Establishing a Subsidiary in Hungary – A Comprehensive Guide for Turkish Companies (2025 Edition)

Hungary remains a gateway to the European Union for Turkish businesses seeking expansion. Its strategic geographic location, business-friendly regulatory environment, and one of the EU’s most competitive tax systems make it an increasingly attractive option. This guide is tailored specifically for Turkish companies and investors, offering a comprehensive breakdown of how to establish a Hungarian subsidiary in full legal compliance.

1. What Types of Subsidiaries and Business Presences Can You Establish Under Hungarian Law?

Hungarian company law allows foreign investors to establish various forms of business presence depending on the level of independence, liability, and operational goals. These include full subsidiaries and branch offices.

(A) Limited Liability Company (Kft – Korlátolt Felelősségű Társaság)

This is the most popular corporate structure for foreign-owned subsidiaries.

Separate Legal Entity: Operates independently from the parent company.
Limited Liability: Shareholders are only liable up to their capital contribution.
Minimum Share Capital: HUF 3,000,000 (~€7,400 at 405 HUF/EUR).
Ideal For: Long-term presence, EU operations, and tax optimization.

Comparison to Turkey:

Similar to the Turkish Limited Şirket (Ltd. Şti.).
Requires higher share capital and mandatory chamber registration in Hungary.

Additional Requirements:

Name reservation, Articles of Association, managing director appointment, and Hungarian bank account setup.

(B) Private Company Limited by Shares (Zrt – Zártkörűen Működő Részvénytársaság)

A more complex corporate form designed for medium to large companies.

Separate Legal Entity: Shareholders’ liability is limited.
Minimum Share Capital: HUF 5,000,000 (~€12,350).
Governance: Requires internal governing bodies such as a board of directors and/or supervisory board.
Ideal For: Turkish companies planning investor participation or joint ventures.

Comparison to Turkey:

Similar to the Turkish Anonim Şirket (A.Ş.).

Additional Requirements:

Complex company statutes, internal boards, and in some cases audit obligations.

(C) Public Company Limited by Shares (Nyrt – Nyilvánosan Működő Részvénytársaság)

Primarily used by public companies listed on a stock exchange.

Public Trading: Shares are publicly available.
Minimum Share Capital: HUF 20,000,000 (~€49,400).
Ideal For: Turkish multinationals seeking EU market entry via capital markets.

Comparison to Turkey:

Equivalent to publicly listed A.Ş. in Turkey.

Additional Requirements:

Complying with capital markets regulations, regular public disclosures, and audits.

(D) Branch Office (Fióktelep)

A branch is not a separate legal entity but an extension of the foreign company.

No Legal Separation: All liabilities are borne by the parent.
No Share Capital Required: Simpler to establish.
Not Eligible for Incentives: Branches are not considered domestic legal entities.
Ideal For: Short-term presence, specific projects, or market testing.

Comparison to Turkey:

Similar to a foreign branch office of a Turkish company established abroad.

Additional Requirements:

Must be registered at the Company Court, have a local representative, and file taxes separately in Hungary.

While the Kft remains the most common form, Zrt, Nyrt, and branch offices all offer strategic options depending on business goals, liability tolerance, and regulatory obligations.

2. Legal Process: How to Establish a Subsidiary in Hungary

Step 1: Feasibility & Strategic Planning

Define scope of business, market strategy, and capital requirements.
Choose the most appropriate subsidiary type (Kft, Zrt, Nyrt) based on your company size, investment strategy, and regulatory needs. Alternatively, evaluate whether a branch office (Fióktelep) may be suitable for limited or temporary operations.
Consult with a Hungarian-licensed attorney and tax advisor.

Step 2: Name Reservation

Optional, but recommended to ensure the chosen company name is unique in the Hungarian business registry (Cégjegyzék).

Step 3: Drafting the Articles of Association (All Forms)

Must be prepared in Hungarian.
Includes key elements: company name, registered office, scope of activity (TEÁOR codes), capital amount, and details of ownership and management. For Zrt and Nyrt structures, additional provisions are required regarding share issuance, shareholder rights, and board responsibilities.
May include additional clauses (e.g., profit distribution rules, voting rights, shareholder agreements, supervisory board). Zrt and Nyrt formats require more complex internal governance descriptions.

Step 4: Appointment of Management Bodies

For Kft: One or more managing directors (Ügyvezető) are appointed.
For Zrt: Usually requires a Board of Directors or a Managing Director, along with a Supervisory Board.
For Nyrt: Board of Directors is mandatory, and public disclosure obligations apply.
For Branch Office (Fióktelep): A local representative (designated person) must be appointed, who will act on behalf of the foreign parent company in Hungary. This person does not have to be an employee, but must be authorized to represent the branch in administrative and tax matters.

All appointees must have a Hungarian service address and fulfill any necessary representation or identification criteria.

Step 5: Legal Representation & Filing

Only Hungarian-licensed attorneys (ügyvéd) may file the company registration.
Submission is done electronically through the e-Cégeljárás (Company Court System).

Step 6: Tax Number, EU VAT Registration & KSH Code

Upon registration, the company receives a Hungarian tax number.
If planning to trade with EU entities, EU VAT number should be requested.
Automatically registered with the Hungarian Statistical Office (KSH).

Step 7: Register with Local Municipality & Chamber of Commerce

Notify the local municipality within 15 days.
Chamber of Commerce registration is compulsory (annual fee: HUF 5,000).

Step 8: Open a Corporate Bank Account

Most Hungarian banks require:
- In-person meeting with Managing Director
- Company registration number
- Owner identification documents
- Business plan or scope description (especially for non-EU owners)

3. Timeline, Legal Costs & Operational Budget (All Forms)

Item	Kft	Zrt	Nyrt	Branch Office (Fióktelep)
Share Capital	HUF 3,000,000 (€7,400)	HUF 5,000,000 (€12,350)	HUF 20,000,000 (€49,400)	Not required
Legal Setup Fees	HUF 150,000–600,000	HUF 250,000–800,000	HUF 400,000–1,000,000	HUF 100,000–300,000
Translation & Notary Fees	HUF 50,000–150,000	HUF 75,000–200,000	HUF 100,000–250,000	HUF 30,000–100,000
Bank Account Opening	Yes – in-person required	Yes – in-person required	Yes – in-person required	Optional, depends on operations

Expected Timeline:

Name availability check: 1–2 working days
Document preparation: 2–5 working days
Registration and Tax ID: 2–3 working days after submission (longer for Zrt/Nyrt)
Bank account: 1–2 weeks depending on bank and entity type

Total process time:

Kft: 2–4 weeks
Zrt/Nyrt: 3–6 weeks (due to corporate governance and audit setup)
Branch Office: 1–2 weeks (if documentation is complete)

Expected Timeline:

Name availability check: 1–2 working days
Document preparation: 2–5 working days
Registration and Tax ID: 2–3 working days after submission
Bank account: 1–2 weeks depending on bank

Total process time: 2–4 weeks (if documents are complete)

4. Ongoing Compliance & Accounting (Kft, Zrt, Nyrt, Fióktelep)

Annual Reporting: All Hungarian business entities — including Kft, Zrt, Nyrt, and branch offices (Fióktelep) — must file annual balance sheets and income statements to NAV. For branches, this includes financial statements of Hungarian operations.
Corporate Tax Filing: Due annually; 9% flat corporate tax applies.
Local Business Tax (Helyi Iparűzési Adó): Up to 2% of gross revenue.
VAT Reporting: Monthly or quarterly, depending on turnover.
Payroll & HR: Must register employees, submit payslips, social contributions, and withhold taxes.
GDPR: Required if processing personal data of clients or staff.

5. Optional Services for Turkish Companies (Applicable to Subsidiaries and Branches)

Virtual Office or Local Registered Office Service
Hungarian Bookkeeping & Monthly Tax Reporting
HR Onboarding & Employment Contract Templates
Immigration Assistance (Work Permits for Turkish Staff)
Legal Representation & Power of Attorney
Post-Incorporation Consulting: Grants, EU funding, R&D incentives

For Turkish businesses seeking access to the European Union, Hungary offers a uniquely favorable environment for establishing a subsidiary. With clear procedures, low taxation, and local support, setting up a legally compliant business presence — whether a Kft, Zrt, Nyrt, or branch office — in Hungary is an efficient and strategic move.

Passway Hungary offers tailored incorporation services, legal and tax compliance, and ongoing HR support for Turkish-owned companies.

📩 Start your Hungarian expansion with us today.

Establishing a Subsidiary in Hungary – A Comprehensive Guide for Turkish Companies (2025 Edition)

1. What Types of Subsidiaries and Business Presences Can You Establish Under Hungarian Law?

2. Legal Process: How to Establish a Subsidiary in Hungary

3. Timeline, Legal Costs & Operational Budget (All Forms)

4. Ongoing Compliance & Accounting (Kft, Zrt, Nyrt, Fióktelep)

5. Optional Services for Turkish Companies (Applicable to Subsidiaries and Branches)

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