Determine Branch Office Type

Permanent Establishment (PE) vs Non-Permanent Establishment (Non-PE)
 

• Permanent Establishment: More formal setup with tax obligations.

• Non-Permanent Establishment: Temporary setup for certain business activities.

Comparison Table: PE vs Non-PE in Hungary vs Neighboring Countries (Austria, Slovakia)

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Prepare Required Documents (KYC)
 

List of Required Documents
 

• Articles of Incorporation

• Proof of existence of parent company

• Authorization of the branch representative

• Passport copies of company directors

• Proof of registered address in Hungary

Translation Requirements
 

• All official documents must be translated into Hungarian

• Translations must be certified by a Hungarian notary or official translator

Complete Company Registration Forms (Court of Registration)

Required Forms
 

• Form Nyt. (Company Registration Request)

• Form 1 (Company Details)

• Form 2 (Information on Company Representatives)

Form Assistance

House of Company provides expert assistance in filling out all necessary forms, ensuring accuracy and compliance with Hungarian regulations.

Submit Registration to Hungarian Court of Registration

Submission Process
 

• Compile all required documents and forms

• Submit the package to the Court of Registration electronically or in person

• Pay the registration fee

Timeline
 

• Standard processing: 15 working days

• Expedited processing (additional fee): 1 working day

• Obtain Registration Number

Significance of Registration Number

The registration number is crucial for all official business activities, including opening bank accounts and entering into contracts.

Comparison Table: Hungary vs Germany vs Austria – Registration Number Details

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Tax Registration
 

• Obtaining Tax ID (Tax Number)

• Automatically assigned upon company registration

• Format: 11 digits (8-digit company registration number + 3-digit tax code)

VAT Registration Process
 

• Submit VAT registration form to the National Tax and Customs Administration

• Provide proof of business activities requiring VAT registration

• Obtain VAT number within 30 days

VAT Rates and Thresholds in Hungary
 

• Standard VAT rate: 27%

• Reduced rates: 18% (milk, bread), 5% (books, medicines)

• VAT registration threshold: HUF 12 million (approx. €33,000) annual turnover

Tax Identification for Foreign Parent Companies
 

• Foreign companies must obtain a tax number for their Hungarian branch

• Additional registration may be required for specific tax types (e.g., local business tax)

Key Considerations for Branch Registration
 

Business Activities Allowed

Branches can engage in most business activities allowed for Hungarian companies, with some restrictions in regulated sectors (e.g., banking, insurance).

Local Representation

At least one local representative with a Hungarian address is required for official communications.

Bank Account Setup
 

 

• Mandatory for business operations

• Requires company registration documents and tax number

• Major Hungarian banks: OTP Bank, K&H Bank, Erste Bank

 

Compliance with Hungarian Laws

Ongoing obligations include:
 

• Annual financial reporting

• Tax filings

• Labor law compliance (if employing staff)

 

Double Taxation Agreement

Hungary has agreements with over 80 countries to prevent double taxation on income and capital.

 

 Corporate Tax Requirements and Annual Reporting

Corporate Tax Rates in Hungary
 

 

• Standard corporate tax rate: 9% (one of the lowest in the EU)

• Local business tax: up to 2% of net sales revenue
   

Annual Reporting Requirements
 

 

• Annual financial statements (balance sheet, profit and loss account, notes)

• Corporate tax return

• Local tax returns

• Statistical reports

Financial statements and auditing requirements

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• Audit required if annual net sales revenue exceeds HUF 300 million (approx. €830,000)

• Statements must be prepared in Hungarian, following Hungarian Accounting Standards
   

Support Services for Tax Compliance

House of Company offers comprehensive tax compliance services, including:
 

 

• Preparation and submission of tax returns

• Bookkeeping and accounting services

• Tax advisory and planning

• Representation before tax authorities

Key Contacts and Support

Relevant Organizations for Branch Registration

 

• Hungarian Investment Promotion Agency (HIPA): www.hipa.hu

• National Tax and Customs Administration: www.nav.gov.hu

• Hungarian Central Statistical Office: www.ksh.hu

House of Company Support Features
 

 

• Personalized guidance throughout the registration process

• Document preparation and translation services

• Liaison with Hungarian authorities

• Post-registration support (accounting, tax filing, legal advisory)

• Dedicated account manager for ongoing assistance
   

 

 

 

 

 

 

 

 

 

 

 

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