The key to saving money on anything is planning ahead and making informed decisions. This is especially true in times of change, like now, when the pandemic takes a new turn seemingly each day. Under such circumstances, it makes sense to base your plans on factors that are less liable to change. This is why it is worth choosing Hungary when you are moving your business to Europe.
In Hungary, company setup takes just 4-5 business days, which is lot shorter than the procedures in other Central European countries that might take several weeks. You can set up the company remotely, through a POA, and you have to come to Hungary only once, to open a corporate bank account.
Company setup is available to all nationalities. You do not need a local partner to set up the company with, and you can be the sole owner and the managing director, regardless where you are coming from.
If you use comparison charts like the Ease of Doing Business table of the World Bank to help you decide where to set up a company in Europe, make sure to check some individual parameters as well as the rankings. For example, Hungary ranks 52nd and Slovakia ranks 45th, while company registration in Hungary is the above-mentioned 4-5 days, and in Slovakia it can take 3-4 weeks.
While international travel is heavily limited in Europe, business trips to Hungary are still allowed. According to the latest regulations, you can enter Hungary for the corporate bank account opening as a business owner with just your travel documents, a company extract and a business invitation letter. You will not be required to get a police clearance or to quarantine, and you do not even need a negative PCR test, even if you are a third-country national.
However, we do advise our clients to get a police clearance and a negative PCR test just in case, since the border control personnel is not always up-to-date on the latest regulations. At Helpers, we provide travel and personal assistance to all of our clients, so that they enjoy a hassle-free experience at the border.
Moreover, as a managing director of a Hungarian company, you will be eligible for Hungarian residency, which will make travel within the Schengen zone and to many other countries around the world a lot easier.
In Hungary, corporate tax is just 9%, which is the lowest in Europe. Moreover, the tax base can be reduced by various items, making company operation in Hungary even more cost-effective. At the same time, dividend tax is 15%, which is the average in Central Europe.
VAT is 27% in general, which is higher than the Central Europe average. However, VAT is usually reclaimable (which is why in many B2B shops only the net prices are indicated, since that is what the given item will cost your Hungarian company in the end), and if you conduct international trade, you might not have to pay VAT at all.
Hungary is located in the heart of Europe, with excellent connections to all major cities of the region via roads, railways, and air traffic. Broadband internet as well as the standard utilities (water, electricity, gas) are accessible all over the country. The capital, Budapest, has more than 2 million inhabitants, which offers an excellent pool of professionals in various fields. Budapest has also become a tech-hub in Central Europe over the recent years, with some outstanding ventures such as Prezi, LogMeIn, or Kilgray.
Local talent is highly skilled, and since prices in Hungary are lower than in Western Europe, expected salaries are also lower, making company operation more cost-effective. Minimum salaries and working hours are strictly regulated, but above that you are free to negotiate with your would-be employee. If you are not sure what is the right gross salary to offer, you can always ask for the assistance of a local job agency or head-hunter who can help analyze your company’s needs, compile a reasonable job description, and set a salary range.
Budapest offers many attractive venues for an office or a shop. However, if you do not need a physical office from day one, it is totally normal to have your official company seat at a seat provider, who will forward official mail to any address you specify, or even send you a scan and a short summary of your messages (e.g. if you choose our service). At the same time, you can also sign up at a serviced office, where you can always find a desk and the essential infrastructure to work or meet clients as necessary, without paying the rent for an office of your own.
The best way to save on your European company operation, especially in such uncertain times, is to decide what you want and have a plan for all the factors you can prepare for. Hungary offers favorable conditions and an excellent infrastructure, which makes it an ideal location for your European headquarters.
Take a look at our services! Helpers offers comprehensive business and immigration assistance, including company setup, virtual office, accountancy, business immigration for the managing director, and work permits for the employees. Get in touch with us today – just fill in the form below.
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