Hungary, located in central Europe, offers excellent access to the common market of over 500 million people. But starting a business in a country can be difficult without the help of a local person. Hungary has used its ideal location to become a strong backbone of the production, services, and consumption. Excellent infrastructure, ready-made industrial sites, offices, and science parks, coupled with a good balance of labor costs and quality, make it an ideal place to expand firms looking to strengthen their presence in Europe’s largest consumer market. About 250 million people are within 1000 km of Hungary, while more than 500 million EU regular markets can also be reached.
But despite the natural appeal of the Hungarian business, there are few business areas where it can be difficult for foreign companies to navigate. The World Bank and the International Finance Corporation (IFC) rank Hungary among the top 100 countries in the world to facilitate electricity generation, protect investors and pay taxes, so having local knowledge to help navigate these challenging areas is essential. If you want to company formation in Hungary, you will faces few problems.
Starting a Business
Companies should be represented by an attorney when establishing a legal entity in Hungary that will represent the company, produce company documents and prepare all other legal documents. Part of the registration fee (at least HUF 250,000) must be transferred to the bank account indicated at the time of registration. Applications to the registration court must be submitted before establishing the public safety plan.
Obtaining Building Permits
It takes 102 days to issue a building permit and includes 26 travel procedures. Several government departments must complete checks before companies can receive a statement from the municipal planning committee and a letter from the tax office. After all the procedures have been reached, it is necessary to obtain a residence permit and complete the building and Land Registry registration.
The World Bank and the IFC place Hungary in the top 50 countries in the world for easy connection, taking a total of 252 days to complete. Inspections, work, and ELMŰ Hálózati Kft does registration. After signing the network usage contract, they will install the meter and make a final connection.
Registering a place is a specific job of staying in the company, which takes a little over two weeks to complete. Once again, after completing the program, you should seek legal advice.
Apart from the legal rights index, Hungary has a slightly weaker performance regarding access to credit. Private institutions are less than 20% of adults, and there is no public register.
The World Bank and IFC rank Hungary in the 128th place for protecting investors, mainly because of its weak points in disclosure and debt repayment.
Paying taxes can take an average of 27 hours of working time. Local business taxes, rehabilitation fees, tuition fees, and R&D taxes are money that most companies are completely unaware of it.
The cost of cross-border trade is very low, but the time required to complete the process is limited. Exports take an average of 17 days and bring in 19 days, which reduces trade flows to and from the country.
Strengthening Contracts and Debt Restructuring
It takes a little over a year to complete the contracts, and 35 procedures need to be completed before making a decision. It can take up to two years to resolve court cases, and the rate of retaliation is much lower than in the OECD process.
Having a local representative in the country is very important if you do business in Hungary. They can help you go into business, make appointments, work as a translator and be an excellent source of cultural knowledge.