Updated
GL-K-06
Glossary · Structures and trusts
Kft - a Hungarian limited company with capital from HUF 3 million
01 / In 30 seconds
The short answer
- What it is
- The Hungarian form of limited liability company
- Equivalent
- A familiar limited company: the company, not personal property, is liable for its debts
- What is required
- Share capital, a registered address, a director, accounting
- Why it is set up
- Business in the country and in the EU, working with local counterparties
- An important nuance
- A company and a residence permit are different procedures
02 / In plain words
What Kft means
A Kft is the Hungarian form of limited liability company, the local equivalent of a familiar limited company. The logic is the same: the company has separate legal personality, and the company itself, not the members’ personal property, is liable for its obligations, unless personal guarantees have been given.
Setting one up requires share capital, a registered address in the country, a director and constitutional documents; the details are entered in the register. The company then keeps accounts and files reports under local rules. The jurisdiction is within the European Union, which is convenient for working with European counterparties and settlements in euro.
As in other countries, registering a company does not equal obtaining a residence permit. These are two different procedures with different requirements. If the company is being set up as part of an immigration plan, it is important to understand in advance what exactly the chosen route assesses: genuine activity, turnover, employees, not the mere existence of a legal entity.
A case from practice
A client opened a company in the EU but did not set up the accounting, and a year later faced penalties for late reporting. The cost of proper support turned out to be less than the cost of putting the situation right.
Why a Kft is set up
- Doing business in the country
- Working with counterparties in the EU
- Settlements in euro within SEPA
- Hiring local employees
- Holding assets through a company
- Proof of source of income
03 / What it covers
What the company needs
Capital
- Share capital
- How it is paid in
- Confirmation
Address and officers
- Registered address
- Director
- Members and shares
Maintenance
- Accounting
- Tax registration
- Annual reporting
Disclosure
- The companies register
- Beneficial owners
- The bank’s check
04 / How it works
How the company is set up
Define the task and structure
Why the company, who the members are, what stakes.
Preparing documents
Articles, address, director's details.
Registration and entry in the register
Registration through a lawyer; details go into the register.
Opening an account
The bank checks the activity, ownership and beneficial owners.
Accounting and reporting
Accounting and returns under Hungarian rules and deadlines.
05 / Key facts
What you need to know
01What it is
A Hungarian limited company
The company, not the members' personal assets, is liable for its debts, unless personal guarantees were given.
02Capital
From HUF 3,000,000
The minimum under the Hungarian Civil Code. It can be paid in cash or in kind.
03What is needed
Address, director, accounting
A registered address in Hungary, a director, constitutional documents and local accounting.
04Residence
A separate procedure
The company gives no right to live in the country. An immigration route assesses activity, turnover and staff.
Common mistakes
Treating a Kft as a route to residence
Choose an immigration route and build the business to its requirements.
Underestimating accounting
Budget for an accountant and filing deadlines from the first month.
Forgetting CFC rules
Check how your country of residence will treat the Kft's profit.
06 / Expert advice
How to prepare in advance
Before registering, determine what the company is needed for and who will keep its accounts: reporting in European jurisdictions requires discipline and costs money. If the company is part of an immigration plan, it is checked against the route’s requirements. And the tax consequences for the owner in their country of residence are checked separately.
What we do for you. We look at the company as part of the overall picture: it may evidence your source of income in the check and at the same time create obligations after the move. We work through both sides before anything is registered.
Anna KovalevskayaLead lawyer for EU citizenship and residency, 12 years of practice
07 / Questions
Frequently asked questions
The Hungarian form of limited liability company, the local equivalent of a familiar limited company.
No. Registering a company and obtaining a residence permit are different procedures with different requirements.
Yes, the company needs a registered address in the country of registration, to which official correspondence is sent.
Reporting is done under local rules and requires professional support. Late filing leads to penalties.
Yes, but the bank will check the activity, the ownership structure and the beneficial owners. A company without clear activity runs into difficulties.
Yes. After a change of tax residence a foreign company may fall under CFC rules in your country of residence.
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