HUNGARY
The Limited Liability company (KFT) is an ideal company form if the number of members is low. It is very similar to the German Gmbh. Many foreign investments have been channeled through this type of company.
Management
A KFT is treated as Hungarian tax resident if it is managed from Hungary, main business decisions should be made from Hungary to provide the background of the residency. Director does not have to be from Hungary. Director’s Meetings have to be in Hungary for maintaining Hungarian tax residency. Shareholders and/or directors can be either physical persons or corporate entities.
There is a paid up capital of HUF 3million (cc EUR 10.000).. Until the share capital is not fully paid, the shareholder is responsible for the payables of the KFT in the amount of the unpaid share capital the KFT is not entitled to pay out dividend, but the share capital can also be paid from the earning of the company. Fox example, if the shareholder did not pay any amount yet and the earnings of the KFT is HUF 10 million, then HUF 3 million can be treated as the payment of the share capital and only the rest HUF 7 million can be paid out as dividend.
It is a statutory requirement that a KFT must have a bank account opened in a Hungarian financial institution.
In order to commence KFT company formation in Hungary, please provide the following:
- true copies of the ultimate private individual shareholders’ passport
- true copies of the ultimate private individual shareholders’ proof of residential address not older than 3 months (ID copy or bank statement, bank reference, utility bill)
- Your payment to the EURO COMMERCE LLC bank account
About Hungary
The Republic of Hungary is situated in Central Europe and has borders with Austria, Slovenia, Croatia, Serbia, Romania, Ukraine and Slovakia. The country is mostly flat. Lake Balaton, Central Europe’s biggest lake is the main tourist attraction. The population of Hungary is about 9.9 million.
Tax in Hungary
Hungary applies withholding tax only regarding payments to private persons, so all payments from a Hungarian Kft to corporate entities are not subject of withholding tax. Dividends paid to foreign individuals are charged with 15% personal income tax, except if a double tax treaty states otherwise.
Companies are obligated to pay income tax at a rate of 9% after profit. Tax rate is applicable to the worldwide income.
Only micro and small enterprises are exempted from innovation tax, the medium enterprises are subject of innovation tax of 0.3%.
VAT in Hungary is 27%.
Hungary has concluded tax treaties with more than 70 countries.
Nominee Service
Professional Director is available. Fees for appointing professional director are charged annually.
Accounting and Audit
Accounting, preparation of financial statements, VAT and VIES preparation and submission, is always required.
Audit is obligatory for companies whose profit annually exceeds EUR 1mio.
EORI registration is available for Hungarian companies.
List of documents received for standard KFT
- Certificate of Incorporation
- Memorandum and Articles of Association
- List of Directors
- Address of the company’s registered office
- Notarized specimen signature of director
Privacy
Only direct shareholders are disclosed to the Court of Registry. Names of shareholders owning more than 50% as well as the directors are publicly available.
Corporate name
Restricted business activities: banking,insurance, rendering financial services to the public.
Restricted company names:asset management, asset manager, assurance, bank, banking, broker, brokerage, capital, credit, currency, custodian, custody, dealer, dealing, deposit, derivative, exchange, fiduciary, finance, financial, fund, future, insurance, lending, loan, lender, option, pension, portfolio, reserves, savings, security, stock, trust or trustees.
Names can be expressed in Hungarian or English.
Bank account
For Hungarian Kft we can assist you with the bank account opening internationally. The banks we cooperate with are reliable financial institutions with a long tradition in private and corporate banking. Our clients are provided with an excellent customer service, online banking, Visa and/or Master cards, as well as other services, such as factoring, foreign exchange, savings and specialized banking solutions.
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