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Confidus Solutions

Worldwide incorporation partner

The Offshore company limited liability company (LLC) and corporation are very simple to set up and upkeep. Neither corporate tax nor withholding tax are levied on assets or income originating outside of the Jurisdiction of Registration.

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Company Formation

Accounting services

Bank account opening

Incorporation in Hungary

Hungary

Hungary welcomes international business opportunities. With Fast and predictable Vat obtaining and politics Hungary become one of most popular EU VAT company destinations. It is situated in the heart of Europe, which makes the country optimal for manufacturing, services and logistics. Hungary is the ideal base for people who are planning international trading business developments.

Popular applications

  • VAT trading company
  • holding company
  • royalty company

Corporate requirements

  • 1 Director required (only private person) – can be citizens of any country.
  • Minimum share capital huf 500.000.(around €2,000)
  • Local Registered Office address required.
  • Local business tax is 1-2%, and is calculated simultaneously with the corporate income tax. However, there are exceptions, for example, royalty revenues are completely exempted.

Bank account introduction

Hungarian corporate bank account opening with directors one day personal visit is relatively easy process.

Company transfer and bank account may be arranged remotely (client must present Power of Attorney and other company documents certified at Hungarian embassy or local notary).

Timescales

  • New company set-up is arranged within 1-3 business days.
  • Company registration number and VAT number are issued simultaneously
  • Minimum 1 week for bank account activation upon receipt of required documents and information.

Accounting requirements

VAT declarations are usually filed quarterly.

All legal entities must file their Annual Report with the Court of Registration within 150 days after the balance sheet date. The managing director of the entity must sign the report.

The general rule is that all companies must appoint independent auditors. Emptions: companies with less than HUF 100 million average annual sales over the past two years (pro-rata annual sales in the first accounting year) and no more than 50 employees do not have to appoint an auditor.

How do I proceed?

In order to commence incorporation and account introduction, we will require the following:

  • Detailed description of company work with completed Company form.
  • Certified passport copy + utility bill not older than three months of Beneficial Owner, Directors and Shareholders.
  • For corporate shareholders – certified corporate documents with translation. Ask us for details.
  • 100% of the company formation cost.

Taxation

The corporate tax is 10 percent of the positive tax base up to HUF 500 million, and 19 percent of the remaining portion of the tax base. Hungarian company can obtain Tax residence certificate in order to use double tax treaties. Local business tax is 1-2%, and is calculated simultaneously with the corporate income tax. However, there are exceptions, for example, royalty revenues are completely exempted.

POPULAR PACKAGE

  • Shelf company with EU VAT and bank account set-up
  • Domicile/Legal address
  • Accounting services (up to 10 docs per month)
  • VAT reports

Taxation

In Hungary, dividends received from EU countries are exempt from corporate income tax as well as dividends paid to foreign shareholders (even offshore) of the Hungarian company.

Hungary has a Holding Regime. Participation exemption is applied to dividends received from subsidiaries if the following requirements meet:

  • Participation is at least 30%
  • Participation is held for at least 1 year
  • Participation is declared to Hungarian Tax authorities within 60 days of the acquisition
  • A subsidiary is not a controlled foreign corporation. Controlled Foreign Corporation is a company at least 10% held by Hungarian private resident.

Key advantages

  • 0% Corporate Tax on incoming dividends received from EU or Treaty subsidiaries
  • 0% Withholding Tax on outgoing dividends distributed to an offshore company
  • 0% Capital Gains Tax on sell out of declared subsidiaries

Royalty structure

Hungary offers one of the most interesting royalty regime in EU as only 50% of received royalty income is taxed for corporate income tax. Definition of royalty is very wide making Hungary an attractive jurisdiction for holding and licensing rights associated with intellectual property. Royalty definition includes payments related to: patents, other industrial intellectual property and know-how exploitation, trademarks, trade names, use of business secrets, software, database, film and other audio-visual works, artistic and other works protected by copyright.

Key advantages

  • 10%/19% Standard Corporate tax applies to only 50% of royalty income.
  • No Local Business Tax applies to Royalties.
  • 0% Capital Gains tax on sale of IP, if Participation Exemption applies.
  • 0% withholding tax on royalties paid to a legal entity including offshore. Or, 16% withholding tax on royalties paid to private person, which can be reduced under the tax treaty.