Why Hungary
Hungary has the lowest corporate tax rate in the European Union at 9%. It has been a full EU member since 2004. Budapest is a major Central European business hub with solid infrastructure.
Tax System
| Type | Rate |
|---|---|
| Corporate tax | 9% |
| VAT (standard) | 27% (!!) |
| Dividend withholding (qualifying non-residents) | 0% |
| Personal income tax | 15% (flat) |
| Social contributions (employer) | 13% |
Warning: VAT in Hungary is 27% — the highest in the EU. This is a significant factor when selling to B2C clients within the EU.
Who It Is For
- High-profit companies seeking the minimum EU tax rate
- Holding structures (0% withholding on qualifying dividends)
- Trading and manufacturing in Central Europe
- IT companies with B2B EU clients
Cost & Timeline
| Item | Amount |
|---|---|
| Kft. registration | €300–700 |
| Share capital (Kft.) | from HUF 3,000,000 (~€7,500) |
| Annual maintenance | from €600/yr |
| Registration time | 5–10 business days |
Pros & Cons
Pros:
- 9% — officially the lowest corporate tax in the EU
- Full EU member
- 0% dividend withholding for qualifying structures
- Stripe, Wise, PayPal available
Cons:
- 27% VAT — highest in the EU
- Political instability and reputational concerns (Orbán government)
- Share capital requirement of ~€7,500 (higher than some alternatives)
- Language barrier — Hungarian bureaucracy
FAQ
Is Hungary suitable for SaaS startups?
For B2B models — yes. For B2C — 27% VAT adds complexity. For pure tax optimisation on high profits, Hungary beats Cyprus or Ireland on the rate.
How do I open a bank account in Hungary?
OTP Bank, Raiffeisen Hungary, K&H Bank. Possible for non-residents but may require a visit. Wise/Revolut are available as alternatives.