In your current home country, an exit tax may be triggered on unrealised gains. Timing and asset structuring should therefore be planned early
Anyone who becomes tax resident in Hungary is generally subject to a flat income tax rate of 15% on taxable income
If the company is effectively managed from your home country, the local tax authority may assume the place of effective management and tax the company in your home country
If it is a passive structure under your control, CFC rules may apply and profits may be attributed to you personally
Hungary is an EU Member State in Central Europe with around 9.6 million inhabitants. The national currency is the Hungarian forint (HUF). 100% foreign ownership is permitted, and since 2019 there have been no currency controls. For HNWIs, Hungary often serves as an EU-compliant platform for operating companies or holding structures.
Corporation tax is a flat 9%, making it one of the lowest in the EU. In addition, a municipal business tax of up to 2% may apply, depending on location and business model. With the correct structuring, no withholding tax is levied on dividends, interest and royalties paid to foreign corporations. There is no wealth tax. Hungary also has an extensive double taxation treaty network.
For individuals, a flat income tax rate of 15% generally applies. Capital movements are free, and profit distributions are usually straightforward with clean structuring. For non-resident shareholders, however, CFC rules and the place of effective management remain key risk factors if substance and decision-making structures do not align.
A Hungarian Kft. generally requires a minimum share capital of 3,000,000 HUF, around EUR 8,000, and can usually be incorporated within one to two weeks. A local managing director is not legally mandatory; however, governance, substance and clear decision-making structures are crucial. An EU-compliant VAT registration is possible, but it requires robust documentation. Hungary is not on any EU blacklist and offers comparatively straightforward visa and residence options for foreign entrepreneurs. Bank accounts are available, but account opening is strongly compliance-driven and requires a clear source of funds as well as a plausible business model.
Anyone wishing to use Hungary as a tax or holding location should run the company like a genuine EU business. Resolutions, contract drafting, invoicing and actual control must be consistent. Otherwise, POEM, CFC or anti-abuse rules can neutralise the tax benefits.
Contact us for an individual analysis and, where appropriate, better alternative structuring options.
| Tax Burden | Banking | Reputation | Bureaucracy | Legal Security | Costs | |
|---|---|---|---|---|---|---|
| USA | 21-0% |
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from EUR 1,900 |
| Singapore | 0% |
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from EUR 2,950 |
| Hong Kong | 0% |
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from EUR 1,900 |
| Cyprus | 15% |
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from EUR 1,900 |
| Malta | 5% |
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from EUR 2,500 |
| Ireland | 12,5% |
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from EUR 1,950 |
| Trust | 0% |
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from EUR 4,900 |
| England | 25-19% |
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from EUR 1,000 |
Your country of residence may impose tax and reporting obligations for foreign business activities and dividend income, in some cases even if profits are not distributed.
Depending on your personal situation, a suitable holding structure may be required to comply with tax rules and avoid unnecessary tax risks.
To determine which jurisdiction and structure best meet your requirements, please use the contact form and describe your plans in as much detail as possible.
Our advisers will be happy to review your case and advise you accordingly.
