Company formation in Hungary
Today, Hungary offers the most friendly terms of registration, management and taxation of companies in continental Europe. In 2017, Hungarian companies will pay the lowest corporate income tax in the EU (9%). Besides, Hungary offers excellent conditions for the creation of holdings and for operations with intellectual property (royalties). Together with the automatic registration of VAT number (which is very important when trading in the EU), it makes Hungary one of the best countries for business.
Currently, the income tax in Hungary for companies whose earnings do not exceed HUF 500 million (about 1.8 million euros) is just 10% . It is one of the lowest rates in the EU. Also in Hungary a VAT number issued to the company during the registration and there is no need for additional expenses (office rent, hiring employees, etc.) to maintain it. This allows easy trading activities throughout the EU using the VAT rate of 0%.
Hungary offers excellent conditions for holding companies. Dividends received from companies registered in the EU are not subject to income tax. Subsidiaries are also exempted from dividend taxation when the following conditions are met:
- The company owns at least 30% of the shares
- The company owns the capital for at least 1 year
- The ownership is declared to the tax office within 60 days after purchase
- Subsidiaries are not "controlled foreign corporations" (these are companies in which at least 10% owned by a resident of Hungary).
Hungary offers one of the most attractive mode of taxation of royalties in the EU, as only 50% of income derived from royalties is subject to corporate tax. This includes payments for the use of patents and know-how, trademarks, the use of trade secrets, software, databases, movies and other audiovisual works of art and other works protected by copyright. Also, companies are exempt from tax on capital gains from the sale of intellectual property, in the case of certain conditions. 0% on royalties paid to a foreign entity even offshore company makes Hungary extremely attractive for sublicensing.
Describe us your project and we will take all the paper work on:
- We find the optimal solution to maintain your successful business in Hungary
- We will register the company and VAT number (VAT)
- We will help you to reduce the tax burden
- We will provide full accounting and legal support as we appreciate your time and money!