How to set up a KFT in Hungary

The Korlátolt Felelősségű Társaság (KFT) is Hungary's version of a limited liability company, and by far the most common form for small and mid-sized businesses in the country. It has real substance — you're forming a genuine legal entity with share capital, a court registration, and a company seat — but it's also fast to set up and inexpensive to run.

Here's how the process works in practice.

What a KFT actually is

A KFT is a company whose owners' liability is limited to their capital contribution. It has:

• Its own legal personality, separate from its owners
• A minimum share capital of HUF 3,000,000 (~€7,500) — but this is subscribed capital, not something you have to keep sitting in a bank account
• One or more members (tagok) — natural persons or companies, Hungarian or foreign
• At least one managing director (ügyvezető), who runs day-to-day operations

A single-member KFT (egyszemélyes KFT) is common and completely fine.

Step 1: Prepare the founding documents

You cannot form a KFT yourself — a Hungarian attorney (ügyvéd) must draft and countersign the deed of foundation. Expect to pay the lawyer between HUF 100,000 and HUF 300,000 (~€250–750) for the full package, depending on complexity.

The core document is the társasági szerződés (articles of association) if there are multiple members, or the alapító okirat (deed of foundation) for a single-member KFT. It contains:

• Company name (must end in "Korlátolt Felelősségű Társaság" or "Kft.")
• Registered seat address in Hungary
• Business activities, coded by TEÁOR numbers (Hungary's activity classification)
• Share capital and how it's split between members
• Managing director(s) and their signing rights
• Fiscal year

You'll also need:

• Signature specimen (aláírás-minta) for each managing director — attorney-certified
• Address use permit (székhelyhasználati hozzájárulás) from the owner of the seat
• Bank confirmation for any cash contribution paid in before registration
• Tax ID and identification for each foreign member/director

Step 2: Contribute the share capital

The HUF 3,000,000 minimum can be:

• Cash (pénzbeli hozzájárulás) — you can defer up to the entire amount for a limited time under current rules, provided the articles say so, but many banks and counterparties want to see it actually paid in before doing serious business with you.
• In-kind (apport) — assets like equipment, software, or IP, with a member-declared value.

If a member holds 50% or more of the capital, they're personally liable for the unpaid portion until it's contributed.

Step 3: Register with the Company Court

Your attorney submits the electronic registration package to the Cégbíróság (Company Court) via the state e-filing system. Fees:

• Court registration fee: HUF 50,000 (small, standard KFT — sometimes waived under simplified registration)
• Publication fee: HUF 5,000 (or free under simplified registration)

The simplified procedure (egyszerűsített cégeljárás), using a standard template deed, typically completes within one business day. Non-standard deeds go through the general procedure and take up to 15 business days.

Once registered, you get your cégjegyzékszám (company registration number) and adószám (tax number).

Step 4: Post-registration paperwork

Registration is only the beginning. Within the first few weeks you need to:

1. Open a Hungarian bank account — mandatory for a KFT. Bring the deed, registration extract (cégkivonat), signature specimens, and director ID.
2. Register with NAV (the Hungarian tax authority) for VAT status — you'll choose between exempt, general (27%), or KATA/other simplified regimes if eligible.
3. Sign up for e-invoicing (Online Számla) — Hungary requires real-time reporting of every issued invoice to NAV via the Online Számla system. This is not optional.
4. Register with the local municipality for local business tax (helyi iparűzési adó, typically capped at 2% of a modified revenue base).
5. Contract with an accountant (könyvelő) — Hungarian bookkeeping rules are strict and you must file monthly VAT returns if you're not on a quarterly cycle. Expect HUF 30,000–80,000/month for a small KFT.
6. Get a chamber of commerce (MKIK) registration — mandatory, HUF 5,000/year.

Ongoing obligations

• Monthly or quarterly VAT returns via NAV's online portal
• Annual corporate income tax (társasági adó) at 9% — one of the lowest in the EU
• Annual accounts filed with the Company Court by May 31 of the following year
• Real-time invoice reporting to NAV for every issued invoice
• KIVA (small-business tax) at 10% is an option if turnover is under HUF 3 billion — often simpler than the standard corporate + social contribution mix

The catches to watch out for

• The seat matters. Your registered seat address must have an owner-issued permit and will receive all official tax correspondence. Virtual office services exist but pick a reputable one — losing a NAV letter can be expensive.
• Managing director liability. The ügyvezető is personally liable for tax and social security debts if the company can't pay and they didn't file for insolvency in time.
• Foreign directors need a Hungarian tax ID (adóazonosító jel), which requires an in-person or embassy-certified application.
• Cash contributions and dividend payouts are tracked closely. You can't pay a dividend before the annual accounts are approved.

A KFT is a serious business vehicle — you get EU-level credibility and one of the lowest corporate tax rates in the union — but it comes with real Hungarian compliance overhead. If you're going to run one, budget for an accountant from day one.