Branch Office registration

Registering a Hungarian Branch Office

As a growing and successful business, you must operate in various countries to grow your business. The key to successfully operating in different countries is through establishing an effective and well-managed branch office. 

Operating a branch office is the process of establishing an office outside your company’s headquarters to run specific operations. You can set up a branch office anywhere that has access to reliable telecommunications and other supporting services. For example, if your company operates in the United States, you may also have other offices or branches outside the U.S., such as a subsidiary or affiliate office in another country such as Hungary.

What is a Branch Office?

A branch office is a business location that operates under a separate business entity and address than the company’s headquarters. A branch office is established to run specific operations that are not part of the company’s core business operations. For example, a branch office may run sales and marketing, product development, service delivery, and/or computer operations. 

The Hungarian branch office of a foreign company shall indicate the name of the foreign parent company. It is a legal entity, which is subject to corporate tax. The Hungarian branch of a foreign company falls under the scope of the LXXXI Act of 1996 on the Corporate tax and the tax levied on dividends (Tao. tv.).

Why establish a branch office in Hungary?

There are many reasons to operate a branch office. A branch office can be useful for expanding your operations across multiple geographies. For example, you can have a branch office in Hungary to serve Hungarian markets, to manage a remote operation, or to reduce expenses. 

You may also want to operate a branch office to expand your product and/or service offerings. When operating a branch office, you can better serve the needs of your customers by expanding the types of services that you provide. For example, when your company operates as a wholesaler, you can open a branch office and offer full distribution services.

A branch office can provide several benefits, such as: 

• An additional revenue stream 
• A branch office can generate revenue from services provided to outside clients such as consulting or product sales. 
• Reduce risk 
• If a disaster or other event disrupts operations at the headquarters, the branch office can continue to operate under reduced capacity. 
• Improve operational efficiency 
• A branch office can operate more efficiently than a company’s headquarters, particularly when it comes to pricing, inventory management, and operations.

Types of Branch Office

There are many types of branch offices, including: 

• Manufacturing branch office: A manufacturing branch office is a specialized operation that manages the production process for your company’s products. 
• Sales branch office: A sales branch office is an operation that manages sales for your company’s products or services. 
• Service branch office: A service branch office manages a part of your company’s services such as accounting, human resources, or IT operations. 
• Support branch office: A support branch office supports an existing business function or function in your headquarters. For example, a support branch office may support marketing or customer service operations in your headquarters. 

What kind of documents you need for the registration

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;
• 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, and the official Hungarian translation of the above-mentioned documents.

Establishing Fee: 950 Euro

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See also: Private limited-liability company (Kft)

FAQ for Branch Office Registration