A Kft (korlátolt felelősségű társaság) is Hungary’s version of a limited liability company, and the most common company type for foreigners setting up here. It gives you limited liability and a proper corporate structure, in exchange for more setup than a sole trader. Here is how to form one.
What is a Kft?
A Kft is a separate legal entity, owned by one or more members. Because the company is legally distinct from you, your liability is limited to what you put in, your personal assets are protected if the business runs into trouble. It can be owned and run by a single person, so it works for solo founders as well as partnerships.
What you need
- Share capital of 3,000,000 HUF (about €7,500), with at least 100,000 HUF per founder. It can be cash or in-kind (such as equipment), and you do not always have to pay it all in at once, but the founding documents must set a deadline.
- A registered seat in Hungary. A licensed virtual office is allowed, so you do not need to rent premises straight away.
- A Hungarian lawyer. By law, the founding documents must be drafted and countersigned by an attorney.
- A Hungarian accountant, who is mandatory to keep the books and file returns.
The steps
- Choose a name and activities. Clear a unique company name and define your business activities using the official TEÁOR codes.
- Draft the founding documents. Your lawyer prepares the Articles of Association, covering the founders, seat, activities, capital, and management, and countersigns them.
- File with the Company Registry. The lawyer submits the filing. Registration usually takes one to three business days.
- Register with the Chamber of Commerce. Within five working days of incorporation, the company registers with the Hungarian Chamber of Commerce and Industry.
- Appoint your accountant and open a bank account. Bring on a licensed accountant and open a corporate bank account so you can start trading.
Timeline and cost
From start to finish, forming a Kft typically takes around three to four weeks once your documents are ready. The official registration fee is modest, in the region of €150, but the real costs are professional fees: the lawyer to incorporate the company and the accountant to run it. Company profits are then taxed at Hungary’s 9% corporate rate, the lowest in the EU, with further tax due when you take profits out as dividends. See our Hungary tax rates guide for the full picture.
Using a Kft for your residence permit
If you are applying for the guest self-employment permit, you can base it on your Kft by acting as its managing director. A sole trader registration also works, so the company route makes most sense when you want limited liability or are building something larger. Not sure which fits? Compare them in our sole trader vs Kft guide.
Setting up a company in another language and legal system is one to get right first time. Our business and self-employment service connects you with a licensed Hungarian lawyer and accountant. Book a consultation to begin.
Frequently asked questions
How much capital do I need to set up a Kft?
A Kft requires 3,000,000 HUF of share capital (about 7,500 euros), with at least 100,000 HUF per founder. It can be cash or in-kind, and you do not always have to pay it all in immediately, but the founding documents must set a deadline.
How long does it take to form a Kft in Hungary?
Company Registry registration itself usually takes one to three business days, and the full process, including documents, chamber registration, and an accountant, typically takes about three to four weeks.
Do I need a lawyer and accountant for a Kft?
Yes, both are mandatory. A Hungarian lawyer must draft and countersign the founding documents, and a licensed Hungarian accountant must keep the books and file the company’s returns.
Can I use a Kft for the self-employment permit?
Yes. You can base a guest self-employment permit on your Kft by acting as its managing director. A sole trader registration also qualifies, so choose by the kind of business you are building.