Hungary continues to gain momentum as a prime destination for international companies entering the European Union. With its strategic location, low corporate tax rate, and transparent business environment, Hungary offers significant advantages to foreign investors looking to establish a presence in Central Europe.
Whether you’re planning a long-term expansion or a temporary local operation, this guide outlines everything you need to know about setting up a subsidiary (Kft) or a branch office in Hungary — including legal structures, setup steps, costs, and compliance.
Foreign companies typically choose between two primary legal forms when entering the Hungarian market:
(A) Subsidiary – Kft (Korlátolt Felelősségű Társaság)
A subsidiary is a Hungarian-registered legal entity separate from the parent company. The Kft (private limited company) is the most commonly used structure for foreign-owned businesses.
Why choose a Kft?
A Kft is ideal for businesses planning to operate independently in Hungary, hire local staff, and access local and EU support schemes.
(B) Branch Office – Fióktelep
A branch office is an extension of the foreign company, operating under the parent company’s name and legal identity.
When is a branch the right choice?
However, branch offices are not eligible for many local grants and cannot build the same level of operational autonomy as a Kft.
Feature | Subsidiary (Kft) | Branch Office (Fióktelep) |
Legal Personality | Separate entity | Part of foreign parent |
Liability | Limited to investment | Full parent liability |
Capital Requirement | HUF 3 million (€7,400) | None |
Grants & Subsidies | Eligible | Typically not eligible |
Ideal For | Long-term operations | Temporary or project work |
Feature | Subsidiary (Kft) | Branch Office (Fióktelep) |
By choosing between a Kft or a branch, foreign companies can align their setup with their risk tolerance, operational scope, and tax planning needs. Most investors prefer the Kft structure for greater autonomy, legal protection, and eligibility for local benefits, but a branch may be suitable for simpler or short-term market access.
Step 1: Company Name Availability Check (optional)
Ensure the proposed name is unique in the Hungarian company registry (Cégjegyzék). While name reservation is optional, legal service providers can check availability and optionally reserve it online within 1–2 business days.
Step 2: Drafting Incorporation Documents
The core founding document is the Articles of Association (Alapító Okirat), which must be prepared in Hungarian and signed by the founders. Additional documents may include corporate resolutions from the parent company and certified copies of corporate documents. If the parent company is registered outside Hungary, certified translations may be required.
Step 3: Appointing the Managing Director
Every Kft must have at least one Managing Director (Ügyvezető), who is responsible for the company’s legal representation. This person may be a foreign national, but must have a Hungarian address for official service. It’s also mandatory to engage a Hungarian-licensed attorney (ügyvéd) to represent the company during the registration process. Only Hungarian attorneys are authorized to electronically file company registration documents with the competent Company Court.
Step 4: Electronic Filing with the Court of Registration
The appointed Hungarian attorney will submit the incorporation documents through Hungary’s electronic company registration system. Once approved by the Company Court, the subsidiary will receive its official company registration number (Cégjegyzékszám).
Step 5: Opening a Corporate Bank Account
After registration, the company must open a corporate bank account in Hungary. Most banks require an in-person meeting with the Managing Director for identification and compliance. Non-EU nationals may face stricter due diligence, and some banks may request a business plan and proof of local operations before onboarding.
Additional services like virtual office setup, tax advisory, or HR onboarding may incur extra cost but can accelerate operational readiness.
Once established, your Hungarian Kft must comply with:
Most companies appoint a Hungarian accountant to handle these obligations efficiently.
Establishing a subsidiary in Hungary is a strategic investment for companies seeking EU market access, operational stability, and cost efficiency. With the right legal and administrative support, the setup process is smooth, predictable, and fully transparent.
Thinking about starting your business in Hungary? Passway Hungary provides full-service company setup and support — from registration and banking to HR and tax compliance.
At Passway, we specialize in simplifying the complexities of visa applications, legal services, and accounting solutions in Hungary. Whether you’re an individual or a business, our team of experts provides tailored support for everything from visa processing to social security and taxation.
Tel/Whatsapp:
+36 20 275 7522
hello@passway.hu
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