Hungary has a significantly leading position in international trade, lending services, property registration, and enforcing contractual conditions as it was stated in the World Bank ratings. This country has many advantages as a business destination thanks to having a stable political situation, developed infrastructure, skilled labor force, and high living standards. Moreover, Hungary is considered a developed market economy and offers investor-friendly taxation and laws, the visa-free regime in the Schengen zone, simplified residence procedure.
If you are thinking about starting a business in Hungary, it could be useful to focus on eco-farming, IT, power generation, hospitality, transport, mining, and mechanical engineering. In addition, it goes without saying that Hungary is a suitable business destination since it is an EU member. However, there are other pros of Hungary that are not so obvious. Those include affordable office space pricing, little red tape, and perks of SMBs.
Forms of business organization
Let’s take a look at the list of organization forms possible to register in Hungary:
- PLLC (zRt)
- LLC (Kft)
- LLP (Bt)
- PLC (nyRt)
- Subsidiary (Fa)
- Representation office (Ki).
Taxation for businesses
Hungary is a popular place for foreign entrepreneurs to open a company there, one of big reasons being Hungary’s investor-friendly taxation. Being the lowest one in the EU, income tax in Hungary equals only 9%. That is why it makes more sense to open a company there than in an offshore zone. Furthermore, the foreign companies that participate in environmental protection projects, food industry, Internet provision, warehousing, or film industry have a possibility of receiving a tax relief of up to 80% for as long as 10 years. Hungary also does not impose any taxes on dividends, royalties, and dividends.
When it comes to other corporate taxes, they are the following:
- VAT rate 27%
- LBR – starting from 2%.
Our clients are people who are in the process of registering a company in different European states including Hungary. Do not hesitate to contact COREDO specialists with the requests related to this topic.