Hungary
Hungary has the lowest corporate tax rate in the EU (9%) and a flat 15% personal income tax, which makes a Hungarian Kft paying out to a Budapest-based owner one of the cheapest legal setups inside the Union. The price is paperwork in Hungarian, 27% VAT and a new government reviewing parts of the old rulebook.
Our verdict
Great if you’re an EU citizen (or can afford a residence route) who wants to actually live in Budapest and run a real company: 9% plus 15% beats most of Europe. Skip it if you want to stay abroad and just hold a Hungarian company – non-residents lose 15% on dividends – or if you need a founder visa: the cheap White Card excludes Hungarian company owners.
Great for
- EU citizens who want to live in Budapest and run their company there
- Profitable service businesses that pay out most of their profit
- Investors with €250,000 who want a 10-year permit without minimum stay
Skip it if
- Owners who stay abroad and only want a low-tax company
- Non-EU founders who need a cheap visa to run a Hungarian company
- Businesses selling to consumers – 27% VAT is the EU’s highest
Key numbers at a glance.
- Corporate tax
- 9%
- plus local business tax up to 2% of adjusted revenue
- KIVA (small business tax)
- 10%
- alternative base: payroll plus dividends paid; up to HUF 6bn revenue, 100 staff
- Dividend WHT
- 0% / 15%
- 0% to companies, 15% to non-resident individuals (treaties can reduce)
- Personal income tax
- 15%
- flat; dividends also 13% social contribution tax up to a cap
- VAT
- 27%
- highest standard rate in the EU
- Setup time
- 1–5 working days
- 1 day with template articles, via a lawyer
- Running cost
- ≈ €2,500–4,000/yr
- accounting, registered seat, filings
- Minimum stay
- 183 days/year
- for tax residency (Guest Investor permit: none)
- Currency
- HUF (forint)
The Nerdy Index.
15 criteria, each scored 0–10 by a published formula or rubric. Pick who you are – the index re-weights what matters for you.
CompanyResidence
Company 71/100
Tax on distributed profits24.2% 4/10
Corporate tax plus dividend withholding on €100,000 profit paid out to a non-resident owner. Transparent entities (US LLC) pay nothing at company level – the owner pays at home, so they get a neutral 5.
Tax on reinvested profits10.8% 6.9/10
Tax while profits stay in the company (Estonia and Georgia: 0%).
Running cost≈ €3,000 / year 8/10
Typical yearly cost to keep a small trading company compliant: registered office, accounting, tax filings, audit if mandatory, government fees. Excludes local staff and office rent.
Context: Double-entry bookkeeping and monthly/annual returns (accountants typically charge a few hundred euros a month for a small Kft), registered-seat service and the annual report. Audit only above the size thresholds.
Setup speed & remote formation≈ 3 working days 10/10
Typical working days from signed documents to a registered company. +1 point (max 10) if it can be done fully remotely.
Context: A lawyer must countersign and file the articles electronically; with the statutory template the court of registration decides within one working day, otherwise within 15. Can be done by power of attorney.
Banking accessNerdy assessment 7/10
How easy it is for a foreign-owned company to open and keep a business account (local bank or regulated EMI) that works for international payments.
Our assessment: OTP, K&H, Raiffeisen and others open accounts for foreign-owned Kfts, usually in person with the managing director and a few weeks of KYC. EMIs fill the gap for international payments.
Reputation & treaty network83 treaties, on no EU or FATF list 9.7/10
Number of double tax treaties in force, minus penalties for blacklists that make banks and tax offices nervous: EU list of non-cooperative jurisdictions (Annex I), EU watchlist (Annex II), FATF grey list.
Context: Hungary has 83 tax treaties in force (not with the US since 2024) and is on none of the EU or FATF lists; ongoing EU rule-of-law disputes make some counterparties ask more questions.
Substance burdenNerdy assessment 7/10
How much real presence (director, office, staff, board meetings) the company needs locally to be respected as tax resident there and to keep the bank happy. Higher score = lighter burden.
Our assessment: A registered-seat service is legal and common, and one managing director is enough. For the company to be respected as Hungarian, management should really happen in Hungary.
Residence 62/100
Personal tax for a new resident15% 6.7/10
Effective tax a newly arrived resident pays on €100,000 of income from their own (foreign or local) company, using the best regime realistically available to an entrepreneur (non-dom, flat tax, territorial, special regime). Social security excluded.
Context: Resident owner taking dividends from a Hungarian Kft: 15% personal income tax. The 13% social contribution tax on dividends is left out here (social security excluded) and stops once annual income reaches 24 minimum wages (about €20,000).
Residency accessNerdy assessment 5/10
How realistic it is for a non-EU entrepreneur to get a residence permit that also gives tax residency: requirements, cost, time, approval odds. EU citizens usually have it easier – noted in the reason.
Our assessment: EU citizens just register. Non-EU founders face a split: the €3,000/month White Card forbids Hungarian company shares, the Guest Investor route costs €250,000, and self-employment permits need staff or a strong case.
Minimum stay183 days / year 4/10
Days per year you need to spend there to keep your permit and your tax residency (whichever is stricter, using the most flexible programme).
Context: You’re Hungarian tax resident with 183 days a year, or earlier if your only permanent home or centre of vital interests is there. The Guest Investor permit itself has no minimum stay.
Cost of living53.2 (Budapest) · Budapest 6.5/10
Numbeo Cost of Living Index (excl. rent, New York = 100) for the city most expats choose.
Context: Budapest is cheaper than Vienna or Munich but pricier than Bucharest or Sofia; restaurants and services are good value, imported goods less so.
Safety66.4 (Budapest) · Budapest 6.6/10
Numbeo Safety Index for the same city (0–100, higher is safer).
Context: Budapest feels safe in most districts day and night; watch out for pickpockets and tourist-trap bars in the party district.
Rule of law & stability57th percentile 5.7/10
World Bank Worldwide Governance Indicators, Rule of Law percentile rank (0–100). Measures how predictable courts, contracts and property rights are.
Context: Commercial courts work, but independence concerns have led the EU to freeze funds (WGI 2025 Rule of Law score 62.2, percentile rank among 215 economies).
English in daily life & businessEF EPI 590 (high) 7.6/10
EF English Proficiency Index score. Countries where English is an official or everyday business language count as 700.
Context: In Budapest’s business and startup scene English is common; offices, landlords and older Hungarians often speak only Hungarian or German.
Mobility & long-term optionsNerdy assessment 8/10
What the residence gives you beyond the country: Schengen/EU access, permanent residence and citizenship path, passport strength of a future citizenship, dual citizenship allowed.
Our assessment: EU and Schengen access; naturalization after eight years of residence with a constitution exam in Hungarian; dual citizenship is allowed.
Numbers checked September 2026. Click any row for the formula, our reasoning and the source. How the Nerdy Index works
Residency & visa routes.
EU/EEA registration
EU citizens can live and work in Hungary freely; after three months they register their residence with the immigration office and receive a registration certificate.
Guest Investor residence permit
For non-EU investors: at least €250,000 in certificates of a Hungarian real estate investment fund (held for at least five years) or a €1 million donation to a university foundation. Ten-year permit, renewable, no minimum stay; work and running a company are allowed. The €500,000 property option was scrapped before it launched, and the new government has signalled a review.
White Card (digital nomads)
For non-EU remote workers employed abroad or owning a profitable foreign company, with at least €3,000 net a month for the last six months. One year, renewable once; no family reunification, no path to permanent residence – and holders may not own shares in a Hungarian company.
Guest self-employment / Hungarian Card
Non-EU owners who run their own Hungarian company can apply as self-employed or managing director – typically with a business that employs at least five local staff or can show the director’s presence is essential. Demanding, and usually a lawyer’s job.
Why Hungary
- 9% corporate tax – the lowest in the EU
- Flat 15% income tax, capped social contribution on dividends
- No withholding tax on dividends to foreign companies, 83 tax treaties
- Budapest: big-city culture at a moderate cost of living
- Guest Investor permit with no minimum stay
- EU and Schengen member
Watch out for
- 27% VAT, the highest in the EU
- Local business tax adds up to 2% on revenue-based figures
- Everything official in Hungarian; a lawyer is mandatory to found a company
- White Card excludes Hungarian company owners; founder permits are demanding
- Political change: wealth tax planned from 2027, rule-of-law disputes with the EU
Hungary quietly holds an EU record: 9% corporate income tax, the lowest in the Union. Add a flat 15% income tax and a capital that looks like Vienna at a discount, and you get one of the cheapest legal ways to run and live off a company inside the EU. The fine print is Hungarian – literally – and since the change of government in 2026 some of the rules are moving again.
Is it for you?
Hungary works best as a package: company in Budapest, owner in Budapest. Split the two and most of the advantage leaks away.
You win if:
- You move there and pay yourself dividends. 9% corporate tax plus 15% personal tax lands around 24–27% in total on profit you take home – with no progression, however much you earn.
- You’re an EU citizen. You can move, register and found a Kft without any permit. Budapest is a two-hour flight from most of Europe.
- You’re a non-EU investor with €250,000. The Guest Investor permit gives ten years of residence with no minimum stay – rare in the EU.
You lose if:
- You want to stay abroad and just hold a Hungarian company. Non-resident individuals pay 15% on dividends at source (unless a treaty helps), then your home country taxes the rest. And if you manage it from home, your home country taxes the company too.
- You’re a non-EU founder looking for a cheap visa. The White Card for digital nomads explicitly bans holders from owning shares in a Hungarian company.
- You sell to consumers. 27% VAT is the highest standard rate in the EU.
The company
Entity types that matter
- Kft (korlátolt felelősségű társaság). The Hungarian limited company and the one you want. Minimum share capital HUF 3 million (about €7,500), one managing director is enough.
- Egyéni vállalkozó (sole trader). For residents only; taxed personally, with several simplified regimes. Not suited to international setups.
- Zrt/Nyrt. Share companies for bigger ventures and investors.
How profits are taxed
The Kft pays 9% corporate income tax on its profit. On top, municipalities levy a local business tax (HIPA) of up to 2% on a base of revenue minus cost of goods, materials and subcontractors – Budapest charges the full 2%. It’s deductible for corporate tax, and for a lean service company it lands at roughly 2% of profit.
Small companies can choose KIVA instead: 10% on a base made up mainly of payroll costs and dividends paid out. It replaces corporate tax and the employer’s social contribution tax, which suits companies with staff or those that reinvest. From 2026 it’s open to companies with up to HUF 6 billion revenue and 100 employees. Whether it beats 9% + 2% is a calculation for your accountant.
Worked example: €100,000 profit, owner lives in Budapest
| Step | Resident owner | Non-resident owner |
|---|---|---|
| Profit | €100,000 | €100,000 |
| Local business tax (2%, simplified) | €2,000 | €2,000 |
| Corporate tax 9% | €8,820 | €8,820 |
| Available for dividends | €89,180 | €89,180 |
| Dividend tax 15% | €13,377 | €13,377 (WHT, treaty may reduce) |
| Social contribution tax 13% (capped) | ≈ €2,500 | – |
| Net to you | ≈ €73,300 | ≈ €75,800, then taxed at home |
| Total Hungarian burden | ≈ 27% | ≈ 24% |
The 13% social contribution tax on dividends only applies until your total income for the year reaches 24 minimum wages – about €20,000 in 2026 – so it’s capped at roughly €2,500. Dividends to a foreign company shareholder carry no withholding tax at all. Run your own numbers in the tax calculator.
Setup and timeline
- Hire a Hungarian lawyer. Countersigning and electronic filing by a lawyer is mandatory.
- Registered seat. Your own address or a registered-seat service (common and legal).
- File with the court of registration. With the statutory template articles, registration comes within one working day; with custom articles within 15.
- Tax number, bank account, capital. Pay in the capital, register for VAT if needed (there’s a small-business VAT exemption for low turnover), and set up bookkeeping.
A power of attorney means you don’t have to be there, although many banks want the managing director in person.
Running costs
Expect roughly €2,500–4,000 a year: double-entry bookkeeping with monthly and annual returns, the annual report, registered seat and the occasional lawyer’s fee. Audits only kick in above size thresholds.
Banking
OTP, K&H, Raiffeisen, MBH and others open accounts for foreign-owned Kfts, usually in person and after a few weeks of KYC. Documents may need translation. EMIs cover international payments. See our offshore banking guide.
Substance
A registered-seat service and one managing director satisfy the law. To be respected as Hungarian for tax, though, the company should be managed in Hungary – ideally by you, living there. See place of management.
Living there
Residency routes
| Route | Who | Key requirement | What you get |
|---|---|---|---|
| EU registration | EU/EEA citizens | Register after 3 months | Right to live and work |
| Guest Investor | Non-EU investors | €250,000 in a real estate fund (5-year hold) or €1m donation | 10 years, renewable, no minimum stay, may work and run a company |
| White Card | Non-EU remote workers | €3,000 net/month, employer or company abroad | 1 year + 1, no Hungarian company shares, no permanent residence |
| Guest self-employment | Non-EU owners/managers | Business with 5 local staff or proof the director is essential | Up to 3 years, no permanent residence |
The Guest Investor scheme started in July 2024; the €500,000 property option was scrapped before it launched. The government elected in April 2026 has signalled a review of immigration rules, so check the current status before you invest.
Personal tax
A flat 15% on almost everything: salaries, dividends, capital gains, interest. Salaries also carry 18.5% employee social security and 13% employer social contribution tax, which is why most owner-managers pay themselves mainly in dividends. There’s no special regime for newcomers.
On the horizon: the new government plans a 1% annual wealth tax on net assets above HUF 1 billion (about €2.8 million) for Hungarian tax residents, expected from 2027. The bill was due in parliament in autumn 2026.
Days and residency
You’re Hungarian tax resident with 183 days a year, or sooner if your only permanent home or your centre of vital interests is in Hungary. Leave your old tax home properly – see tax residency explained.
Healthcare, cost of living and daily life
Residents who pay contributions are covered by the public system (NEAK); most expats add private clinics, which are good and affordable. Numbeo puts Budapest at 53.2 excluding rent – cheaper than Vienna or Munich, pricier than Bucharest – and rates it fairly safe (66.4). Daily life means thermal baths, a strong café culture, great public transport and a language that doesn’t resemble anything you know. In the business and startup scene English works; at offices and with landlords, bring a Hungarian speaker.
The catches
Know these before you move
White Card trap.
Digital nomad permit holders may not own shares in a Hungarian company. Founders need another route.
Local business tax.
Up to 2% on a revenue-based figure – with thin margins it can be more than 2% of profit.
27% VAT.
Fine for B2B, painful for consumer businesses.
Hungarian-only admin.
Lawyer mandatory for founding, most official documents in Hungarian.
Political change.
A new government since May 2026, a planned wealth tax from 2027 and a review of immigration schemes. Build in flexibility.
Home-country rules.
Moving from Germany can trigger exit tax; a Kft managed from abroad is taxed there, and 9% can count as low-taxed under CFC rules for passive income.
No US treaty.
US citizens and US-source income face double-tax risk.
Step by step
Company and move to Budapest
Check your residence route
EU citizen? Simple registration. Non-EU? Guest Investor, self-employment permit or a job – not the White Card if you’ll own the Kft.
Plan your exit
Deregistration and exit tax at home, timing of the move, health insurance.
Found the Kft
Hungarian lawyer, registered seat, template articles, HUF 3 million capital. Registration in 1–15 working days.
Open a bank account and set up accounting
Local bank with the managing director present, an accountant for monthly returns, VAT registration if needed.
Decide 9% + HIPA or KIVA
Let your accountant compare both for your payroll and payout plans.
Register your residence and become tax resident
Address registration, tax ID, health insurance – then pay yourself dividends at 15%.
FAQ
Is Hungary’s 9% the real rate?
It’s the headline corporate rate. Add up to 2% local business tax, so about 11% for a typical service company – still the lowest in the EU.
Can I use Hungary without moving there?
You can own a Kft from abroad, but non-resident individuals pay 15% on dividends and your home country will likely tax the company if you manage it from there. Hungary works best if you live in Budapest.
Can a digital nomad on the White Card run a Hungarian company?
No. White Card holders may not hold shares in a Hungarian company or work for Hungarian employers.
Will Hungary introduce a wealth tax?
The government plans 1% a year on net assets above HUF 1 billion (≈ €2.8 million) from 2027. Details like valuation and exit rules were still open in September 2026.
Want to know whether Budapest beats your other options? Compare in the Jurisdiction Finder or book a strategy session. This guide is general information, not tax or legal advice.
Sources
- PwC Worldwide Tax Summaries – Hungary, corporate income
- PwC Worldwide Tax Summaries – Hungary, withholding taxes
- PwC Worldwide Tax Summaries – Hungary, individual other taxes
- NAV – double taxation treaties of Hungary
- Immigration and Asylum Office – White Card
- Immigration and Asylum Office – guest investor permit
- Immigration and Asylum Office – guest self-employment
- Helpers Finance – KIVA in 2026
- EY – Hungary plans wealth tax for individuals
Sources & fact check.
Every number on this page comes from one of these. Last checked September 2026. Tax law changes – confirm with a licensed advisor before acting. Nothing here is tax or legal advice.
- Official NAV – double taxation treaties of Hungary 83 treaties in force, US treaty not applicable nav.gov.hu
- Official Immigration and Asylum Office – White Card €3,000 income, 1+1 years, no Hungarian company shares oif.gov.hu
- Official Immigration and Asylum Office – guest investor permit Guest Investor residence permit oif.gov.hu
- Official Immigration and Asylum Office – guest self-employment permit for self-employed and managing directors oif.gov.hu
- Advisor PwC Worldwide Tax Summaries – Hungary, corporate income 9% CIT, local business tax up to 2%, innovation contribution taxsummaries.pwc.com
- Advisor PwC Worldwide Tax Summaries – Hungary, withholding taxes no WHT on dividends to companies taxsummaries.pwc.com
- Advisor PwC Worldwide Tax Summaries – Hungary, individual other taxes 13% social contribution tax on dividends and cap taxsummaries.pwc.com
- Advisor Helpers Finance – KIVA in 2026 KIVA rate and 2026 thresholds helpersfinance.hu
- Advisor EY – Hungary plans wealth tax for individuals planned 1% wealth tax above HUF 1 billion ey.com
- Index EU list of non-cooperative jurisdictions not on Annex I or II consilium.europa.eu
Similar to Hungary: the closest alternatives.
EURemote setup€€€
Romania
1% turnover tax for micro-companies under €100,000, 10% flat income tax and EU living costs from the bargain bin.
Corp. tax16%Dividends16%Residency
Open the guide
EUEasy residency€€€
Portugal
EU base with easy visas and IFICI: 20% flat for 10 years – if your work qualifies.
Corp. tax19%Dividends25%Residency
Open the guide
EU€€€
Greece
Half your income tax-free for seven years, 5% on dividends – or €100,000 flat on all foreign income.
Corp. tax22%Dividends5%Residency
Open the guide
Ready for Hungary?
Already know what you want to set up? Tell us and we’ll send you one fixed quote from a vetted, licensed partner in the right jurisdiction. Not sure yet? Book a strategy session first – it’s credited if you go ahead.
- Free and non-binding
- Reply within two working days
- One contract, one invoice
- We never sell your data