Residence permit
May 21, 2024
Reading Time: 9 min

Hungary residence by business registration and its benefits

The number of operating companies and entrepreneurs in Hungary is constantly growing. In 2022, there were 1 million active companies in the country, of which 22,000 had foreign participation.

Foreigners may open companies in Hungary under the same conditions as Hungarian citizens. At the same time, the founders of Hungarian companies have the right to obtain residence permits.

Zlata Erlach
Zlata Erlach

Told about the nuances of Hungary business immigration

Hungary business residence

Hungary residence by business registration and its benefits

3 benefits of Hungary business residency

1. Growing economy. Hungary’s GDP has doubled over the past 10 years since 2014. In contrast, the total GDP of the EU countries during this period increased by 1.4 times.

One of the reasons for the development of the Hungarian economy is the lowest cost of electricity and gas in the EU.

2. Low taxes. Companies in Hungary pay a corporate tax of 9%, which is the lowest rate in the EU; only Montenegro offers the same rate. For comparison, in Germany, the corporate tax rate is 15%, and in Spain, it is 25%.

The income tax in Hungary is at a flat rate of 15%. Other EU countries use a progressive scale: in Germany, it is up to 42%, and in Spain, up to 45%.

3. Low labour costs due to the low cost of living. In 2023, Hungary’s average salary before tax was HUF 570,000, or €1,425. For employees with higher education, the average salary is 1.5 times higher.

Hungary business residence for opening a company

Foreign founders of Hungarian companies are entitled to residence permits. If a company has several founders, then each one can obtain a residence permit. The organisational and legal form of the company does not matter.

Suppose the applicant holds the director position in their own company; in that case, this increases the chances of obtaining a residence permit. Managing a business in Hungary provides additional justification for obtaining residency.

The Migration Service assesses whether a business can provide an applicant with an income of at least €1,500 per month. For a new company, income is confirmed by a business plan, and for an existing company, by certificates and bank statements. A business plan is not needed if five citizens of Hungary or other EU countries are employed.

The residence permit in Hungary for opening a company is valid for up to 3 years: initially, the permit is issued for one year with the right to extend it once for two years. Afterwards, the foreigner must leave the country but can obtain a residence permit with the same company again.

The residence permit for opening a company does not confer the right to permanent residency or citizenship. For these purposes, a Golden Visa is suitable.

Business immigration in Hungary with family members

Family members of an entrepreneur do not get residence permits immediately but may obtain one after a year when the main applicant’s residence permit is renewed. Qualifying relatives include:

  • a spouse in a registered marriage;

  • children under 18;

  • parents if financially dependent on the main applicant.

Relationships and kinship are confirmed by a marriage certificate for spouses, a birth certificate for children, and birth certificates for parents.

Residence permits for family members are valid as long as the residence permit for company opening is valid.

Hungary business residence

Hungary issues residence permit cards of the unified EU standard

How to start a business in Hungary: choosing a company type

Entrepreneurs can register a business in one of the following forms in Hungary:

  • a company — LLC or JSC;

  • partnership — full or limited liability.

Among Hungarian companies, the most significant number are LLCs. Out of every 100 commercial organisations, 80 are limited liability companies, 17 are partnerships, and 2 are joint-stock companies. Other forms of doing business account for 1% of all organisations.

Companies and partnerships form a legal entity. Despite this, individual entrepreneurs and companies are included in the unified register of legal entities.

The company conducts one or more activities that are specified during registration. Some areas require a licence or employees with confirmed qualifications and some notifications about the start of work.

The limited liability company, Kft, has the following characteristics:

  • an authorised capital of at least HUF 3 million, or €7,700;

  • 1 or more founders;

  • liability for obligations is in the amount of the authorised capital.

The minimum share of each Kft founder is HUF 100,000, or €250. The authorised capital is contributed in money or property: real estate, intellectual property, equipment.

The highest governing body of a Kft is the meeting of shareholders. The number of votes of a founder is proportional to their share in the authorised capital. The meeting elects one or more company directors who directly manage the business. Directors do not have to be founders of a Kft.

The joint stock company, Rt, has:

  • an authorised capital of at least HUF 5 million, or €12,700;

  • 1 or more shareholders;

  • liability for obligations in the amount of the authorised capital.

Joint-stock companies are established as public, Nyrt, or non-public companies, Zrt. Shares of a public joint-stock company are placed on the stock exchange, while shares of a closed joint-stock company are distributed only among the founders-shareholders.

The minimum authorised capital of a Nyrt is four times larger than that of a Zrt — HUF 20 million, or €50,700.

A joint-stock company’s highest governing body is the shareholders' general meeting. Shareholders elect a board of directors, which includes at least three people. The board of directors makes decisions collectively by a simple majority of votes. In a non-public joint-stock company, shareholders may appoint one director instead of a board of directors.

The partnership types of Kt and Bt are characterised by:

  • an authorised capital of any size;

  • at least 2 founders;

  • liability for obligations where the founders are liable with their property.

Partnerships are established as general partnership Kt or limited liability partnership Bt.

In a general partnership, the founders bear complete financial responsibility for the company’s activities. A limited liability partnership is established by partners of two categories: those with total liability for all their property and those with limited liability up to the amount of their share of the authorised capital.

The highest governing body of the partnership is the general meeting of founders. This meeting elects a director or board of directors from among the partnership founders. The number of votes of each member of the partnership is the same and does not depend on their share in the authorised capital.

Individual cost calculation for a Hungary Business Residence Permit

Individual cost calculation for a Hungary Business Residence Permit

Step-by-step procedure for opening a company in Hungary

A company is registered in Hungary not directly but through an authorised Hungarian lawyer.

The registration chamber maintains the register of legal entities and individual entrepreneurs under the jurisdiction of the National Tax and Customs Administration.


1+ days

Prepare documents for company registration

The list of documents for a foreigner to open a company in Hungary includes the following:

  • an international passport, domestic passport or identity card;

  • proof of residential address, such as a utility bill;

  • a company charter;

  • a memorandum of association;

  • sample signatures of founders and directors;

  • applications for office from directors;

  • confirmation of legal address: a lease agreement, consent of the owner.

Documents are translated into Hungarian at the state translation agency or certified at the consulate.


5+ days

Submit documents for company registration through a Hungarian lawyer

The founders sign the constituent documents and the application for registration in the presence of a lawyer in Hungary or via video link. In the latter case, the signed originals are sent to Hungary by mail.

The company is registered within 5–10 working days. After registration, the lawyer sends notifications to the tax office.


1+ months

Come to Hungary and open a current account

Accounts can only be opened in person. The bank may refuse a foreigner; therefore, an application can be submitted to several banks simultaneously.


1+ days

Register on the government services portal for business

Hungarian companies must be registered on the Company Gate portal to receive government services and notifications from government agencies.


2+ months

Register with the Hungarian Chamber of Commerce and Industry, HCCI

Company registration with the Chamber is mandatory. The annual membership fee is HUF 5,000, or €13.

The five most popular industries by the number of registered individual entrepreneurs and companies in Hungary are:

  1. Agriculture and forestry, fish farming — 25%.

  2. Services in the real estate market: realtor services, maintenance and property management — 12%.

  3. Professional, scientific and technical services — 11%.

  4. Wholesale and retail trade, vehicle repair — 10%.

  5. Construction — 8%.

Industrial production, administrative services and support, hotels and restaurants, IT, and communications take places from sixth to tenth. The number of organisations in these areas is approximately the same — 4%.

Among foreign entrepreneurs, the most popular activity is wholesale and retail trade and repair of automobile equipment, accounting for 29% of all companies with foreign capital.

The most popular areas of activity for starting a business in Hungary as a foreigner

The same areas of business are leading in growth rates

Hungary’s GDP has been increasing by an average of 3% per year, as shown by data from the last 10 years since 2014. During this time, the Hungarian economy has doubled.

Industrial production is the leader in terms of contribution to GDP, while agriculture is in 13th place.

The five economic sectors with the largest contributions to Hungary’s GDP, other than industrial production, are:

  • real estate services;

  • wholesale and retail trade;

  • auto repair services;

  • construction;

  • professional, scientific and technical services.

The fastest-growing industries are professional services, industrial manufacturing, trade, and the hospitality industry, each growing by an average of 0,5% annually since 2014. The service industry is growing at 2% annually, faster than the others.

Individual entrepreneurs and self-employed in Hungary

To register as an individual entrepreneur or become self-employed, a foreigner must first receive a residence permit in Hungary with the right to earn money — get employed or do business.

EU and EEA citizens have the right to conduct individual business in Hungary under the same conditions as Hungarian residents.

Forms of running an individual business include the following statuses:

  • an individual entrepreneur — egyéni vállalkozó;

  • a self-employed — önálló vállalkozó;

  • a sole proprietorship — egyéni cég.

A sole proprietorship is sometimes referred to as a "private company." A sole individual entrepreneur establishes it; a private company does not form a legal entity. The authorised capital can be any amount.

Hungary has 2.5 times more individual entrepreneurs and self-employed people than companies: 1,300,000 entrepreneurs and 500,000 companies. Very few sole proprietorships exist in Hungary — only 400 out of 600,000 individual entrepreneurs.

Regardless of the form of business, the entrepreneur’s responsibility for financial obligations is full. They are liable for obligations with all their property.

Registering an individual entrepreneur is the same as for a company: individual entrepreneurs are entered into a single register along with legal entities. Registering an individual entrepreneur is free.

Self-employed people receive separate taxpayer numbers for their activities; they are not entered into the register of individual entrepreneurs and companies.

Hungary business visa and Hungarian business residence: what’s the difference

Businesspeople can travel to Hungary under the Schengen visa and stay there for 90 days every six months. They may need a type D or Hungarian work visa if they wish to stay longer.

A type D visa is issued for long-stay trips. Foreign nationals wishing to work in Hungary for over three months must apply for a Hungary D visa. This type of visa allows foreigners to stay in Hungary for 1—3 years and to obtain a residence permit.

When applying for a Hungarian business visa, you first need to submit documents to the Hungarian consulate in your country of citizenship or residence and, in case of approval, enter Hungary to apply for residency.

Taxes and accounting in Hungary

The basic tax regime in Hungary is the same for companies, individual entrepreneurs, and self-employed people. Along with the basic regime, simplified tax schemes apply to the self-employed, small and medium-sized businesses.

The basic tax regime includes corporate, social, and municipal taxes:

  • a corporate tax — 9%;

  • a municipal tax — up to 2%;

  • a social tax — 13% of the wage fund.

Employees pay an income tax of 15% and contributions to the social insurance fund at 18,5%, a third of the total salary.

Accounting for profits and losses in the basic mode is carried out in detail, confirmed by documents such as invoices and receipts.

The simplified regime differs from the basic one in that profit is considered to be a certain share of revenue:

  • 60% — for any activity;

  • 20% — agriculture, manufacturing, construction, services;

  • 10% — retail trade.

Tax rates under the simplified regime are the same as under the basic regime.

The simplified regime applies to revenues of no more than 50 minimum wages per year — HUF 27.84 million, or €70,600. For retail trade, the limit is five times higher.

The simplified KATA regime involves a fixed monthly payment of HUF 50,000, or €127. Individual entrepreneurs and self-employed people use the KATA tax regime, which replaces all taxes and social security contributions.

The KATA regime is used by entrepreneurs who meet the following conditions:

  • revenue up to HUF 18 million, or €45,800 per year;

  • private clients only;

  • entrepreneurship is the main occupation.

VAT in Hungary is paid by companies and individual entrepreneurs with revenues of HUF 12 million, or €30,430 per year.

The standard VAT rate is 27%. Reduced rates have been established for certain categories of goods and services:

  • 18% on essential food products;

  • 5% on medical equipment, medicines, and heating.

The Value Added Tax is paid by the last VAT payer in the supply chain within the European Union. A company does not pay VAT if it sells goods wholesale to VAT-paying retailers in Hungary or another EU country.

Taxes of the company founder. The founder pays an income tax of 15% on dividends. If the founder acts as a director, they also pay 15% income tax and 18,5% in levies to the social insurance fund on wages.

Annual reporting and audit. Hungarian companies annually submit a financial report, which may be simplified, complete, or consolidated. The form and content of the report depend on the balance sheet amount, revenue, and number of employees.

A complete report includes a balance sheet, income statement, and cash flow statement.

The company publishes a simplified report if any two of the following three conditions are met:

  1. Revenue up to HUF 2.4 billion, or €6 million.

  2. The balance amounts to HUF 1.2 billion, or €3 million.

  3. Number of employees up to 50 people.

Hungarian companies conduct mandatory independent audits every year. An audit is not needed if the company’s net assets are less than HUF 300 million (€760,000) and the staff number is fewer than 50. Licensed independent auditors carry out these audits.

Labour legislation in Hungary

The Hungarian Labor Code is the main document that regulates the relationship between employees and employers. The Code is drawn up considering provisions common to all EU countries. In Hungary, judicial practice has been developed to interpret the law requirements and employment agreements in favour of the employee.

An employment contract is concluded either indefinitely or for a specified period. The contract is recognised as unlimited-term; even if this is not explicitly stated, it is sufficient that the validity period of the employment agreement is not indicated.

Work permit for foreigners. EU and EEA citizens have the right to work in Hungary without additional licences. Citizens of third countries receive a residence and work permit.

The company contacts the Employment Service to hire a foreigner from outside the EU and EEA. The service confirms that there are no unemployed Hungarian citizens with the qualifications required by the employer.

The employer independently checks the foreign workers' documents, such as residence permits or residence permits for seasonal workers and work permits in Hungary.

The standard working time is 40 hours a week: 5 days a week for 8 hours. You are allowed to work a maximum of 250 hours of overtime per year.

Main things about Hungary residence by business registration

  1. Foreigners can open companies in Hungary without restrictions. However, only Hungarian residents can become individual entrepreneurs.

  2. Foreign founders of Hungarian companies get residence permits. The applicant for a residence permit must confirm that the business provides them with an income of at least €1,500.

  3. The most popular form of business in Hungary is the LLC — Kft. The minimum authorised capital for a limited liability company is HUF 3 million, or €7,700.

  4. Hungarian companies pay a corporate tax of 9%, a social tax of 13% of the wage fund, and a municipal business tax of 2% of profits. Entrepreneurs can choose between a basic taxation system with a detailed accounting of income and expenses or a simplified one.

  5. Most companies with foreign capital in Hungary operate in trade and services in the real estate market.

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Will you obtain Hungarian business residency?

Practical Guide

Will you obtain Hungarian business residency?

Frequently asked questions

  • What is the entrepreneur residency program in Hungary?

    It is a program type when foreigners obtain Hungary residency to open a company. A residence permit is issued for a year with the right to extend once for 2 years. Then, the foreigner leaves the country and can obtain a residence permit with the same company again.

  • How can a foreigner start a business in Hungary?

    Foreigners open companies in Hungary under the same conditions as Hungarian citizens. At the same time, the founders of Hungarian companies have the right to obtain a Hungarian residence permit.

  • Can I take my family on a business residence permit?

    Yes, but not immediately. Spouses, children, and parents can receive residency after a year when the main applicant’s residence permit is renewed.

  • How many directors can I have in my company? Can they all get residency in Hungary?

    It depends on the company type. For example, the highest governing body of Kft, the meeting of founders, elects one or more company directors who manage the business.

    But the directors never get residence permits. It can be only the founders.

  • Can I work in Europe with a Hungarian residence permit?

    A residence permit in Hungary does not give the right to work in another EU country, but a Hungarian company can trade and provide services within the EU. Foreign founders of a Hungarian company receive a residence permit in Hungary.

  • How long does it take to obtain a Hungary residence permit?

    The period for obtaining a residence permit in Hungary depends on the type of residence permit. Obtaining a residence permit for a digital nomad takes 3 months, and a residence permit by investments takes 6 months.

    It also takes 6 months to obtain a residence permit in Hungary to open a company.

  • What are the benefits of a Hungary residence permit?

    A residence permit in Hungary allows you to live in an EU country with a low cost of living and travel around the Schengen area without visas.

    A residence permit in Hungary for opening a company allows you to conduct business in the European Union. At the same time, it is not necessary to live in the country permanently: it is enough to spend 90 days in Hungary over six months.

  • How much does opening a Kft or Rt company in Hungary cost?

    The minimum authorised capital of a company in Hungary is HUF 3 million, or €7,700 for an LLC (Kft), HUF 5 million, or €12,700 for a joint-stock company (Rt). Additionally, the founder pays for company registration in Hungary.

  • How to successfully conduct business in Hungary?

    Choose the most profitable activity, for example, in Hungary’s trade sector. Almost a third of all companies have foreign founders. Second in popularity are services in the real estate market: real estate services, maintenance, and property management.