Establishing an LLC (Kft.) in Hungary: A Practical Guide for 2026

Introduction

The limited liability company (korlátolt felelősségű társaság, abbreviated as Kft.) is by far the most popular business entity in Hungary. It combines limited liability for its members with relatively simple governance and moderate capital requirements, making it the default choice for small and medium-sized enterprises, foreign investors, and start-ups alike.

This guide walks you through the process of establishing a Kft. in Hungary as of 2026, covering the legal framework, key requirements, step-by-step procedures, and practical considerations.

Legal Framework

The Kft. is governed by Act V of 2006 on Public Company Information, Company Registration, and Winding-Up Proceedings (Cégtörvény, “Ctv.”) and Act V of 2013 on the Civil Code (Ptk.), specifically Book Three on Legal Persons. These statutes set out the rules on formation, governance, member liability, and dissolution.

Key Features of the Kft.

• Limited liability: Members’ liability is limited to their capital contributions. Personal assets are generally protected from the company’s debts.
• Minimum share capital: HUF 3,000,000 (approximately EUR 7,500–8,000, depending on the exchange rate). At least half must be paid up before registration.
• One or more members: A Kft. can be formed by a single person (egyszemélyes Kft.) or by multiple members.
• Managing director(s): At least one managing director (ügyvezető) must be appointed. The managing director may be a member or an external person.
• No requirement for a supervisory board in most cases, unless the annual average number of full-time employees exceeds 200.

Step-by-Step Formation Process

Step 1: Choose a Company Name

The company name must include the “Kft.” or “Korlátolt Felelősségű Társaság” designation. It must be distinguishable from other registered entities. You can check name availability through the Company Information Service (Céginformációs Szolgálat, e-cegjegyzek.hu). Foreign-language names are permitted provided they use the Latin alphabet.

Step 2: Determine the Registered Seat

Every Kft. must have a registered seat (székhely) in Hungary. This can be a rented office, a home address, or a virtual office. You will need the property owner’s consent recorded in the articles of association or a separate declaration.

Step 3: Define the Business Activities

You must select the company’s principal activity and any secondary activities from the TEÁOR’25 classification (the Hungarian statistical activity classification, updated in 2025). Registration requires stating at least the principal activity code.

Step 4: Adopt the Articles of Association

The articles of association (társasági szerződés, or alapító okirat for single-member companies) must be drafted by a lawyer (ügyvéd) and executed as a countersigned private document (ügyvéd által ellenjegyzett magánokirat). The articles must contain, among other things:

• The company’s name, seat, and activities
• The members’ names and capital contributions
• The share capital amount and the form and schedule of contributions
• The appointment of the managing director(s)
• Provisions on decision-making, profit distribution, and transfer of business shares

For companies that adopt the simplified standard articles (egyszerűsített alapítás), a template form (szerződésminta) is used, which expedites registration but limits the parties’ freedom to customise the terms.

Step 5: Open a Bank Account and Deposit Capital

Before registration, the founding members must open a company formation bank account (cégjegyzési bankszámla) and deposit at least 50% of the cash contributions. The bank issues a certificate confirming the deposit, which must be submitted with the registration application.

In-kind contributions (apport) are also permitted. They must be valued in the articles of association and transferred to the company by the date specified therein (within three years at the latest).

Step 6: Apply for Tax Registration

The company’s tax number (adószám) is issued by the National Tax and Customs Administration (NAV) as part of the company registration procedure. Since 2023, the tax authority conducts a preliminary check on certain founders and managing directors for tax debts and related risk factors. If the check reveals disqualifying circumstances, registration may be refused.

Step 7: File the Registration Application

The lawyer submits the registration application electronically to the competent Court of Registration (Cégbíróság) through the Company Registration Portal. The application package typically includes:

• The countersigned articles of association
• Specimen signatures of the managing director(s)
• The bank certificate of capital deposit
• Declarations of acceptance by the managing director(s) and any supervisory board members
• The headquarters usage consent
• The lawyer’s certification

Step 8: Registration and Publication

If the application is complete and in order, the Court of Registration issues a registration order (bejegyző végzés) typically within 3–5 business days for simplified formations, or 15 business days for standard formations. The company is registered as of the date stated in the order and is published in the Company Gazette (Cégközlöny).

The company may begin operating immediately upon registration. It receives its official company registration number (cégjegyzékszám) and is assigned a statistical code (statisztikai számjel) by the Hungarian Central Statistical Office.

Costs of Establishing a Kft.

The following approximate costs apply as of 2026:

Item	Estimated Cost
Attorney fees (standard formation)	HUF 80,000 – 200,000
Attorney fees (simplified formation)	HUF 50,000 – 100,000
Court registration fee (illeték)	HUF 0 (electronic filing is free since 2024)
Publication fee (közzétételi díj)	HUF 0 (included in electronic filing)
Bank account opening	Varies by bank
Notarial costs (if applicable)	HUF 20,000 – 50,000
Minimum share capital	HUF 3,000,000

The most significant outlay is the share capital itself, followed by legal fees. Since 2024, electronic company registration is free of charge, which significantly reduced formation costs.

Post-Registration Obligations

Once the company is registered, the managing director must:

1. Register with the Tax Authority (NAV) for VAT, social contributions, and other tax obligations (partly automated during company registration).
2. Open a permanent bank account and transfer funds from the formation account.
3. Register employees (if any) with the social security administration.
4. Establish accounting records and appoint an accountant or auditor as required.
5. Meet beneficial ownership reporting obligations under the Anti-Money Laundering Act.
6. File annual financial statements with the Court of Registration and the tax authority.

Simplified Formation (Egyszerűsített alapítás)

Hungary offers a streamlined simplified formation procedure for Kft.s that adopt the statutory template articles of association. Key advantages include:

• Faster processing (typically 1–3 business days)
• Lower legal fees
• Standardised documentation

The trade-off is limited flexibility: the template articles cannot be modified, so bespoke governance arrangements, special share classes, or unusual capital structures are not possible under this route. However, the company can later amend its articles to a fully customised version.

Foreign Investors: Special Considerations

Hungary welcomes foreign investment, and non-Hungarian nationals (including non-EU citizens) may freely establish a Kft. Key points for foreign founders include:

• No residency requirement: Neither the members nor the managing director need to be Hungarian residents, though having a local contact person is advisable.
• EU freedom of establishment: EU/EEA nationals enjoy the same rights as Hungarian citizens in company formation.
• Power of attorney: If the foreign founder cannot appear in person, a notarised and apostilled power of attorney allows their Hungarian lawyer to act on their behalf.
• Translation: Documents in foreign languages must be accompanied by certified Hungarian translations.
• Tax residency: The Kft. will be tax-resident in Hungary and subject to the standard 9% corporate income tax rate—one of the lowest in Europe.

Common Pitfalls

• Insufficient capital planning: While HUF 3,000,000 is the legal minimum, undercapitalisation can lead to operational difficulties and potential liability for members.
• Incomplete articles of association: Omitting key provisions may cause registration delays or governance disputes later.
• Tax authority rejection: Founders with outstanding tax debts or prior disqualifications may be flagged during the registration process.
• Ignoring post-registration deadlines: Failing to meet reporting obligations can result in fines and ultimately the forced dissolution of the company.

Conclusion

Establishing a Kft. in Hungary is a well-regulated and efficient process, particularly when using the simplified formation route. With clear planning, proper legal guidance, and an understanding of the ongoing compliance obligations, founding a Hungarian LLC can be completed within days and at a reasonable cost. Hungary’s competitive corporate tax rate and EU membership make it an attractive jurisdiction for both domestic entrepreneurs and international investors.

This article is for informational purposes only and does not constitute legal advice. For advice tailored to your specific situation, please contact our office.