Opening a company in Hungary: benefits and the path to a 3-year residence permit

Hungary, located in the heart of Europe, has long attracted entrepreneurs with favorable conditions for doing business. The EU and Schengen country offers not only access to the pan-European market, but also one of the lowest corporate taxes in the region. In addition, starting a company can be the key to obtaining a residence permit (HND), making Hungary particularly attractive to foreign investors.

Initially, founders of Hungarian companies and their family members, can obtain a Hungarian residence permit for 3 years and in just 2-3 months. This is the fastest way to obtain a residence permit in the EU by starting a company.

How to open a company in Hungary: basic steps

1. Choice of legal form

The most popular form is the Kft. (limited liability company). Its registration requires a minimum authorized capital of 3 million Hungarian forints (about 7.5 thousand euros).

It is also possible to choose other forms of legal form, e.g. Zrt. (Closed Joint Stock Company), Bt. (General Partnership) or Nyrt. (Public Joint Stock Company)

Bt. in Hungary: deciphering and peculiarities of this company form

In Hungary, the abbreviation Bt. (full name – Betéti Társaság) stands for “limited partnership” (analogous to Limited Partnership in English-speaking countries). It is a form of business that combines elements of a limited liability company and a general partnership.

The main characteristics of the Bt.

1. Two types of participants:

– General partners (közös tulajdonosok) – have unlimited liability for the company’s debts (personal property).
– Limited partners (betétesek) – liable only to the extent of their contribution (as in Kft.).

2. Authorized capital:

– There is no minimum size, but it must be sufficient for the business.
– Limited partners contribute (in money or property) and general partners manage the business.

3. Registration:

– The process is similar to Kft. but requires the roles of the partners to be specified in the memorandum of association.
– The data of general partners are published in the register, limited partners can remain anonymous.

Pros of Bt.

✅ Flexibility in management (full mates make decisions).

✅ Ability to attract investors (limited partners) without transferring control to them.

Minuses Bt.

❌ General partners risk personal property.

❌ Less prestigious form than Kft. or Zrt. (ZAO).

❌ Not suitable for big business.

Who’s a good fit for Bt.?

• Family businesses where some family members are willing to bear the risks and others are only willing to invest.
• Startups with trusting relationships between partners.
• Projects where it is important to maintain confidentiality for private investors.

Bt. – is a niche form for small businesses with special liability conditions. If you are looking for a classic option with asset protection, it is better to choose Kft. However, for some projects, Bt. may be the optimal solution due to its simplicity and flexibility.

Zrt. in Hungary: what kind of company form is it and who is it suitable for?

Zrt. (Zártkörűen Működő Részvénytársaság) is a Hungarian closed joint-stock company, analogous to the German GmbH or the Russian non-public JSC. This form is designed for medium and large businesses requiring capital raising, but without public offerings.

The main characteristics of Zrt.

1. Share capital and shares

– Minimum capital: 5 million HUF (~12 thousand €).
– Shares: not traded on the stock exchange, can only be transferred with the consent of other shareholders (unless otherwise specified in the charter).

2. Responsibility

– Shareholders are not liable for the company’s debts (only the invested capital is at risk).

3. Management

– The supreme body is the General Meeting of Shareholders.
– The executive body is the Management Board (igazgatóság) or a sole director.
– A supervisory board (felügyelő bizottság) is mandatory if the company has > 200 employees or assets > 500 million HUF.

4. Reporting and auditing

Statutory audit if:

– revenue > 600 million HUF (~1.6 million €),
– assets > 300 million HUF (~800 thousand €),
– staff > 50 employees.

Pros of Zrt.

✅ Limited liability – shareholders do not risk personal assets.

✅ Prestige – suitable for medium and large businesses, investment projects.

✅ Flexibility in management – it is possible to attract investors without a public offering.

✅ Tax benefits – corporate tax as low as 9% (like Kft.).

Minuses Zrt.

❌ High minimum capital (5 million HUF vs. 3 million HUF at Kft.).

❌ More difficult to manage – requires a supervisory board in some cases.

Comparison of Zrt. with Kft. and Nyrt.