Hungary is quickly becoming a go-to destination for digital entrepreneurs looking to tap into the European market. Its business-friendly tax system, central location in the EU, and affordable operating costs make it an attractive place to launch an online venture.
But before you jump in, there are a few important steps to take—starting with clear business planning, understanding the process of company formation in Hungary, and ensuring you’re set up with the right tax registrations, like a Hungarian and EU VAT number.
This guide walks you through everything you need to know to start your digital business in Hungary the right way.
1. Start With Solid Business Planning in Hungary
Every successful business starts with a plan, and Hungary is no exception. Before filing paperwork or setting up a website, take time to map out your idea in detail.
Start with market research. Are your services or products in demand locally or EU-wide? Hungary gives you access to the broader European market, so consider how your offer fits beyond the local scene.
Next, choose a clear business model. Will you sell digital products, offer consulting, build apps, run an agency, or manage a subscription service? Each comes with different legal and tax implications.
Budgeting is also key. Factor in:
- Local business costs (office, internet, insurance)
- Hiring (freelancers vs. full-time staff)
- Taxes and accounting fees
- Currency considerations (Hungarian Forint vs. Euro)
Finally, research local banks, payment processors, and accounting software that work with Hungarian and EU regulations.
Business planning in Hungary isn’t just about forecasting profits—it’s about avoiding costly surprises later on.
2. What You Need to Know About Company Formation in Hungary
Once your plan is solid, the next step is choosing your legal structure and officially registering your business.
The most common form for digital entrepreneurs is the Kft (Korlátolt Felelősségű Társaság), which is Hungary’s equivalent of a limited liability company (LLC). It offers flexibility, limited liability, and is open to foreign founders.
Key steps in company formation:
- Choose a company name and verify its availability.
- Prepare and notarize your founding documents.
- Open a Hungarian business bank account.
- Deposit the required share capital (minimum HUF 3 million, though it doesn’t have to be paid in full immediately).
- Appoint a managing director and designate a registered office address in Hungary.
For non-residents, a local legal representative may be required during the registration process. You’ll also need a tax ID and, optionally, a statistical code if you’re hiring employees.
Most entrepreneurs use a business law firm or formation service to handle the paperwork, which typically takes 1-2 weeks.
Navigating company formation in Hungary can be smooth with the right local support.
3. Getting Your Hungarian and EU VAT Number: A Must for Digital Businesses
Whether you’re selling digital services, subscriptions, or e-commerce goods, you’ll likely need a Hungarian and EU VAT number.
When do you need VAT registration?
- You’re selling to customers or businesses in other EU countries.
- You exceed Hungary’s VAT threshold (currently HUF 12 million for domestic businesses).
- You’re using services like Google Ads or Meta Ads—platforms that expect your VAT number for proper invoicing.
How to register:
- Once your company is formed, you can apply for a Hungarian VAT number through the National Tax and Customs Administration (NAV).
- To sell across borders, you’ll also need an EU VAT number, which identifies your business for intra-EU transactions.
Make sure your invoices comply with Hungarian VAT law and that you’re filing VAT returns monthly or quarterly, depending on your revenue.
Digital businesses often benefit from the Mini One Stop Shop (MOSS) or OSS system, which simplifies VAT reporting across the EU.
This step is critical—incorrect VAT handling can lead to fines or tax complications.
4. Setting Up Operations: Tools, Hiring, and Payments
Now that your company is legal and tax-registered, it’s time to set up your day-to-day operations.
Team and Tools:
- Decide if you’ll hire locally or use international freelancers.
- Use payroll services or local HR agencies if hiring employees.
- Choose accounting tools that integrate with Hungarian VAT requirements.
Popular options include Számlázz.hu or Billingo—both tailored for local tax compliance and available in English.
Banking and Payments:
Open a Hungarian business bank account—OTP, CIB, and K&H are common choices. If your business is international, consider fintech options like Wise Business, Revolut Business, or Payoneer for easier currency handling.
You’ll also want to set up payment processors like Stripe or PayPal, which work well in Hungary but may require extra verification steps.
5. Staying Compliant and Planning for Growth
Hungary has one of the lowest corporate tax rates in the EU—just 9%. But low taxes don’t mean low oversight. You’ll need to stay on top of local compliance.
Key requirements:
- Monthly or quarterly VAT filings (depending on your setup)
- Yearly corporate income tax reports
- Local bookkeeping in Hungarian (though many services offer English communication)
Work with a local accountant who understands digital business—this saves you from navigating Hungarian tax law on your own.
Scaling:
Hungary’s EU membership makes it a great launchpad. Once you’re established, you can expand to other countries using your EU VAT registration. Digital businesses in particular can scale fast, especially if you use Hungary as your operational HQ and sell remotely across borders.
Conclusion
Starting a digital business in Hungary is a smart move for entrepreneurs who want EU access, low taxes, and manageable startup costs. But it requires careful steps—from smart business planning in Hungary, to handling company formation in Hungary, to registering for a Hungarian and EU VAT number.
The good news? With the right guidance, it’s all very doable.
Whether you’re a solo founder, a remote-first team, or a growing digital agency, Hungary offers a strong foundation to build your business – and scale it across Europe.
