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gnud

Entrepreneur
Ok, so I'm in Hungary, got a Hungarian company.

So far my impression is that the country loves bureaucracy and nothing is simple. You have 3 different ID cards, Registration card, Address card, Tax card, and probably some more that I haven't encountered so far. They take weeks to arrive and without them often you can't do anything. Can't form a company, can't open a bank account. Maybe you'll find some service provider that's flexible, but often not.

Everywhere they ask for the smallest personal details like mother's maiden name, and they keep it on your file. In company activity upon registration you need to go into detail about what you'll do.
Incorporation takes 24 hours, but waiting for a corporate bank account takes days, and you need all your Hungarian IDs, you need a proof that it's a legit activity and a legit company like utility bills, even though it's completely new. And then it has to go to the government for approval. Yes, that's just for opening a corporate bank account. And every company has to have a bank account. Can't use just an EMI. Without a bank account a company is useless, operating without a bank account is illegal.

I thought in 2-3 days I'll be ready to go, since incorporation is so fast, and opening a bank account is no big deal, but apparently not here.

So I've been wondering if anyone has experience running a company in Hungary? What's more in store for me here?
I'm very interested to know if they honor the EU parent-subsidiary directive and the double tax treaties in regards to dividends. And just how complex the process of changing a company ownership from a natural person to a legal entity is?
 

Sols

Staff member
Mentor Group Gold
Not much direct experience, but from second hand accounts I can confirm that this sounds similar to the complaints I have heard about doing business in Hungary. There's a reason Hungary isn't the hoppin', happenin' financial center its tax laws on the surface would have you believe. When you factor in ease of doing business and for example conversion to HUF for certain payments (taxes), the extra bit of tax or work to make for example Cyprus or Malta work suddenly don't seem so bad.

Sorry to hear about your situation, hope it gets better or you find a different solution.
 

orangekangaroo

Active Member
Ok, so I'm in Hungary, got a Hungarian company.

So far my impression is that the country loves bureaucracy and nothing is simple. You have 3 different ID cards, Registration card, Address card, Tax card, and probably some more that I haven't encountered so far. They take weeks to arrive and without them often you can't do anything. Can't form a company, can't open a bank account. Maybe you'll find some service provider that's flexible, but often not.

Everywhere they ask for the smallest personal details like mother's maiden name, and they keep it on your file. In company activity upon registration you need to go into detail about what you'll do.
Incorporation takes 24 hours, but waiting for a corporate bank account takes days, and you need all your Hungarian IDs, you need a proof that it's a legit activity and a legit company like utility bills, even though it's completely new. And then it has to go to the government for approval. Yes, that's just for opening a corporate bank account. And every company has to have a bank account. Can't use just an EMI. Without a bank account a company is useless, operating without a bank account is illegal.

I thought in 2-3 days I'll be ready to go, since incorporation is so fast, and opening a bank account is no big deal, but apparently not here.

So I've been wondering if anyone has experience running a company in Hungary? What's more in store for me here?
I'm very interested to know if they honor the EU parent-subsidiary directive and the double tax treaties in regards to dividends. And just how complex the process of changing a company ownership from a natural person to a legal entity is?
Anymore updates. I have a friend interested in opening a Kft.
 

gnud

Entrepreneur
Anymore updates. I have a friend interested in opening a Kft.

I can operate, but it’s still not completely finished. I got a company, a bank account, an accounting software, an accountant. I’ve already received money from a client, and had some expenses in the company name (so far paid for personally, because I don’t have a bank card yet).

So I’m still waiting for the address card, the tax card, and the bank card. The address card is super important because only that is being accepted as a proof of address / residence everywhere. You can bend the rules a bit and they can accept some other document with your address instead, but not everywhere. For example LOGOSZ, the main incorporation provider refused to form a company without it. After a frantic search I found one lawyer who was willing to risk it without it, we checked in the governmental database and I was already there, so we just risked it and it worked out. Opening brokerage accounts also proved to be impossible without it.

I haven’t got my TAJ card and number, because to do a registration you need to prove you’re not insured anywhere else in the EU, there’s an EU form for that. Once you become a part of the Hungarian system you need to pay minimal charges every month even if you don’t pay yourself a salary. I told my accountant I won’t do it and will keep being insured in the original country, because of the double residency, then I won’t have an obligation here. But I wonder how will that work administratively, I haven’t been able to figure out yet what forms do I need to send where and if there will be any reporting between countries.

They have here a government gateway website for communication with the administration, you need to register at the local city hall.

Then you need to be a member of the chamber of commerce, it’s 5000 HUF per year.

Almost all registrations are being done in person. Things are not moving exactly fast, but it’s not terribly slow either. They love forms and IDs. I will have like 5 Hungarian IDs. It’s been 3 weeks and I’m still not done with everything.

And I sorted out the things with the landlord. Not sure if he’s stupid or it was an attempt for a scam, but whatever.

Opening a company bank account took 4 days. One bank made multiple mistakes, was slow but didn’t bother me with any additional proofs. Second bank wanted me to prove it’s a legit business because they didn’t like the company seat being in a virtual office. So I went with the incompetent one, they did no due diligence.
 
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gnud

Entrepreneur
—————————
yeah, after a consideration I’ve decided to do also the social security and healthcare registration and get the TAJ number too, to solidify the taxation anchoring in Hungary in case of future problems and to avoid alerting anyone by explicitly admitting a cross-border arrangement. it’s about 120 EUR / month (minimal contributions)

According to other articles I found no EU form is needed, so it looks like there’s no need to prove a lack of insurace elsewhere to gain entry into the Hungarian system.

It’s probably not correct to be registered for social security and healthcare in 2 countries, but who’d complain when they’re receiving money … ?
 
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gnud

Entrepreneur
Just to show the situation with paperwork: now I'm applying for the TAJ number (health and social insurance). I have to fill 3 forms, all with the same information, then tomorrow I have to deliver it personally to the NEAK office, spend there 3 hours, after which I will hopefully receive the TAJ number, and after a few days or weeks I will receive the TAJ card. And it all depends on if I will finally after 2 weeks receive the Address card tomorrow morning, because without it they won't accept the 3 forms.

Applying for the Address card 2 weeks ago was again 1 form, multiple supporting documents, and 2 hours of waiting at the immigration office. There I got the EEA registration card too, on the spot. But for the Address card I need to wait weeks. The EEA Registration card is virtually useless, even though it's issued by a state institution and has your name, address etc. and their official stamp, signature and ID number. Simply no one recognizes it as a valid proof of address.

Everything is of course in Hungarian and virtually no one in those institutions speaks English or any other language, but at least they try to communicate somehow and won't ignore you.
I'm very grateful for Google Translate and DeepL for making this possible LOL
 
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gnud

Entrepreneur
elaborate?

I have a question, how did you open the bank account? it's not an EMI right?

No, it's a legit bank account with a big known multinational Europan bank.
I simply scheduled and appointment, walked in, signed forms, waited 4 days and that's it.
It's a corporate bank account, not personal. Every company in Hungary is obliged to have a bank account, using only an EMI is not allowed.
Personally I will use only Wise, to avoid having to lie about tax residency, and thus committing no fraud. Accounts of active companies don't fall under the CRS and banks won't ask you for your personal tax id or tax residency. They only wanted my proof of residency in Hungary, and were very willing to not insist on the Address card, this was one of the rare cases where the EEA registration card was accepted. Even in the second, more diligent bank, they didn't require the Address card.


The bank account is a legal obligation, so that the state has a direct access to your finances and knows everything about your company. Whatever you buy on the company name is reported to the state, and you have an obligation to ensure that it's reported to the system through the accounting software almost immediately. When I signed up for the accounting software I found there already multiple items that I paid for days ago. Even personally you're in a state database and they know a great deal about you, as I saw during the incorporation with the lawyer.

Using an EMI is allowed, but only as an addition, not as a main account.
 
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marzio

Mentor Group Gold
I haven't found any specific page that talks about that, that's why i'm asking for a source.
 

gnud

Entrepreneur
https://www.loyensloeff.com/media/478645/ch-crs-part-ii.pdf

1644217502258.png


I've received the Address card. It took exactly 2 weeks.
 
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hilltop781

New member
I can operate, but it’s still not completely finished. I got a company, a bank account, an accounting software, an accountant. I’ve already received money from a client, and had some expenses in the company name (so far paid for personally, because I don’t have a bank card yet).

So I’m still waiting for the address card, the tax card, and the bank card. The address card is super important because only that is being accepted as a proof of address / residence everywhere. You can bend the rules a bit and they can accept some other document with your address instead, but not everywhere. For example LOGOSZ, the main incorporation provider refused to form a company without it. After a frantic search I found one lawyer who was willing to risk it without it, we checked in the governmental database and I was already there, so we just risked it and it worked out. Opening brokerage accounts also proved to be impossible without it.

I haven’t got my TAJ card and number, because to do a registration you need to prove you’re not insured anywhere else in the EU, there’s an EU form for that. Once you become a part of the Hungarian system you need to pay minimal charges every month even if you don’t pay yourself a salary. I told my accountant I won’t do it and will keep being insured in the original country, because of the double residency, then I won’t have an obligation here. But I wonder how will that work administratively, I haven’t been able to figure out yet what forms do I need to send where and if there will be any reporting between countries.

They have here a government gateway website for communication with the administration, you need to register at the local city hall.

Then you need to be a member of the chamber of commerce, it’s 5000 HUF per year.

Almost all registrations are being done in person. Things are not moving exactly fast, but it’s not terribly slow either. They love forms and IDs. I will have like 5 Hungarian IDs. It’s been 3 weeks and I’m still not done with everything.

And I sorted out the things with the landlord. Not sure if he’s stupid or it was an attempt for a scam, but whatever.

Opening a company bank account took 4 days. One bank made multiple mistakes, was slow but didn’t bother me with any additional proofs. Second bank wanted me to prove it’s a legit business because they didn’t like the company seat being in a virtual office. So I went with the incompetent one, they did no due diligence.
Hey gnud, can you please get in contact regarding your accountant. I'm on the Hungarian Kft journey and I have yet to find a competent accounting office.
 

clemens

Corporate Services
Mentor Group Gold
Hey gnud, can you please get in contact regarding your accountant. I'm on the Hungarian Kft journey and I have yet to find a competent accounting office.
also interested, post a link to that accountant if you don't mind??
 

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