Whether you can set up an offshore company in Hungary depends on what you mean by an offshore company. Read on to discover the most widespread definitions, and how setting up a company in Hungary can help you reach your business goals.
Originally, offshore simply means “away from the shore”, which in case of a company can simply mean overseas or abroad. As a result, e.g. a U.S. company may refer to its Hungarian subsidiary as its offshore operation.
Another typical feature of offshore companies is that they might perform their activities in a place that is different from where they are registered. That is also possible with a Hungarian company. If your regular business or existing company operates outside the EU, and now you want to start selling in the EU market, you can easily set up an “offshore” company in Hungary and use that as your EU headquarters.
Sometimes offshore companies are understood as companies operating in tax havens, where various tax benefits are available. Sometimes companies with foreign owners are required to pay very little taxes, or no taxes at all if the does no business within the country of registration. For Hungary, neither of these is true. Corporate tax in Hungary is just 9%, which is the lowest in the EU, but it certainly has to be paid. At the same time, there are several rules and other details that make Hungary a favorable business environment, such as the KIVA tax regime designed for small tax payers, the EU standard infrastructure, and the low operational costs compared to Western Europe.
One more thing sometimes expected of offshore companies is to protect the identity of the owner through a nominee director and owner. That is not possible in the EU in general, and that includes Hungary too. In the European Union, the ownership structure of companies must be transparent, and databases are public – such as the database of the Hungarian Company Registry, which is also available online here.
In line with the above, you can certainly have an offshore company in Hungary if you want to set up a subsidiary for your existing non-EU business, or want to enter the EU market while operating outside Hungary. You can also take advantage of low taxes and cost-effective solutions, moreover, you can gain EU residency through company operation. However, company operation must remain transparent at all times, and ownership information is always public.
Setting up an offshore company in Hungary takes just 4-5 business days, and your company will immediately receive an EU VAT number too, which is required for international trade within the EU. You must travel to Hungary once to take care of the company’s Hungarian corporate bank account, but other than that, remote operation is possible.
If you think Hungary is not the best option for you, check out our new website and form your company in some other Central European country. Our international team has 17+ years of experience in business assistance, with an extended network of partners within and outside of Hungary. Tell us about your plans in Europe, and let us help you find a solution that suits you best.
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On 12 July 2022, just one day after its proposal, the Hungarian Parliament has accepted the new KATA law that will affect more than 430,000 taxpayers in Hungary, most of who will no longer be eligible for this tax regime starting from 1 September.Read More