What does the procedure look like when founding a company? What kind of steps have to be followed?

In principle we can speak of two kinds of procedures. Our client can freely choose if he/she travels to Hungary and signs all documents before one of our lawyers or he/she can choose to sign these documents in his/her own country of origin and send them to us by post. In the previous case the lawyer is entitled to countersign the documents because the client has signed them before him. In the other case the client can sign the documents „at home” but he/she has to either go to a notary public and certify them there with an Apostille or to go to a Hungarian consulate and apply for a certification.

How long does the procedure last?
After the necessary documents are signed, the lawyer sends them to the Court of Registration. Pursuant to the Company Act, the Court of Registration registers the company in 30 days after the documents are delivered. In practice, the registration of the Kft. occurs quicklier, generally it takes between 3 and 10 days.

We already founded the Kft. What kind of obligations must the owners/managing director fulfil?
After the Kft. is registered in the company register, the managing director/owners has to open a bank account. Apart from that, the Kft. is obligated to register their employees at the tax authority and at the public health authority. For these administrative steps the newly founded company must commission an accountant who can fulfil these administrative obligations towards the tax authority and the public health authority.

Number of founders: Minimum one person, maximum number is not limited. It can be a non-Hungarian legal entity or a non-Hungarian private person. Maximum number is not limited. If it is a legal entity, we will need the company extract of the foreign company with Apostille certificate and we also need an official translation about it.

Managing director: Minimum 1 person, maximum number is not limited. It shall be a private person, either non-Hungarian or Hungarian.

Delivery agent: If you appoint a non-Hungarian managing director or there is a non-Hungarian private person or legal entity as owner in the company then you also shall appoint a delivery agent. We, as attorneys can be also assigned as delivery agent of the owner and/or managing director.

Minimum capital: 3.000.000,- HUF. Important to note, that you shall not deem this 3.000.000,- HUF as an escrow or deposit. You can use this money (paying bills, employees, buying computers etc.)

Registered seat: You shall have a Hungarian address. It is very important to take over all the company documents there. If you need, we can recommend a professional registered seat provider in the 2nd district in Budapest.

Accountant: You shall have a good English speaking accountant. If you don’t have any, we can recommend one of my English speaking partners to you.

EU Tax Number: Will be granted when we incorporate the company.

Stamp duty of founding of Kft.
If we use the pattern of the Company Act. 200,- EUR. If we create an individual deed of foundation: 350,- EUR. In most cases, the pattern of the Company Act is eligible for most of the small and medium-sized enterprises.

Attorney fee:
Based on individual agreement, depending on the complexity of the case.