Key factors contributing to Hungary’s top ranking include a low corporate tax rate of 9%, an affordable cost of living, a positive economic growth forecast, and short business registration timelines. Typically, entrepreneurs can establish a business in Hungary in about 7 days. For foreign nationals, this process may extend to up to 15 days due to language-related issues.
Existing challenges. According to the Ministry for National Economy of Hungary, the main obstacles faced by foreign entrepreneurs are related to language issues while going through administrative procedures. Thus, to assist English-speaking investors, significant changes are required.
Suggested improvements. The government aims to streamline the company registration process and to ensure a one-day company establishment in English.To fulfil the goal, three main steps were worked out:
- Creating contract templates in English that will allow foreign investors to establish companies in just one day.
- Compiling a standardised document in English describing admissibility of foreign documents during company registration in Hungary.
- Allowing entrepreneurs to choose the currency used to establish companies in contract templates.
The Ministry for National Economy of Hungary is developing the corresponding legislation and procedures. Authorities anticipate that reducing administrative burdens will boost Hungary’s competitiveness and increase foreign investment inflows.
Hungary residence permit for foreign investors. Starting in 2024, third-country entrepreneurs who establish businesses in Hungary are eligible for a residence permit by business registration called a guest self-employed residence permit. Residency is initially granted for one year and can be extended for up to two additional years.
To obtain a residence permit, the investor must go through the following steps:
- create a business plan demonstrating the investor’s expected monthly income from company of at least €1,500;
- open a corporate bank account in Hungary during a personal visit;
- register the company and enter into agreements with Hungarian partners and contractors;
- obtain a type D visa and travel to Hungary to apply for a residence permit.
The guest self-employed residence permit does not initially allow for family inclusion. A spouse and minor children may join the entrepreneur during the permit extension process after one year. After permit expiration, the entire family must leave Hungary and submit a new application.
For more favourable conditions, foreign investors can opt for a Hungary Golden Visa. The permit of this type grants residency to the investor’s entire family and is valid for 10 years, extendable for up to an additional 10 years. Holders of the Hungary Golden Visa are permitted to establish and operate businesses within the country.
