Offshore Companies in Hungary

For offshore companies in Hungary (officially called “Companies Acting Abroad”) the corporate tax shall be 3% (three percent) of the positive tax base.

The requirements to qualify as an offshore company are as follows:

1. The company must be a limited liability company or share company, incorporated with their registered office in Hungary;

2. The company must be registered by the state tax authority as an offshore company, for which it has to meet the following requirements:

- It should carry out trading activities or provide services exclusively outside Hungary, and the other contracting party should not be a Hungarian person or company. – It should employ only domestic lawyers in their domestic state administration and court proceedings. – The majority of the company’s senior executives, members of the board of supervisors, and employees are private persons domiciled in Hungary. The auditor must be Hungarian as well. – It must have a bank account in Hungary at a domestic bank to pay expenses necessary to maintain the office as well as payments to employees, lawyers and auditors, and to the tax office. (It does not mean of course that the offshore company can not have bank accounts in third countries as well.) – The company and its members have no direct or indirect business shares in other Hungarian business associations, and the members of the company have no business premises or commercial representation in Hungary. – No member of the company should be Hungarian, and there should be no domestic person among the members of the company’s members. Even if one of the company’s members is a public company limited by shares, shares amounting to no more than 3% (three percent) of the subscribed capital can be held by domestic person(s).

Offshore companies shall keep their books and prepare their balance sheet in the foreign currency as determined in the contract of association, but the language of the books and balance sheet shall be Hungarian.

An offshore company may purchase the amount of forints necessary for its operation for convertible foreign exchange from a Hungarian Bank. The company can keep its capital in convertible currency.

Natural persons, legal persons or business association without legal personality have the right to form or participate in business entities, regardless whether they are Hungarian or foreigners.