank statement or employment contract with Hungarian citizens.

Owners and managers of companies should not actively participate in the activities of a legal entity and receive a salary. If the applicant plans to work in any position, they will need to change the residence permit type to a residence permit for employment.

Getting a sole proprietorship or a private entrepreneur status in Hungary. Foreigners who plan to provide professional services, such as conducting business consultations or promoting other companies, can get a private entrepreneur licence in Hungary. Private entrepreneurs are registered through a local attorney by proxy.

Foreigners can become residents only with a private entrepreneur's licence called Egyéni Cég. Although in the usual sense, a private entrepreneur is the status of a specific person, in Hungary, such a licence implies the registration of an entrepreneur in the Unified Register of Companies. It is an important nuance that distinguishes the status of a private entrepreneur from self-employment and affects the calculation of taxes.

Becoming self-employed in Hungary and getting Egyéni Vállalkozó status. Only foreigners with a residence permit for employment, study or family reunification can become self-employed in Hungary and obtain an Egyéni Vállalkozó licence. It means that self-employment cannot serve as a basis for obtaining the status of a resident in Hungary.

The Hungary residence permit for engaging in economic activities is issued for a maximum of 3 years with the possibility of extension. A foreigner can apply for permanent residence after 3 years of living in the country.

The Hungary residence permit bears risks for entrepreneurs. Although a company registration is the basis for a residence permit, it does not oblige the state to guarantee the status. The Migration Service can refuse a residence permit and issue only a business visa, which does not give the right to apply for permanent residence in Hungary.

Suppose a foreigner also opens a company in Hungary for the sake of a residence permit and not for business development abroad. In that case, they can consider other grounds for a residence permit. For example, buying a property in Hungary.

How can a private entrepreneur get residence in Hungary: types of business residence permits

In Hungary, there are two types of licences for private entrepreneurs:

  1. The sole proprietor in the form of a company, Egyéni Cég, — without creating a legal entity.
  2. The sole proprietor as self-employed, Egyéni Vállalkozó. 

Only the Egyéni Cég licence gives the right to obtain a residence permit in Hungary. To register as an entrepreneur, an investor needs to find a local attorney and, together with them, submit documents for registration.

The list of documents for obtaining a licence includes:

  • an act of incorporation signed by the investor and a notary;
  • the charter containing information about the company's name, founder, registration address, and the amount of authorised capital;
  • a receipt for payment of the state fee of €38.

The attorney submits the documents to the Hungarian Chamber of Commerce within 30 days of signing the constituent act. Registration of private entrepreneurs takes place on the day of submission of documents to the chamber.

The founder of a private entrepreneur or his representative needs to contribute the authorised capital. The law does not set the amount of capital for entrepreneurs but determines the form of payment. For example, if the authorised capital is less than HUF 200,000 or €515, it can only be paid in cash.

The investor can apply for a residence permit immediately after registering as an entrepreneur. The list includes:

  • an application for a residence permit;
  • an international passport;
  • two colour photos of 3.5 x 4.5 cm;
  • an entrepreneur's licence;
  • a bank statement or income statement for the previous year;
  • an apartment rental agreement or certificate of ownership of housing in Hungary;
  • health insurance;
  • a stamp duty payment receipt of €110.

The validity period of a residence permit in Hungary for sole proprietors is three years. The status can be extended for the same period.

Who can get Hungary residence permits through business immigration

Requirements for the main applicant are as follows:

  • be over 18;
  • have no criminal records, refusals of a residence permit, or deportations from Hungary;
  • have a registered company's licence;
  • have a legal business income or savings;
  • have a registered address in Hungary;
  • have health insurance.

Spouses and children under 18 cannot get residence permits with an entrepreneur. They obtain residence permits for family reunification separately. The application is submitted when the main applicant becomes a Hungarian resident.

To apply for a residence permit, an entrepreneur must obtain the following entry visas:

  • C — for coming to Hungary and signing the bank account opening documents;
  • D — for obtaining a residence permit after company registration.

Visas are issued at the consulate or embassy of Hungary in the investor's country of residence. The state fee is €80 for a C visa and €110 for a D visa. The obtaining period is 15 to 45 days.

The list of documents for obtaining a C or D visa is the following:

  • a visa application form;
  • an international passport;
  • a copy of a national passport;
  • two 3.5 x 4.5 cm colour photos;
  • copies of all Schengen visas issued within the last 3 years;
  • a certificate of no criminal record;
  • a bank statement;
  • health insurance with the coverage of at least €42,500;
  • a hotel reservation or address of your place of residence in Hungary;
  • an invitation from a Hungarian company or attorney;
  • a receipt of payment of the fee. 

The applicant also includes a copy of the company registration certificate to obtain a D visa.

How to open a company in Hungary and get a residence permit

A foreigner must apply to a local attorney to open a business in Hungary. The entrepreneur draws up a notarized power of attorney, and the attorney prepares the documents and submits them to the Hungarian Court of Registry. 

One can apply for a residence permit only after receiving a company registration certificate.

P3M
Drawing up the company's charter
Drawing up the company's charter

That’s the attorney’s task. However, to prepare documents, the entrepreneur provides information about the company and its founders: 

  • a name and type of business activity;
  • passport details of the founders;
  • registered addresses of the founders;
  • size and types of the company’s authorised capital;
  • the legal address of the future company.

The founder can rent a legal address through an intermediary, such as a attorney or agency. The laws of Hungary prevent the company’s legal address from being coincident with the actual one.

Open a bank account in Hungary and deposit the authorised capital
Open a bank account in Hungary and deposit the authorised capital

Entrepreneurs and co-founders must come to the country; one can’t open an account remotely or by proxy. Banks review applications for up to three weeks.

Register a company
Register a company

The attorney prepares a document package and submits it to the Hungarian Chamber of Commerce. The applicant does not need to be present in the country at this stage. 

The list of documents for company registration in Hungary is the following:

  • an application to the Chamber of Commerce;
  • a company charter;
  • sample signatures of the founders;
  • a power of attorney for a attorney;
  • an application from the company’s director for the gratuitous contribution of the authorised capital;
  • a receipt of payment of state duty to the Chamber of Commerce.

The certificate of registration and TIN are issued within 15+ business days.

Register with other government agencies
Register with other government agencies

Registration with the tax service, the municipality, the Chamber of Commerce, and the pension insurance fund takes 15 days after applying for company registration.

Apply for a residence permit
Apply for a residence permit

When the company is registered, the applicant must confirm its activity: show completed transactions, concluded employment contracts, and capital movement in the account.

The list of documents for a residence permit in Hungary for profitable activities includes the following: 

  • an application for a residence permit;
  • an international passport.
  • two colour photos of 3.5 x 4.5 cm;
  • a certificate of company registration;
  • certificates of registration with the tax service, municipality, Chamber of Commerce, and pension fund;
  • a bank statement or income statement for the previous year;
  • an apartment rental agreement or certificate of ownership of housing in Hungary;
  • health insurance;
  • a receipt for payment of stamp duty in the amount of €110.

The validity period of a residence permit for opening a company is three years. The status can be extended for another three years.

Companies a foreigner can open in Hungary

Four forms of doing business in Hungary are popular among foreigners: 

  1. Limited Liability Company, or Kft.
  2. Joint-stock Company, or Rt.
  3. Unlimited Liability Partnership, or Kkt;
  4. Limited Liability Partnership, or Bt.

The Kft., or LLC, is Hungary's most common type of company. The Kft is suitable for small and medium-sized businesses; even one participant can open it. 

The minimum authorised capital for a Kft is HUF3 million, or about €10,000. Kft founders contribute half the amount at registration and the remainder during the year. 

The Kft. registration fee is about HUF 100,000, or about €260; the amount is paid in full and may vary depending on the exchange rate. 

The Rt., or JSC, is often chosen for registering large enterprises. An Rt. can be private, or open with the ability to go to the stock exchange. To create an Rt., and entrepreneur needs several founders. 

The minimum authorised capital for an Rt. is HUF 20 million, or about €13,000. The authorised capital of the Rt is divided into shares that shareholders own by the contributed capital shares. 

The registration fee for an Rt. is HUF 600,000, or approximately €1,550.

The Kkt., or the unlimited liability partnership, can create a minimum of two participants, each of whom has equal legal liability. Transferring partner shares to other parties is possible if all the co-founders approve the decision.

The size of the minimum authorised capital is unlimited. The registration fee is HUF 50,000, or about €130.

The Bt. is a limited liability partnership. The main difference between the Bt and the Kkt is that one or more co-founders are recognised as general shareholders and have unlimited liability. The remaining co-founders have the status of "limited partners".

The size of the minimum authorised capital for a Bt is not limited. The registration fee is HUF 50,000, or about €130.

Conditions for opening a company in Hungary

Company formCostsFoundersBusiness size
Kft., or LLCHUF 3 million, or about €10,000 — the minimum authorised capital

HUF 100,000, or about €260 — annual registration fee
1 personSmall or medium
Rt., or JSC 
HUF 20 million, or approximately €50,000 — minimum share capital

HUF 600,000, or approximately €1,550 — annual registration fee
2 peopleLarge
Kkt., or unlimited liability partnershipNo minimum capital 

HUF 50,000, or approximately €130 — annual registration fee
2 peopleSmall or medium
Bt., or limited liability partnershipNo minimum capital 

HUF 50,000, or approximately €130 — annual registration fee
2 peopleSmall or medium

Things to consider before starting a company in Hungary

Hungary's economy has been growing. Every year, the country's GDP increases by an average of 5%, and in 2022 the figure reached 7%. The following areas are developing faster than others: 

  • automotive, electronic and food industries;
  • pharmaceutical and medical activities;
  • information technologies.

Hungary has signed double tax treaties with more than 80 countries, including the UK, the UAE, Turkey, and most of the EU countries. Residents of one of these countries are not taxed on income earned there, if they also have Hungary residency.

In Hungary, there are 3 tax types for business to pay, regardless of the type of activity:

  1. Corporate tax is charged at 9%.
  2. VAT rate is 27% as a standart. The reduced rate of 18% applies to certain food products, including dairy-based desserts, and 5% for more types of baby formula, as well as for medical equipment, medicines, and books. In the first year of operation, all companies pay VAT every quarter.
  3. Local business tax is deducted from the company's gross profit. The standard rate is 2%, but it heavily depends on the municipality, and can be reduced to 1%.

Companies pay the capital gains tax on profits from the sale of assets: securities, real estate, and precious metals. The rate for legal entities is 9%.

KATA scheme is a tax regime aimed at small-scale entrepreneurs in Hungary; eligible taxpayers must earn annual revenue under HUF 18 million and only work with private clients, not corporations;

All KATA-eligible businesses are taxed HUF 50,000 a month, and pay an additional HUF 50,000 as a mandatory annual contribution to the Hungarian Chamber of Commerce.

Rental of real estate. An investor rents or buys commercial premises to open a physical office, store, or coffee shop in Hungary. It can be done after the company is registered. 

Prices for office space rental vary depending on the city area and area and condition of the property. The average cost of renting an office in Budapest is €13.9 per 1 m²  per month, while purchases are €3,000 per 1 m².  

Open a company in Hungary and get a residence permit
A foreigner can register a company in Hungary but only with the assistance of a local attorney

Other ways to get a Hungary residence permit

Hungarian laws provide more than 10 grounds for obtaining a residence permit. One of them is “for other purposes”, with the opportunity to become a resident as a real estate owner or a financially independent person. The term for obtaining residency is at least two months.

The Hungary residence permit by investment in real estate can be obtained when buying housing for at least €500,000. 

The spouse, children, and parents can become residents with the investor. The main condition is that relatives must be financially dependent on the main applicant.

The residence permit is granted for 10 years. The holder can extend it once for the same period.

Residence permits for financially independent individuals are issued to foreigners with a stable income outside the country in the amount of €10,000 per person in the application. The investor has the right to obtain residence permits for the spouse and children under 18.

The applicant must confirm the registration address in Hungary by renting or buying a property where each family member will have at least 6 m² of living space. 

The Migration Service website states that a residence permit is issued for five years, but in reality, foreigners receive it for two years. The holder can renew it for the same period.

Key points on opening a business in Hungary and becoming a resident

  1. Foreigners can get Hungary residence permits to engage in profitable activities if they open a new company, buy an operating business, or obtain a licence as self-employed. Obtaining residency takes at least 6 months.
  2. Foreigners can start a business without Hungarian citizens as founders. However, they must contact local attorneys to obtain a company registration certificate.
  3. Although the registration of a company is the basis for obtaining a residence permit, it does not oblige Hungary to grant resident status to an entrepreneur. The Migration Service can refuse a residence permit and issue only a business visa.
  4. The self-employed status does not give the right to apply for a residence permit in Hungary. Only foreigners who have already become residents on another ground can apply for self-employment.
  5. If a foreigner opens a company in Hungary for the sake of a residence permit and not for business development, they can consider other grounds for a residence permit. For example, investors can get residency for buying a property in Hungary.

Frequently Asked Questions

How do I open my own business in Hungary?

To start a business in Hungary, you will need the help of a local attorney. They will prepare and submit the documents to the Chamber of Commerce. 

Most procedures can be done without the personal involvement of the applicant. But to open a bank account for the company, the applicant will have to come to Hungary. 

What are the requirements for the Hungary Startup Visa or a business visa?

To become a resident of Hungary by starting a business, you must obtain a licence for a private entrepreneur — Egyéni Cég. 

By law, you must contact a Hungarian attorney and work through them. They will prepare and submit all the documents to the Hungarian Chamber of Commerce. 

What is the process of applying for the Hungary Startup Visa?

If you plan to get Hungary residence permit for establishing a business, you must contact a local attorney first. They will be acting on your behalf when registering you entrepreneurship. As a foreigner, you can not do that on your own.

You will need to visit the country at least twice: first, to open a bank account and then to apply for a residence permit.

How much does a business residence permit in Hungary cost?

The cost of a residence permit when opening a company in Hungary will consist of three parts: registering a company, obtaining an entry visa and obtaining a residence permit status. Annual taxes also apply. 

For example, to register an LLC in Hungary, you will need at least HUF 3 million, or about €10,000 as a minimum authorised capital. There is also an annual registration fee of HUF 100,000, or about €260. Other expenses will include services of a Hungarian attorney and administrative fees. The minimum authorised capital depends on a company form per classification in Hungary. 

A foreigner will need a visa to come to Hungary and open a bank account. The fee for obtaining a Schengen visa starts from €75, and expenses can also include insurance, accommodation and air tickets to Hungary. 

To get a residence permit, a foreigner needs to rent or buy an apartment in Hungary, transfer and certify documents, apply for an insurance policy and pay the fee for obtaining an ID card for €110.

As a company director, do I have to live in Hungary full-time to maintain my residency?

No, company directors are not even required to be residents or citizens of Hungary and, therefore, do not have to live there full-time, even if they have a residence status.

How much does it cost to become an entrepreneur in Hungary?

The cost of registering entrepreneurship in Hungary consists of three parts: 

  1. Minimum capital. The laws do not specify the amount of capital, but if it is less than €515, it is required to pay for it in cash.
  2. State fee for registering with the Hungarian Chamber of Commerce — is €38.
  3. Payment for the services of a Hungarian attorney.

To be eligible to become a resident of Hungary, you must obtain a licence for a private entrepreneur — Egyéni Cég. 

What kind of business is in demand in Hungary?

In Hungary, IT companies, electronics and food industry enterprises, and pharmaceutical and medical services are rapidly developing. Private entrepreneurship is popular, and can lead to a residence permit. 

What do I need to do to move to Hungary?

To move to and live in Hungary legally, you will need a residence permit. You can get it in 12 different ways, such as starting a business, reuniting with your family, or as a financially independent person. 

Relocation to Hungary will open the way to European education and medicine and allow investors to use the services of European banks without sanctions and restrictions.

Can I live in Hungary without knowing the language?

Hungarian is the country’s only official language. English is not widely spoken, except in Budapest. For a comfortable life in the country, it is best to learn the language at a basic level, especially if you want to start a business here and get a Hungary residence permit.

Immigrant Invest is a licensed agent for government programs in the European Union and the Caribbean.

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