The commercial law in Hungary has been harmonized with the European Union legislation, following Hungary’s admission in the EU. Also, the country has made efforts in other legal sectors to evolve towards an European standard.
Commercial law for company registration in Hungary
Investors that want to open a company in Hungary must begin the registration of the company by depositing at least half of the capital amount into a bank account.
The capital varies according to the type of company. According to the new Civil Code, the new corporate law regime establishes a new minimum registered capital requirement for limited liability companies: 3 million HUF (approximately 9.500 Eur, in July 2014). Previously, the minimum capital was significantly lower, at 500.000 HUF.
Other changes brought by the new Civil Code that concern the registration of a company in Hungary refer to companies limited by shares. They must be established as private companies and only subsequently transformed into public companies. Also, public companies must be listed on a stock exchange. Our lawyers can give you more details about this matter. They can also assist you in case you need trademark registration services in Hungary.
The new Civil Code also states that an individual that has an interdiction to practice a profession cannot be a member of a company, unless it is a public limited company.
Termination of a businesses in Hungary
In case of mergers, demergers and conversions, companies in Hungary may be terminated with succession.
If the Hungarian business is terminated by liquidation, the procedure is governed by the provision of the Act on Bankruptcy and Liquidation Proceedings.
There are certain cases in which companies can be liquidated without succession:
– the company is required by law to to so;
– it is terminated by the court of registration;
– the number of business members decreases below the accepted norm for each type of company;
– a decision has been made to terminate the company (liquidation); etc. For seasoned businesspeople and significant investors who come to the country with their plans for growth, profitability, and success, Hungary continues to be a desirable destination. This country is advantageous for foreign investors for several reasons, including the quick establishment of businesses there, the government’s and banks’ loyal treatment towards foreign residents, and the country’s low tax rates. Hungary is a member of the EU, which comes with all the benefits in terms of reputation, transactional ease, controllability, and counterparty confidence. If you are interested to immigrate to Hungary, get in touch with our lawyers.
Corporate taxes in Hungary
Corporate taxation in Hungary, as required by law, include:
– corporation tax: imposed on a company’s accountable profits;
– capital gains: taxed as part of the accounting profit with rates set at 10%
– withholding tax: no withholding tax on dividends paid to a nonresident legal entity; dividends paid to a nonresident individual entity can be subject to a 16% withholding tax.
For further information about laws regarding business and commercial transactions, please contact our law firm in Hungary. We can provide qualified consultancy and a wide range of legal services offered by our experienced Hungarian lawyers specialized in financial and corporate law.