Registering a Hungarian Branch Office
The Hungarian branch of a foreign company has legal capacity, it may be entitled to acquire beneficial rights and may be subject to obligations which have legal binding to the foreign company, specifically it may acquire assets, conclude contracts, file lawsuits and may be litigated against in Hungary.
The corporate name of the Hungarian branch of a foreign company shall indicate the name of the foreign parent company.
A foreign company is entitled to pursue business activities through its branches registered in Hungary. During these business activities, a branch acts in legal relations with the state authorities, third parties and with other branches of the foreign company. The Hungarian branch of the foreign company is a legal entity, which is subject to corporate tax.
The representative of the branch may perform the representation – including the individual or joint power of representation – of the branch under a mandate by virtue of a personal service contract or under employment by virtue of a labour contract.
The following documents are required for the registration of a Hungarian branch of a foreign company:
- the foreign company's instrument of constitution, or the complete text of the instrument of constitution as amended to date, where applicable;
- a document in proof of the foreign company being entered in the commercial register in the country where established (usually a certificate of incorporation);
- the resolution on the foundation of the branch and designating its authorized representative,
andthe officialHungarian translation of the above mentioned documents.
In some cases, original documents detailed above have to be legalised (i.e. diplomatic or consular agents of the country in which the document has to be produced certify the authenticity of the signature, the capacity in which the person signing the document has acted and, where appropriate, the identity of the seal or stamp which it bears; shortly, an ’Apostille’ has to be applied for related to the original documents).
Legalisation (‘Apostille’) may not be necessary when the country of registration of the foreign company has a bilateral agreement with Hungary on civil law documents’ mutual acceptance before national authorities. We will examine that shortly if you find us with your inquiry.
If that is not the case, ‘Apostille’ may be applied for at designated authorities in each country (see at:http://www.hcch.net/index_en.php?act=conventions.authorities&cid=41 ).
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See also: Private limited-liability company (Kft)