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

7 benefits of business immigration to Hungary 

3. Visa-free travel across the Schengen Area. A Hungarian residency card allows staying in other Schengen states for up to 90 days in each six-month period. For more extended stays, a Hungarian resident will have to obtain a national long-term visa to a particular country.

4. Low taxes and interest rates on business loans. The corporate income tax rate in Hungary is 9%, which is the lowest in the EU. The standard VAT rate is 27%, but certain goods, such as bread, dairy products, medicines, or internet services, are taxed at a reduced rate of 18% and even 5%. Small and medium-sized businesses can benefit from low preferential loan rates of up to 2.6%.

5. Quality medicine and international education for children. Hungarian residents can seek treatment in public and private clinics in the country. They can also get a European Health Insurance Card, which provides access to medical treatment in EU and EEA countries, either for free or at a reduced cost.

Residents’ children attend Hungarian schools and universities. Five of the country’s universities are among the top 1,000 worldwide, according to the QS Top Universities ranking. Hungarian diplomas are recognised in the European Union, the UK, and the US.

6. Solid banking system. Hungary features one of the most developed banking systems in Central and Eastern Europe. Residents open individual bank accounts under a simplified procedure, providing just a passport and a residency card. With a Hungarian bank account, foreigners can easily transfer money to other EU countries via the SEPA system.

7. State support for entrepreneurs. Small and medium-sized businesses in Hungary benefit from a simplified taxation and accounting reporting system. The Hungarian government also actively supports technology startups, helps attract investments, and provides subsidies.

Conditions for obtaining and holding Hungarian residency by business registration

Opening a company. Third-country investors in business in Hungary are entitled to a guest self-employed residence permit. The process of obtaining residency includes creating a business plan, opening a corporate bank account in Hungary, and registering a company with Hungarian authorities.

To open a bank account, the investor must visit a bank office in Hungary in person. Banks process applications in at least one month.

Once the bank account is opened, the investor creates a business plan, registers a company, and signs necessary agreements with partners and contractors. These steps can be completed in person in Budapest or remotely. Hungarian authorities complete registration of a business within 5—10 working days. After that, the investor can apply for residency.

Acquiring residency. Throughout the process of obtaining residency, a candidate needs to get two visas for Hungary:

• a Schengen, or type C, visa — to open a corporate account in a Hungarian bank;
• a national, or type D, visa — to apply for a residence permit after company registration.

Both visas are obtained at the Hungarian consulate or embassy in the investor's country of residence. The cost of a type C visa is €80. For a type D visa, the applicant has to pay €110.

The list of documents for obtaining a type C and a type D visa includes:

• travel document;
• two 3.5 × 4.5 cm colour photos;
• certificate of no criminal record;
• health insurance;
• proof of accommodation in Hungary;
• company registration certificate, when obtaining a type D visa;
• bank statement showing savings of at least €10,000, when applying for residency.

Maintaining the status. The initial residence permit is granted for one year. To maintain it, a foreigner must stay in Hungary for over 90 days within any 6-month period.

Extending a residence permit. Upon permit expiration, the investor may apply to extend the residence permit for up to two additional years. Upon expiration of the extended permit, the investor and their family must leave Hungary and submit a new application.

Holders of a Hungary residence permit by company registration are not eligible for permanent residency or citizenship.

Who can get a Hungary residence permit by business registration

To qualify for a guest self-employed residency, a candidate must meet the following conditions:

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

A business can be established by a group of investors, all of whom are entitled to residency. The number of founders must correspond to the size of the company created. 

It is advised that all investors be assigned as directors of the company. This arrangement provides them with an additional reason to move to Hungary to manage the company, which increases their chances of approval.

Residency for the family. The investor's spouse may be included in the application and can also obtain residency by being listed as a co-founder of the company.

Dependent children under 18, along with a spouse who is not a co-founder, are not eligible to be included in the initial application and cannot obtain residence permits through family reunification. They are eligible to join the investor during the residence permit extension process one year later.

Things to consider before starting a company in Hungary

Hungary's economy has been growing. Each year, the country's GDP increases by an average of 5%, and in 2022, the figure reached 7%. The following sectors 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 EU countries. Residents of these countries are not taxed on income earned there, if they also have Hungarian residency.

In Hungary, businesses are required to pay three types of taxes, regardless of the type of activity:

1. Corporate tax is charged at 9%.
2. VAT is levied at rates of 27%, 18%, or 5% rate, according to the product category. In the first year of operation, all companies pay the VAT every quarter.
3. Local business tax is deducted from the company's gross profit. The standard rate is 2%, which can be reduced to 1% depending on the municipality.

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

Small-scale entrepreneurs in Hungary benefit from the KATA tax scheme. To qualify, a business must generate annual revenue of under HUF 18 million (approximately €46,000) and serve only private clients. Under this scheme, eligible businesses pay a flat tax of HUF 50,000 (about €128) monthly. Additionally, they are required to make an annual contribution of the same amount to the Hungarian Chamber of Commerce.

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. (LLC) is Hungary's most common type of company and is well-suited for small to medium-sized businesses. It can be established by even a single participant.

The minimum authorised capital for a Kft. is HUF 3 million, approximately €7,700. Founders are required to contribute half of this amount at registration and the remainder within the year.

The registration fee for a Kft. is about HUF 100,000, or approximately €260. This amount is paid in full and may vary with exchange rate fluctuations.

The Rt. (JSC) is typically chosen for registering large enterprises and can be private or prepared for listing on the stock exchange. Establishing an Rt. requires multiple founders.

The minimum authorised capital for an Rt. is HUF 20 million, approximately €50,000. This capital is divided into shares based on each shareholder’s contribution.

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

The Kkt., or unlimited liability partnership, requires at least two participants, each bearing equal legal liability. Shares can be transferred to other parties only with unanimous approval from all partners.

There is no minimum authorised capital requirement for a Kkt. The registration fee is HUF 50,000, approximately €130.

The Bt., a limited liability partnership, differs from the Kkt. in that it includes both general partners, who have unlimited liability, and limited partners, who have reduced liability.

There is no minimum authorised capital requirement for a Bt. The registration fee is HUF 50,000, approximately €130.

Conditions for opening a company in Hungary

Company form	Costs	The minimum number of founders	Business size
Kft., or LLC	HUF 3 million, or about €7,700 — the minimum authorised capital HUF 100,000, or about €260 — annual registration fee	1 person	Small 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 people	Large
Kkt., or unlimited liability partnership	No minimum capital  HUF 50,000, or approximately €130 — annual registration fee	2 people	Small or medium
Bt., or limited liability partnership	No minimum capital  HUF 50,000, or approximately €130 — annual registration fee	2 people	Small or medium

Other ways to get a Hungary residence permit

Hungarian immigration legislation provides 24 grounds for obtaining a residence permit, including eight permits for employment purposes, a residence permit for digital nomads, and a visa for investors.

Residency for digital nomads, referred to as the White Card, is granted to third-country nationals earning income outside the EU and to entrepreneurs with businesses registered outside of Hungary. The permit is initially issued for one year with the possibility of an extension for another year. No dependents can be added to the application.

The Hungary Golden Visa, officially called the Guest Investor Residence Permit, allows foreigners to obtain a 10-year Hungarian residency by investment. To qualify, a candidate invests in one of the available options:

• investment in real estate fund units — €250,000+;
• residential property purchase — €500,000+;
• non-refundable donation to an institution of higher learning — €1,000,000+.

The applicant’s spouse and children obtain residency together with the investor. To maintain their status, they are not required to move to Hungary. Upon expiration, residency can be extended for up to 10 years.

Key points on getting Hungarian residency by business registration

1. Entrepreneurs coming from a third country obtain a guest self-employment residency in Hungary.
2. Residency by business registration is granted for one year and can be extended for up to two years. The investor can add their family to the application only when extending the residence permit after the first year.
3. Foreigners can start a business without Hungarian citizens as founders. However, they must contact local attorneys to obtain a company registration certificate.
4. Applicants need to visit Hungary twice to obtain residency: to open a corporate bank account and to apply for a residence permit. Company registration does not require the applicant's personal presence.
5. Other ways to get a Hungary residence permit include obtaining a White Card as a digital nomad and becoming a resident by investment.

Frequently Asked Questions