Company ownership in Hungary – Obligatory share capital increase
Last updated on 10 November 2020.
Owning a Hungarian company has its perks, such as easy commerce with the European market, the low corporate tax, or the low costs of operation. While you enjoy these advantages, you should always make sure you comply with local regulations, even when they change – like the share capital requirement now.
Share Capital Increase
Back in 2013, Hungarian Parliament passed a law requiring the share capital of any Hungarian LLC (“Kft”) be at least HUF 3,000,000 (ca. EUR 8,300). In effect, this was relevant only to new companies set up after March 15 2014. Companies set up earlier were given a grace period – which ends on March 15 2016. As a result, you should raise the share capital of your Hungarian company by then. The modification has to be registered at the court registry, and an attorney has to assist the procedure.
Impact on your company
While the obligatory share capital increase sounds like a big change in legislation, its impact on your company will not be massive. There is no obligation to deposit the full capital in the company bank account; in fact, the whole capital can (still) be spent on company expenses – much the same as e.g. the costs of company formation and all related services (e.g. accounting services, registered office, or a resident permit application for the director, salary of employees, office rent and supply) were deductible from the share capital.
What to do to raise the share capital
In order to successfully raise the share capital of your company, you need to consult your accountant and an attorney. With 10 years of business experience and an extended network of professionals, Helpers can help your company comply with the new regulation smoothly.
If you are already a client of Helpers, just contact your account manager to discuss how to proceed. If not, ask for the help of Lívia Buzás on livia@helpers.hu, or call our office on +36.1.317.8570 to ask for a free consultation and get a tailored quote.
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