Doing Business in Hungary – 5 Most Important Legal Facts
In its recent economic survey of Hungary, the Organization of Economic Cooperation and Development (OECD) highlights a convincing picture of the country’s economic achievement.
- New Civil Code in Hungary
Act V. of 2013 on Civil Code (New Hungarian Civil Code) came into force on 15/03/2014, and it implemented some fundamental changes in the Hungarian private law system. The New Hungarian Civil Code is based on the most recent EU standards, hence it is clearly a very up to date Civil Code in the EU. The New Hungarian Civil Code contains regulations of personal matters, corporations, family matters, property matters, obligation matters, tort matters and succession matters. Since 15/03/2014 the new regulations integrated into Court practice, and created directives. This helps the interpretation of the new Act, and creates a more predictable legal practice in the Hungarian private law.
- Purchase of real estate property
In Hungary, generally attorneys purchase real estate properties. The rights and obligations connected with the real estates are registered in the regional Land Registry Offices. Registering in the Official Public Registry establishes its legal certainty in the Real Estate Law. The Hungarian Land Registry Offices work rather fast, compared to other EU countries registry system.
- Incorporation of limited liability companies
The most common corporation form in the Hungarian small- and medium sized enterprises sector is the limited liability company (korlátolt felelősségű társaság in Hungarian). It can be easily established in 4-5 days, due to the fast procedures of the Hungarian Corporation Court. Corporation in Hungary can only be established with the help of a lawyer, a natural person cannot establish any kind of corporation by itself.
- Debt collection
Debt collection can be done through litigation or, through out-of-court civil law proceeding with the help of a notary. During the out-of-court civil law proceeding, the notary proceeds an order for payment, and if it comes into force (the debtor does not appeal), it has the same effect as a court proceeding. The Hungarian notary can proceed both Hungarian and European order for payment, if the debtor lives in any other member state of the EU.
The Corporate Tax rate in Hungary is 9%, which is the lowest tax rate in the Central – European Region. In Slovakia the tax rate is 22%, in Romania the tax rate is 16%, and in Serbia it is 15%. This low Corporate Tax rate allows the companies to save a lot of money in every business year.
Are you in interested in Hungarian business law or real estate law? We, as a Hungarian Budapest based law firm can assist you.
Dobos István attorney at law (ügyvéd; Budapest) / Zatykó Anna
Phone / Whatsapp: +36303088151