Hungarian company formation was more popular in the first quarter of 2019 than anytime since 2014. The increasing number of incorporations, together with a recent decrease in the number of company dissolutions shows a positive trend altogether.
More than 7,600 companies were incorporated in Q1 in Hungary, which is the highest number of company formations since Q1 2014, when more than 10,000 companies were formed in Hungary. In between, the number was usually between 6,000 and 7,000 quarterly. The current figure is in fact the result of a slow but steady increase since a drop in 2015, when only 5,600 companies were established in Q3.
Mind you, there is a standard yearly fluctuation to be counted with. Q1 and Q4 are usually more popular, while Q3, which includes the months of summer vacations, regularly sees fewer company setups.
In Q2 2019, the number of company liquidations has decreased with 30% compared to Q1, and the smaller fluctuation reflects a greater economic stability.
Hungary still offers very favorable conditions for European company formation as compared to other EU countries. Corporate tax is only 9%, which is the lowest in the EU. Social contribution tax has just been reduced to 17.5% (it is an important element of both salaries and dividend payments). Company formation itself takes only a few workdays, while the company also immediately gets its EU VAT number, thanks to which you can do trade within the EU without charging VAT. The infrastructure in Hungary (transportation, utilities, online banking, etc.) is as developed as in any Western-European country, while living costs are significantly lower, which makes company operation in Hungary really cost-effective.
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