Company formation and running within the EU - for UK companies

Are you a UK importer? Set up your trading entity within the EU, in Hungary!

After BREXIT, UK companies might need a new trading entity within the EU. Establishing a Hungarian company is an appropriate option to handle the disadvantages of BREXIT. RSM Hungary can provide a one-stop-shop solution for all necessary services required for company formation and running of the entity within the EU.

What are the benefits of a Hungarian company?

• 9 percent corporate income tax rate;
• EU VAT number within a few days;
• Remote company formation without travelling.

Our company formation services include:

• digital company formation;
• cloud bookkeeping and company seat services;
• tax advisory, including VAT and transfer pricing;
• customs advisory.

As a result, the administrative burdens are kept at a minimum level!

We can assist you, request a quote!

Choice of legal entity for a new company

Over eighty percent of the business entities are formed as limited liability companies ( LLC) in Hungary.

The minimum registered capital of an LLC is HUF 3 million (approx. EUR 8500 / GPB 7500), which may be paid to the company at a later point in time, the entity can be set up by one or more members. 

Although there are multiple other forms of business entities available, such as unlimited partnerships and companies limited by shares on which we are ready to provide further information, LLCs proved to be the most reliable company form eligible for most business activities. 

Company formation process in Hungary

Our company formation services are provided in an all-electronic manner, we do not require a personal presence in Hungary. Simplified company setup process by using statutory form documents provide for the quickest solution to set up an entity, which may take 2 to 8 working days. 

Our legal team will:

• Contact you to collect the relevant information such as data of the member(s),managing directors, the planned activity that is required for the formation documentation.
• Draft and provide you the formation documentation by email for execution.
• Once the documents are returned to RSM Hungary (together with the original certificate of good standing in case the member is a legal entity),we will lead you through a simple KYC and document certification process via an eligible video-conferencing tool (such as skype or MS Teams).
• File the registration request to the court of registration. 

Accounting and company seat services 

When your entity is formed, RSM Hungary will provide you with digitalized accounting and tax compliance solutions as well as company seat services,  including all necessary registration with the authorities. Our activities range from day-to-day bookkeeping tasks to closing tasks including the creation of structures in line with Hungarian and international accounting standards (IFRS, US GAAP, HB II). Cloud accounting service is offered to our clients, which is a web-based, modern online service available to all enterprises. Bookkeeping is performed using Terminal or VPN (Virtual Private Network) applications, whereby our clients have online access to all invoices and provide all information required in a digitalized manner.

Tax compliance and obligations, assistance from RSM Tax team 

RSM Hungary’s tax advisory team covers a wide range of general and specific taxation issues related to day-to-day business and specific transactions in domestic as well as cross-border related international matters. 

During and after the onboarding process we can help you design your entire VAT and other indirect tax structure flow to minimize your cash flow cost and administrative burden and ensure compliance with the relevant VAT and invoicing rules and enable you to recover the input VAT that you may incur. Our digital tax solutions enable your company to comply with the Hungarian real-time invoice reporting obligations, seamlessly integrate your existing EPR system with the tax authority’s portal, and enabling you to rely on the benefits of the electronic invoicing and streamlined automated VAT processes, such as XML invoicing and automated VAT returns.

Our assistance also includes determining the arm’s length transfer prices between your Hungarian company and the rest of the group as well as preparing the transfer pricing documentation which is a useful tool for effectively managing potential transfer pricing risk.  

Customs advisory 

Our customs team provides advisory and compliance services related to customs duty, excise duty, environmental protection product charges, and public health product fee and offers complex solutions from administrative obligations to organisational restructuring for start-up enterprises as well as for large companies. 

We deal with exports, imports, the origin of goods, customs valuation, tariff classification, and import VAT. Our customs team has substantial experience in optimization processes, such as applying for customs simplifications, VAT self-assessment license, Authorized Economic Operator license (AEO),and customs duty suspensions. We also advise on the interpretation of customs legislation and represent our clients in course of customs audits and appeals procedures.

Highlights of the Hungarian tax environment

We believe that Hungary provides a tax-friendly environment with a stable legal system that makes an ideal location for trading and also holding purposes.

Hungary offers the lowest flat 9 percent corporate income tax rate in the EU. Business costs are generally deductible for tax purposes, tax losses can be carried forward for five years for deduction. Various cash and tax incentives are available for investments and corporate R&D activities. 

The absence of withholding tax for dividends, interest, or royalties which are paid to foreign corporate owners, together with the participation exemption on capital gains from qualifying shareholdings and the 50 percent deduction for profits from qualifying royalties, Hungary is attractive for holding and licensing companies as well. In order to prevent double taxation,

Hungary has over 70 treaties with many of the world’s most important jurisdictions (e.g. EU, Great Britain, Canada, China, Hong Kong, Singapore, Switzerland, and the USA).