Company Forms in Hungary – A Practical Guide for Foreign Founders
This overview explains the basic company forms in Hungary and what they mean in practice for foreign founders.
Setting up a company in Hungary is not only a formal step.
It is a structural decision that affects liability, control, long-term operation and how clearly business risks are separated from personal responsibility.
Hungarian company law is structured and predictable, but it is not self-explanatory for those who are not familiar with the local legal environment.
Understanding the logic behind company forms is often more important than memorising formal rules.
This article provides a clear orientation.
It does not aim to replace legal planning, but to help foreign founders understand the framework in which Hungarian companies operate.
The logic behind Hungarian company forms
Hungarian law recognises four main company forms.
They differ primarily in two aspects:
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how responsibility is allocated, and
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how clearly the company is separated from its owners as a legal entity.
These differences are not technical details.
They determine how risk is carried, how decisions are made and how the company is perceived by partners, banks and authorities.
Partnership-based structures
General Partnership (Kkt.)
A General Partnership is based on personal involvement and unlimited responsibility.
All partners are jointly and severally liable for the company's obligations, including with their private assets.
This structure relies on trust between partners and is typically used only in very limited, low-risk situations.
For foreign founders, this form is rarely appropriate, as it does not provide a clear separation between private and business risk.
Limited Partnership (Bt.)
A Limited Partnership combines two different roles:
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general partners, who carry unlimited responsibility, and
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limited partners, whose liability is restricted to their capital contribution.
In practice, this structure is often used in small, closely held businesses where one party actively manages the company while another participates financially.
While simpler than other forms, it still involves personal liability on one side, which requires careful consideration.
Capital-based company forms
Limited Liability Company (Kft.)
The Kft. is by far the most commonly used company form in Hungary, especially by foreign founders.
Its core feature is clear: the company has its own legal personality, and the owners' liability is limited to their capital contribution.
This structure offers:
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predictable liability boundaries,
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flexible internal organisation, and
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strong acceptance by banks, business partners and authorities.
For most foreign-owned businesses operating in Hungary, the Kft. provides the right balance between legal security and operational flexibility.
Related:
Company Formation in Hungary – Clarity for Those Taking Their First Steps Here
Company Formation and Business Support
Company Limited by Shares (Rt.)
A Company Limited by Shares is a more complex structure, designed primarily for larger operations.
It exists in two forms:
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Zrt. – privately held company,
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Nyrt. – publicly listed company.
Ownership is represented by shares, and liability is limited to the value of those shares.
This form is typically chosen when scale, investment or corporate governance requirements justify a more formal structure.
For most first-time foreign founders, this form is not the starting point, but rather a later-stage option.
Choosing a structure is not a formality
From a legal perspective, company forms are neutral categories.
From a business perspective, they are strategic tools.
The "right" structure depends on questions such as:
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How much personal risk should remain outside the company?
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How many owners are involved, and how active are they?
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Is long-term growth, financing or restructuring expected?
These questions cannot be answered by templates.
They require understanding both the legal framework and the business context.
Final thoughts
Hungarian company law offers clear options.
What matters is not their number, but the logic behind them.
Foreign founders who understand this logic make better decisions, avoid unnecessary restructuring later and build businesses on solid legal foundations.
If you would like guidance in relation to your own situation, you are welcome to contact me at
lilla.acs@dunalegal.com