Hungary's company rules: quick facts
- Entity
- Limited liability company (Kft)
- Tax model
- Corporate tax on profit, 9% Source: net.jogtar.hu, checked September 29, 2026. Act LXXXI of 1996 on corporate tax and dividend tax, section 19: 'A társasági adó mértéke 9 százalék' (text in force February 28 to September 30, 2026, Hatályos Jogszabályok Gyűjteménye)Headline corporate tax rate
- Tax on $100,000 of profit kept in the company
- 9% to 11.14% Source: net.jogtar.hu, checked September 29, 2026. $100,000 profit = HUF 32,264,000 at HUF 322.64 per USD (ECB, 2026-09-28); revenue at 15% costs = $117,647 = HUF 37,957,000. Total HUF 3,594,577 = 11.14%. The low end is a seat in a municipality with no local business tax
- Tax on $100,000 of profit paid out to a non-resident owner
- 22.65% to 24.47% Source: net.jogtar.hu, checked September 29, 2026. HUF 3,594,577 company taxes, then the HUF 28,669,423 left is paid to the non-resident individual owner. Dividend income is taxed at 15% (Act CXVII of 1995 on personal income tax, sections 8(1) and 66(1)), withheld by the company: HUF 4,300,413. Total HUF 7,894,990 = 24.47%. With no local business tax: 9% + 15% of 91% = 22.65%. The 13% social contribution tax on dividends applies only to people insured in Hungary and is not modeled
- Dividend withholding for a non-resident owner
- 15% Source: net.jogtar.hu, checked September 29, 2026. Personal income tax at 15% (section 8(1)) on dividend income (section 66(1)) paid to an individual; dividends paid to companies bear no withholding
- Formed without visiting
- Yes
- Stripe available
- Yes Source: stripe.com, checked September 29, 2026
- Bank or EMI account
- Workable
- Audit required
- No
- EU list of non-cooperative jurisdictions
- Not listed Source: taxation-customs.ec.europa.eu, checked September 29, 2026
- FATF grey list
- Not listed Source: taxation-customs.ec.europa.eu, checked September 29, 2026
- Economic substance rules
- No
Which Hungarian company a non-resident forms: the Kft
Non-residents form a limited liability company, the Kft (korlátolt felelősségű társaság), with 1 managing director of any nationality, living anywhere, and a registered seat in Hungary. Share capital must be at least HUF 3 million (about $9,300), with each member putting in at least HUF 100,000 (about $310), under section 3:161 of the Civil Code.
That capital stays in the company, and the articles can let you pay it in after registration (section 3:162). Until you do, your dividends are set against the unpaid capital, the balance falls due when the 2nd full year's accounts are approved, and you answer for company debts up to the unpaid amount.
No audit is needed while net revenue averages no more than HUF 600 million (about $1.86 million) and staff no more than 50 (Accounting Act, section 155(3)).
How a Hungarian Kft is taxed: 9%, local business tax and 15% on dividends
Corporate tax is 9% of profit, kept or paid out. The municipality of the registered seat adds a local business tax of at most 2% of net revenue less goods sold, subcontractors and materials. Salaries, rent and software are not deducted, so in Budapest it runs close to 2% of revenue: about HUF 759,140 (about $2,350) at $100,000 of profit.
Small companies can cap it. With up to HUF 25 million (about $77,500) of revenue, a company may pay on a fixed base of HUF 2.5 million to HUF 8.5 million (about $7,750 to $26,300) (section 39/A). At 2%, that is at most HUF 170,000 (about $527) a year.
Dividends paid to you are taxed at 15%, withheld by the company. A treaty between Hungary and your country can cut that with a residence certificate, but not for US owners: the US and Hungary treaty stopped applying to taxes withheld at source on January 1, 2024.
The optional small business tax, KIVA, charges 10% in place of corporate tax and the social contribution tax on wages, on a base made up mainly of profit paid out and staff costs, so kept profit is taxed only when it leaves. It is open to companies with up to 100 staff and HUF 6 billion (about $18.6 million) of revenue.
VAT is 27%, and turnover up to HUF 20 million (about $62,000) can stay exempt from January 1, 2026. Services sold to business customers abroad are generally not charged Hungarian VAT.
David's note
I would only form a Kft as a non-resident if Hungary is where the business will really be run, or where you plan to move. Run from abroad, the 9% is what your home tax office looks at, while the HUF 3 million (about $9,300) of capital, the lawyer on every filing and the 15% on dividends are what you pay for it.
Cost and timeline to set up in Hungary
| Court registration duty for a KftOfficial fee | HUF 0 (about $0) Source: net.jogtar.hu, checked September 29, 2026. Act XCIII of 1990 on duties, section 45(1a): the procedure to register a limited liability company is duty-free (text in force September 27 to 30, 2026) |
|---|---|
| Setup, all inMarket range, checked Sep 2026 | $200 to $1,950 |
| Running cost per year, all inMarket range, checked Sep 2026 | $1,700 to $3,000 |
Official fees come from the government or registry schedule. Market ranges cover formation and yearly upkeep through a provider, including a registered agent and filings. Timeline: A Hungarian lawyer must represent the company in registration (Company Registration Act, section 32) and files everything electronically with the court of registration, so the founder does not need to attend court. The simplified procedure with template articles is usually decided within days.
How to register a company in Hungary from abroad
You never appear in court: legal representation is mandatory in company registration (section 32(4) of the Company Registration Act), so a Hungarian lawyer files electronically and receives the court's decisions. Before paying, settle how the lawyer will identify you and collect your signatures from abroad, since that decides whether you travel.
Opening a Hungarian Kft as a non-resident
- Hire a Hungarian lawyer to prepare the articles and represent the company in registration.
- Secure the registered seat: an address you rent or own, or a registered seat service.
- Decide how the HUF 3 million (about $9,300) of capital is paid: in full before registration, or deferred under the articles.
- Sign the articles and the managing director's acceptance. Template articles put the company in the simplified procedure, and the registration is duty-free.
- Wait for the court. It decides within 1 working day of the tax authority reporting the tax number in the simplified procedure, and within 15 working days in the standard one.
- Open the domestic payment account within 15 days of the tax number being issued.
- Choose the tax regime, corporate tax or KIVA, and register for local business tax with the seat's municipality.
Hungary sets no nationality or residence rule for owners or the managing director. The exception is the White Card for remote workers: it goes only to people who pursue no gainful activity in Hungary and hold no share in a Hungarian company, so a White Card holder cannot own a Kft.
Hungarian company annual filings and deadlines
For a calendar-year Kft almost everything lands on May 31: the annual report, the corporate tax return and the local business tax return. The rest follows the payouts.
Yearly filings for a Hungarian Kft
| Filing | Filed with | Deadline | Cost of missing it |
|---|---|---|---|
| Annual report with the dividend resolution, made public | Company information service | The last day of the 5th month after the year end (May 31) | A 30-day call from the tax authority, then HUF 200,000 (about $620) and a 2nd call, then the tax number is deleted and the court asked to dissolve the company |
| Corporate tax return and the year's balance of tax, or the KIVA returns | National Tax and Customs Administration (NAV) | The last day of the 5th month after the tax year (May 31) | A 15-day call, then HUF 200,000 (about $620), then HUF 500,000 (about $1,550) for a company |
| Local business tax return | Municipality of the registered seat | The last day of the 5th month after the tax year (May 31) | The same default penalties, from the municipality's tax office |
| Monthly return and payment for the 15% withheld on a dividend | NAV | The 12th of the month after the payout | The same default penalties |
| VAT returns, once registered for VAT | NAV | The 20th of the month after each monthly or quarterly period | The same default penalties |
| Your own tax return, with the dividends | The tax authority where you live | Your country's deadline | Your country's penalties and the tax itself |
Opening a bank account for a Hungarian company as a non-resident
A Hungarian account is part of the setup, not an option: every Hungarian legal person must hold at least 1 domestic payment account, opened within 15 days of receiving its tax number (section 114(1) of the Act on the Rules of Taxation), and the provider reports each account the company opens or closes to the tax authority.
Hungarian banks generally want to identify the managing director in person, so the bank is the step most likely to need a trip. Book it early, because the 15 days start with the tax number.
An EU fintech or electronic money account is the usual second account for a founder abroad, for invoicing in euros or dollars. Hungary exchanges account information under the OECD Common Reporting Standard and its FATCA agreement with the US, so the company's accounts are visible where you live.
Where a Hungarian company's profit is really taxed
The 9%, the local business tax and the 15% only tell the whole story while Hungary is the only country with a claim. A company run from your home office abroad can also be treated as resident in that country, or as having a permanent establishment there, and at 9% most EU controlled foreign company rules treat it as low-taxed. At $100,000 of profit, HUF 32,264,000, the owner situations look like this.
Tax on $100,000 of Hungarian Kft profit (HUF 32,264,000) by owner situation
| Owner situation | Hungarian tax | What your country adds |
|---|---|---|
| Lives in Hungary and runs it there | 9% plus up to 2% local business tax; 15% on dividends plus 13% social contribution tax up to the yearly cap | Nothing: Hungary is your country |
| Lives in a high-tax country and runs it from home | Up to 11.14%, HUF 3,594,577 (about $11,100), as a Hungarian company | Corporate tax on the profit if the company is treated as resident there or as having a permanent establishment, with the treaty deciding which country goes first |
| Lives abroad and keeps the profit in the company | Up to 11.14% | Controlled foreign company rules can tax the kept profit in your hands, because 9% counts as low tax |
| Lives abroad and pays all the profit out | 24.47%, HUF 7,894,990 (about $24,500), including the 15% withheld | Tax on the dividend, usually with a credit for the 15% withheld but none for the company's 9% |
| Has no tax residence anywhere | 22.65% to 24.47%, depending on the seat's local business tax | Nothing on paper, but banks will ask where you are tax resident |
The first row is the case the Kft suits best, and moving to Budapest puts you under Hungary's own 15% flat income tax as a resident, with the Kft's dividends taxed alongside it. In every other row, the tax that decides the result is the one your own country charges.
Keeping profit in a 9% Kft while living in a high-tax EU country
Leave the profit inside a Kft you run from home in a high-tax EU country, and that country has 2 ways in: tax the company as managed there, or tax the kept profit in your hands under its controlled foreign company rules. Either way the 11.14% you budgeted becomes your home rate, and Hungary still withholds 15% when you pay out.
A non-resident's Kft, set up right and wrong
Works
You live in Hungary, or you budget for your home country taxing the Kft's profit. The domestic account opens within 15 days of the tax number, the returns and annual report go in by May 31, and each dividend's 15% is withheld and reported by the 12th of the next month.
Fails
You live in a high-tax country, run the Kft from your laptop at home, keep the profit inside because the rate is 9%, skip the local business tax because there is no office, and declare nothing where you live.
