🇭🇺 Hungary

Hungary holds an EU record nobody in Brussels likes to mention: 9% corporate income tax, the lowest in the Union. Add a flat 15% income tax and a capital that looks like Vienna at a discount, and you get one of the cheapest legal ways to run a company and live off it inside the EU. The fine print is Hungarian – literally – and since the change of government in 2026 some of the rules are moving again.

Is it for you?#

Hungary sells a package deal: company in Budapest, owner in Budapest. Split the two and most of the advantage leaks out through the gap.

You win if:

• You move there and pay yourself dividends. 9% corporate tax plus 15% personal tax lands around 24–27% in total on profit you take home – with no progression, however much you earn.
• You’re an EU citizen. You can move, register and found a Kft without any permit. Budapest is a two-hour flight from most of Europe.
• You’re a non-EU investor with €250,000. The Guest Investor permit gives ten years of residence with no minimum stay – rare in the EU.

You lose if:

• You want to stay abroad and just hold a Hungarian company. Non-resident individuals pay 15% on dividends at source (unless a treaty helps), then your home country taxes the rest. Manage it from home, and your home country taxes the company too.
• You’re a non-EU founder looking for a cheap visa. The White Card for digital nomads explicitly bans holders from owning shares in a Hungarian company. Yes, the nomad visa bans the one thing nomads with companies need.
• You sell to consumers. 27% VAT is the highest standard rate in the EU.

The company#

One legal form matters here, and it has a name you’ll learn to spell by week two.

Entity types that matter#

• Kft (korlátolt felelősségű társaság). The Hungarian limited company and the one you want. Minimum share capital HUF 3 million (about €7,500), one managing director is enough.
• Egyéni vállalkozó (sole trader). For residents only; taxed personally, with several simplified regimes. Not suited to international setups.
• Zrt/Nyrt. Share companies for bigger ventures and investors.

How profits are taxed#

The Kft pays 9% corporate income tax on its profit. Then the municipality wants its cut: a local business tax (HIPA) of up to 2% on a base of revenue minus cost of goods, materials and subcontractors – and Budapest, naturally, charges the full 2%. It’s deductible for corporate tax, and for a lean service company it lands at roughly 2% of profit.

Small companies can pick KIVA instead: 10% on a base made up mainly of payroll costs and dividends paid out. It replaces corporate tax and the employer’s social contribution tax, which suits companies with staff or those that reinvest. From 2026 it’s open to companies with up to HUF 6 billion revenue and 100 employees. Whether it beats 9% + 2% is a spreadsheet job for your accountant, not a gut call.

Worked example: €100,000 profit, owner lives in Budapest#

The 13% social contribution tax on dividends only applies until your total income for the year reaches 24 minimum wages – about €20,000 in 2026 – so it’s capped at roughly €2,500. Dividends to a foreign company shareholder carry no withholding tax at all. The non-resident column only looks better until your home tax office sends its own bill. Run your own numbers in the tax calculator.

Setup and timeline#

1. Hire a Hungarian lawyer. Countersigning and electronic filing by a lawyer is mandatory.
2. Registered seat. Your own address or a registered-seat service (common and legal).
3. File with the court of registration. With the statutory template articles, registration comes within one working day; with custom articles within 15.
4. Tax number, bank account, capital. Pay in the capital, register for VAT if needed (there’s a small-business VAT exemption for low turnover), and set up bookkeeping.

A power of attorney means you don’t have to be there. The bank, of course, will still want to see the managing director’s face in person.

Running costs#

Budget roughly €2,500–4,000 a year: double-entry bookkeeping with monthly and annual returns, the annual report, registered seat and the occasional lawyer’s fee. Audits only kick in above size thresholds, so a small Kft stays spared.

Banking#

OTP, K&H, Raiffeisen, MBH and others open accounts for foreign-owned Kfts – usually in person, after a few weeks of KYC questions you already answered on the form. Documents may need translation. EMIs cover international payments. See our offshore banking guide.

Substance#

A registered-seat service and one managing director satisfy the law. The tax office wants more: to be respected as Hungarian for tax, the company should be managed in Hungary – ideally by you, living there. A mailbox in District V doesn’t run anything. See place of management.

Living there#

The move is the whole point. Here’s how you get in and what Budapest costs you once you’re there.

Residency routes#

The Guest Investor scheme started in July 2024; the €500,000 property option was scrapped before it launched. The government elected in April 2026 has signalled a review of immigration rules, so check the current status before you wire anyone a quarter of a million.

Personal tax#

A flat 15% on almost everything: salaries, dividends, capital gains, interest. No brackets, no surprises, no tax adviser explaining marginal rates over a second coffee. Salaries also carry 18.5% employee social security and 13% employer social contribution tax, which is why most owner-managers pay themselves mainly in dividends. There’s no special regime for newcomers.

On the horizon: the new government plans a 1% annual wealth tax on net assets above HUF 1 billion (about €2.8 million) for Hungarian tax residents, expected from 2027. The bill was due in parliament in autumn 2026. New governments love a fresh tax the way new landlords love a fresh deposit.

Days and residency#

You’re Hungarian tax resident with 183 days a year, or sooner if your only permanent home or your centre of vital interests is in Hungary. Leave your old tax home properly – half-leaving is how people end up resident in two places – see tax residency explained.

Healthcare, cost of living and daily life#

Residents who pay contributions are covered by the public system (NEAK); most expats add private clinics, which are good and affordable. Numbeo puts Budapest at 53.2 excluding rent – cheaper than Vienna or Munich, pricier than Bucharest – and rates it fairly safe (66.4). Daily life means thermal baths, a serious café culture, excellent public transport and a language that doesn’t resemble anything you know. English works in the business and startup scene. At government offices and with landlords, bring a Hungarian speaker and patience.

The catches#

Cheap taxes, expensive surprises. Read this list before you book the removal van.

Step by step#

FAQ#

Sources#

• PwC Worldwide Tax Summaries – Hungary, corporate income
• PwC Worldwide Tax Summaries – Hungary, withholding taxes
• PwC Worldwide Tax Summaries – Hungary, individual other taxes
• NAV – double taxation treaties of Hungary
• Immigration and Asylum Office – White Card
• Immigration and Asylum Office – guest investor permit
• Immigration and Asylum Office – guest self-employment
• Helpers Finance – KIVA in 2026
• EY – Hungary plans wealth tax for individuals