Add in lower operating costs than Western Europe, and it's easy to see why Hungary keeps coming up as an EU entry point. This interest isn't limited to large corporates, either. UK SMEs, freelancers, and digital nomads are all exploring Hungary as a foothold.
This guide walks through the exact process: costs, structures, and the step-by-step path a UK resident needs to follow to register and run a business in Hungary.
TL;DR
- Hungary offers the EU's lowest corporate tax rate (9%) with full foreign ownership and no shareholder residency restrictions
- The Kft (limited company) is the standard structure, requiring minimum capital of HUF 3 million (roughly £6,500)
- Registration can take as little as one business day under simplified procedures, and much of it can be done remotely via power of attorney
- UK citizens are non-EU nationals post-Brexit, so visa and residence rules now apply differently than they did before 2021
- Ongoing compliance includes VAT at 27% (the EU's highest standard rate), payroll taxes, and Hungarian-language annual filings
What Does Starting a Business in Hungary as a UK Citizen Involve?
It means forming a legal entity in Hungary — usually a Kft — that you own and control, either from the UK or after relocating.
Since Brexit, UK nationals are treated as third-country nationals for immigration purposes. That status does not limit ownership: a UK citizen can hold 100% of a Hungarian Kft. It does affect visas, residence permits, and how long you can stay in Hungary to manage the business in person.
Two common approaches:
- Remote-managed EU subsidiary – run the Hungarian entity from the UK and visit periodically
- Relocation-based business – move to Hungary and apply for a residence permit tied to running the company
What UK Entrepreneurs Should Know Before Starting a Business in Hungary
Many UK founders underestimate the administrative layer Brexit added: visas, dual tax filing, and mandatory Hungarian translations. Build these into your plan before you incorporate.
Key areas to plan around:
- Travel requirements – registration can largely be done remotely, but opening a bank account typically still needs an in-person visit
- Remote management vs residence – short business trips need no permit; living in Hungary to run the company day-to-day does
- Timelines – registration, banking, and VAT registration move on separate clocks and rarely finish together
- Local advisors – Hungarian-speaking legal and tax support is essential, because filings must be in Hungarian
- Holding entity vs trading business – a low-maintenance holding company carries far lighter compliance than an active local trading operation
Why Start a Business in Hungary from the UK? (When It Makes Sense)
Hungary isn't a universal solution for every UK firm. It makes sense when the factors below line up with your expansion goals.
- Tax positioning: Hungary's 9% flat corporate tax rate sits in the lowest bracket among European economies tracked by the Tax Foundation
- EU market access: UK companies lost automatic single-market rights after Brexit; a Hungarian entity restores direct EU trading status
- Lower operating costs: Hungary's average full-time adjusted salary was EUR 18,461 in 2024, compared with EUR 39,808 across the EU27 and EUR 53,791 in Germany
- Central location: Hungary borders Austria, Slovakia, Romania, and Serbia, making it a practical base for wider Central European distribution
- Existing trade ties: UK-Hungary trade reached GBP 8.2 billion in 2024, split between GBP 3.2bn of UK exports and GBP 5.1bn of imports
That said, the 9% headline rate doesn't tell the whole story. Hungary also charges 27% VAT, the highest standard rate in the EU, plus a local business tax capped at 2%. Any cost model needs all three numbers, not just the corporate tax figure.
Early Decisions UK Founders Must Get Right When Starting a Business in Hungary
Most problems here come from underestimating post-Brexit complexity rather than poor planning.
Setup Costs and Structure Choice
True setup costs go beyond the HUF 3 million capital deposit. Budget for registration fees, certified Hungarian translation of documents, and attorney costs, since a Kft formation requires notarised or attorney-countersigned paperwork.
Structure choice matters too:
- Kft – minimum capital HUF 3 million, limited liability capped at the contribution
- Zrt – minimum share capital HUF 5 million, suited to larger operations
- Branch office – no separate legal personality; the UK parent remains liable for branch debts
Residence, Tax, and Local Support
A UK director doesn't automatically need a residence permit for short visits. The 90-days-in-180 Schengen rule covers business meetings and admin trips. Living in Hungary to run the company full-time is a different matter and needs a specific permit basis.
The 2011 UK-Hungary Double Taxation Convention remains in force, so the same profits are not taxed twice. Plan this with an advisor before incorporation, not after.
Finally, a registered Hungarian office address and a Hungarian-speaking accountant aren't optional extras. They're required from day one for statutory filings.
How to Start a Business in Hungary from the UK – Step by Step
Common mistakes include assuming pre-Brexit EU rules still apply automatically, underestimating VAT obligations, and skipping fiscal representation checks.
Step 1 – Choose Your Business Structure and Entry Strategy
Compare your options based on liability and scale:
| Structure | Minimum capital | Liability | Best for |
|---|---|---|---|
| Kft | HUF 3 million | Limited to capital contribution | Most UK-owned SMEs |
| Zrt | HUF 5 million | Limited, share-based | Larger operations, future investors |
| Branch office | No separate legal entity | Parent company liable | Testing the market without a new legal entity |
UK citizens can own 100% of a Kft with no shareholder residency restriction. Many founders still pick a branch office for simplicity, when a Kft usually gives cleaner liability separation for trading businesses.
Step 2 – Prepare Documents and Meet Capital Requirements
You'll typically need:
- Valid passport
- Proof of UK address
- Articles of Association
- A registered Hungarian office address
- Certified Hungarian translation of your incorporation documents
Minimum capital for a Kft is HUF 3 million (around £6,500), deposited before or shortly after registration depending on the notary's requirements. Since all filings must be in Hungarian, underestimating translation time and cost is a frequent early misstep.
Step 3 – Register the Company and Handle Visa/Residency Considerations
Registration can be completed remotely through power of attorney, or you can travel to sign in person.
Under Hungary's simplified registration system with statutory model contracts, a court decision can come through in as little as one business day. More complex applications take longer if a judge asks for supplementary information.
For travel, British citizens can enter Hungary visa-free for up to 90 days in any 180-day period, which covers most short business trips. That allowance does not cover extended stays or day-to-day management on the ground—those need a residence permit through Hungary's immigration office.
Step 4 – Open a Hungarian Bank Account
This step usually still requires an in-person visit, and banks run strict anti-money-laundering checks on new corporate accounts.
Expect to provide:
- Certificate of incorporation (often needs to be recent, sometimes no older than 30 days)
- Ultimate beneficial owner (UBO) declaration
- Business plan
- Proof of deposited capital
Founders often wait until registration finishes before preparing bank paperwork. Running both tracks in parallel can save weeks.
Step 5 – Register for Tax, VAT, and Payroll Compliance
Before starting business activity in Hungary, you must register with NAV, the national tax authority, to obtain a tax number. NAV registration typically involves form T201, a certified Hungarian translation of your incorporation certificate, and a specimen signature.
Hungary's standard VAT rate is 27%, the highest in the EU, with reduced rates for specific goods and services. Small businesses under a set annual turnover threshold may qualify for VAT exemption, but this threshold changes periodically, so check the current figure with NAV or an advisor rather than relying on last year's number.
First-year VAT trouble usually comes from missing quarterly filing deadlines after assuming Hungarian cadences match the UK. They don't.
Step 6 – Set Up Ongoing Accounting and Cross-Border Compliance
Once you're trading, you'll need statutory accounting in Hungarian alongside whatever UK reporting your existing business still requires. Running these as two disconnected systems is where most UK founders lose time and accuracy.
VJM Global has supported 250+ UK businesses with entity formation and compliance across 100+ countries, and helps founders keep Hungarian statutory filings and UK-side reporting on one coordinated calendar rather than in separate silos.
Relying only on a UK accountant who does not know Hungarian filing rules often works briefly—until a deadline or translation requirement is missed.
Conclusion
Starting a business in Hungary from the UK is achievable and can move quickly. Brexit has added real visa and dual-compliance complexity that UK citizens need to plan for before registering, not after.
Structure, capital requirements, and tax treaty planning matter more than how quickly you incorporate. Speed without the right foundations just means fixing problems later.
Long-term success depends on consistent compliance on both sides, in Hungary and in the UK. A cross-border partner such as VJM Global can help keep entity, tax, and reporting obligations aligned across both jurisdictions from formation onward.
Frequently Asked Questions
What is the equivalent of an LLC in Hungary?
The Kft (Korlátolt Felelősségű Társaság) is Hungary's closest equivalent to a UK limited company. It requires minimum capital of around HUF 3 million and offers limited liability protection.
Can a UK citizen live in Hungary?
UK citizens are non-EU nationals post-Brexit. You can visit visa-free for up to 90 days in any 180-day period, but living there long-term to run a business typically requires a residence permit.
Is £850 (€1,000) enough for a month in Hungary?
Around €1,000 a month can cover modest living costs outside Budapest, given Hungary's lower cost of living relative to the EU average. Budapest itself tends to run more expensive.
How do I open a company in Hungary as a UK resident?
Choose a structure (usually a Kft), prepare your documents, register with the Court of Registration, and open a bank account. Most steps can be handled remotely via power of attorney.
Do I need to visit Hungary to register a company?
Registration itself can be done remotely. Opening a bank account, and certain residence permit steps, usually require at least one in-person visit.
What taxes will my Hungarian company pay?
Corporate tax sits at a flat 9%, VAT at a standard 27%, and local business tax up to 2% depending on the municipality. The UK-Hungary double tax treaty helps prevent the same profits being taxed twice.
