Want to Start a Company in Hungary? Who Should Own It?

Insights / Doing Business in Hungary / Company Formation

In my previous article, we started with one important question: if you want to live and do business in Hungary, what is the right legal structure for your plans?

Let's say you have made your decision. You want to start a company in Hungary.

Good. Then comes the next question:

Who should own the Hungarian company?

You personally? Or do you already have a company abroad, and that company should become the owner of the Hungarian Kft.?

Both are possible. But they are not the same from a legal and practical point of view.

If you start the company as a private individual, we mainly work with your personal documents. If a foreign company will be the owner, our office also needs to verify the foreign company, its current data and its legal representative.

And this is where I usually ask one very simple question:

In which country is your company registered?

The reason is simple. There is no single rule for every foreign company.

An EU company may be different from a company registered in Singapore. Singapore and Egypt are also two different stories.

In some countries, the Apostille Convention applies. In other cases, different legalisation rules may apply. Hungary and Egypt, for example, have a bilateral legal assistance agreement which can affect the formal requirements for certain Egyptian documents.

This is why I do not recommend starting with a general document list found online.

First tell us where your company is registered. Then our office can tell you what is actually needed.

For foreign corporate shareholders, we normally work with a fresh company extract, not older than 30 days. If a proper translation is needed, we arrange it in Hungary with an authorised translator or translation office.

You do not need to translate everything abroad before contacting us. And you definitely do not need to translate every company document "just in case".

The same applies to legalisation.

Apostille may be required in one case, another form of legalisation may apply in another, while an international agreement may change the requirements again.

This sounds more complicated than it usually is.

You do not need to know these rules. We do.

Once we know who the shareholder will be and where that person or company comes from, we can identify the documents and start working.

If a foreign company will be the shareholder, a simple company extract is normally enough for us to start preparing the Hungarian side. At the same time, the official documents, any necessary legalisation and the translation can be arranged.

This means we can work in parallel. And this is where timing becomes important.

Company registration in Hungary itself can often be quite fast. In international company formations, the foreign documents and translations may take more time.

How much time? It depends.

How much will the additional documents cost? Again, it depends.

The country matters. The language matters. The number and length of the documents matter. And urgency matters too.

If you need a certified translation urgently, for example, the service may cost more.

This is one small detail that people sometimes forget:

Priority has a price.

Of course, every client of our office is important. But if an external service normally takes several working days and you need it tomorrow, there may be an additional cost. This is why I always prefer to know about strict deadlines from the beginning.

I understand urgency very well. I am an impatient person myself. I also like things to happen immediately.

But both personally and as a lawyer, I can say that international company formation does not work by magic.

What we can do is move quickly.

You send the information and documents we ask for. Our office prepares the Hungarian side. The foreign documents and translations can be arranged at the same time. If everyone moves quickly, the whole process can move quickly too.

But we do not skip legal requirements just to save a day.

So let's go back to the original question.

Should you own the Hungarian company personally, or should your existing foreign company become the shareholder?

Do not make this decision only because one option needs less paperwork.

If you already have a real business in Singapore, Egypt or another country, it may make perfect business sense for the Hungarian company to become part of that existing structure.

On the other hand, in another situation, personal ownership may be simpler and more suitable.

The right question is not which option needs fewer documents. The right question is which structure makes sense for the business you want to build in Hungary.

Once we know that, our office can deal with the paperwork.

You do not need to learn Hungarian company law, the Apostille Convention or international document legalisation before starting your business.

Tell us what you want to build and where you are coming from.

We will work out the legal route from there.

Think before acting.

This article is based on the rules applicable at the time of publication. When a foreign company becomes a shareholder of a Hungarian company, document, translation and legalisation requirements may depend on the country of registration and the specific case. Our office therefore checks the applicable requirements individually at the beginning of each company formation.

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Company Formation in Hungary for Foreign Founders: What the Process Actually Looks Like

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Company Formation in Hungary for Foreigners: What You Need to Know Before You Start

Company formation is not the beginning. It is the zero step.