Foreign Investments in Hungary

(The text is of informal character only and does not substitute studying of the relevant Law Act.)


Foreign investments have been given full protection and legal safety since 1988 in Hungary. The most important elements of this protection are equal treatment of natives and foreigners concerning foundation of  companies, obtaining company shares, protection of ownership, and free repatriation of profit and capital after taxation, etc.

Source: Law Act 1988: XXIV

Foundation of a company

Foreign natural persons and organizations registered according to their domestic law may establish companies in Hungary without any restriction and authority permission (also as oneman-company if the foundation thereof is allowed by the Company Law at all), may obtain shares of Hungarian companies and establish affiliates as well as commercial representations.

The most important conditions of the foundation are
  • deed of association duly signed by a lawyer or notary public
  • foundation capital - in case of a general partnership and a limited partnership there is no legal minimum, in case of a limited liability company the minimum level amounts to HUF 3.000.000, in case of a company limited by shares HUF 5.000.000, a  company limited by shares registered on the Stock Exchange HUF 20.000.000
  • lawyer's representation in the registration proceedings


Foreign persons may be manager of a company established under Hungarian lawy without any restriction and authority permission the exemption from labour permission included.

The legal regulation concerning the types of companies is essentially based on solutions applied in Europe, with some differences in the details.

A company starts to exist by force of registration by the Registration Court. The registration in electronical and takes an avarage time of  10-15 days.

Avarage foundation costs
  • registration fee, min. HUF 15.000, max. HUF 600.000 depending on company form and type of registration process
  • fee of publishing HUF 3.000

Source: Law Act 2013: V. tv.
                           2006: V. tv.
                           1990: XCIII                            
                          
Foundation of a branche office

A company registered in abroad may establish a branch office in Hungary. There is no capital minimum in such cases but the founder shall take the capital being necessary for the activity at the disposal of the branch office continously. With the exeption of representation activity - the branch office may show an enterprising activity under the laws regulating the activity of domestie enterprises and may conclude contracts to the favour of the founder.

The branch office and the founder bear general and unlimited liability for the activity of the branch office.

The persons employed with the branch office are in legal relation to the founder. Foreign employees employed with the branch office are governed by the strict rules of employment in Hungary.

The branch office starts to exist by force of registration by the Registration Court.

Registration costs:
  • Registration fee: HUF 50.00
  • Fee of publishment fee: HUF 5.000
Foundation of a representation office

A company registered in abroad may establish a representation office in Hungary.

The founder shall continuosly provide the capital being necessary for the activity of the representation office.The representation office may prepare contract drafts to the favour of  the founder, show activity in information and promotion but no indepent economic activity. The founder bears unrestricted and general liability for the activity of the representation office.

The representation office starts to exist by registration with the Court of Register.

Registration costs:
  • Registration fee: HUF 50.00
  • Fee of of publishing: HUF 5.000
 

The persons employed by the representation office are in legal relation to the foreign company.

For foreign persons employed with the representation office the strict law rules of the Hungarian Labour Code are to be applied.

Beyond the above mentioned expenses following costs may arise:
  • lawyer's fee as agreed
  • expenses in connection with translation, company name search, public notary fee etc.

Source: Law Act 1990: XCIII