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 labor 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,
and the official Hungarian translation of the above-mentioned documents.
In some cases, original documents detailed above have to be legalized (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).
Legalization (‘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).
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.).
Properties |
Subsidiary |
Branch office |
Commercial representation |
Tax number |
|
Legal personality |
Yes, separated legal entities for tax and liability purposes |
Yes, legal capacity, acquire rights for the benefit of the foreign enterprise, assume obligations at the expense of the foreign enterprise |
No, it does not have civil legal personality either. you may not enter into a contract on your own behalf |
- |
|
Foundation required |
YES |
Founder’s decisions |
Founder’s decisions |
- |
|
Hungarian company register |
YES |
YES |
YES |
National Tax and Customs Administration REGISTRATION |
|
Pursuit of legal economic activity, in the pre-company stage |
YES |
NO |
NO |
- |
|
Representation |
Managing director, company manager, senior employee, employee legal relationship (employment relationship) or agency relationship with the Hungarian company |
Branch manager, employee relationship, long-term employment relationship, posting |
Head of a representative office, the employee has a legal relationship with the foreign company, the employer's rights are exercised by the foreign company through the commercial agency |
- |
|
Company note |
Individually or in combination |
Individually or in combination |
Individually or in combination |
- |
|
Share capital |
Min. 3,000,000 HUF |
There is no legal minimum, a foreign founder is obliged to provide continuous assets for the smooth operation |
No legal minimum |
- |
|
Activity |
Pursuit of an economic activity |
No representation activities |
Negotiation and preparation of contracts for and on behalf of the founder: |
- |
|
Responsibility |
Obligations will not normally be the responsibility of the parent company, exceptional underlying liability in the event of a combination of conditions specified by law |
Unlimited liability is connected to the parent company |
Unlimited liability is connected to the parent company |
- |
|
Employer rights |
Managing director or an employee with express authority |
Branch office trough the parent company |
Parent company |
- |
|
Obligation to keep double - entry books |
YES |
YES |
YES |
- |
|
Annual Accounts |
Shall be published separately within 150 days of the balance sheet date |
Shall be published separately within 150 days of the balance sheet date |
YES |
- |
|
Audit |
In case of double bookkeeping and employment of more than 50 employees, as well as net sales of HUF 300 million |
In case of double bookkeeping and employment of more than 50 employees, as well as net sales of HUF 300 million |
Not needed |
- |
|
Taxable |
YES |
YES |
YES |
- |
Please contact us now by email or phone and get answers today to your questions about this topic.
Tel / Facetime: +36 70 907 0477
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See also: Private limited-liability company (Kft)