Why open a company in Hungary in 2026

Taxes, pros and cons, and a comparison with Cyprus, Estonia, Poland and other countries

In short: Hungary has the lowest corporate tax in the European Union (9%). A Hungarian company gets access to the entire EU market, is registered within a few days and can be a basis for a residence permit. There are downsides too: the highest VAT in the EU (27%), a local turnover tax and a mandatory accountant. Below we go through everything in detail and compare Hungary with Cyprus, Estonia, Poland, the Czech Republic, Slovakia, Austria and Serbia.

Every year thousands of entrepreneurs choose where to open a company in Europe. The decision depends not only on the tax rate: market access, running costs, banks and how comfortable it is to live in the country yourself all matter. This article is an honest look at what makes Hungary attractive in 2026, who it suits and who would do better to look at other countries.

All rates have been checked against 2026 data. This is a general overview, not tax advice: the best structure always depends on your business and your country of tax residence.

1. 9% corporate tax — the lowest in the European Union

The main reason entrepreneurs look at Hungary is the flat corporate tax rate (TAO) 9%. It is the lowest rate in the EU: on average, companies in Europe pay about 21%. For comparison, neighbouring Austria charges 23%, and Slovakia 21–24% for medium and large companies.

The rate is the same for everyone: a small IT company and a large manufacturer pay the same 9%. Losses from previous years can be carried forward, which matters in the first years of business.

The KIVA regime for small businesses. Companies with up to 100 employees and revenue of up to HUF 6 billion can choose the KIVA tax — 10%. It replaces both corporate tax and the employer’s social contribution tax (13% on salaries). For companies with employees that reinvest their profits it is often more favourable than the standard regime — the choice is best made together with an accountant.

Important: in addition to corporate tax, Hungary has a local business tax (HIPA) — up to 2%. It is calculated not on profit but on adjusted revenue (minus the cost of goods, subcontractor services and materials). The rate is set by the municipality; in Budapest it is usually the maximum — 2%. Take this into account in your calculations: for low-margin businesses this tax can be more noticeable than corporate tax.

2. Comparison with other countries

Below are the key taxes and capital requirements for a limited liability company in the countries most often compared with Hungary.

Country	Corporate tax	Dividend tax (resident individual)	VAT	Min. LLC capital	EU
🇭🇺 Hungary	9%	15% (+13% social contribution tax up to a cap)	27%	3 000 000 Ft (≈ 8 200 €)	yes
🇨🇾 Cyprus	15% (from 2026, previously 12.5%)	5% (0% for non-doms)	19%	no set minimum	yes
🇪🇪 Estonia	0% while profit stays in the company, 22% on distribution	0% (the tax has already been paid by the company)	24%	0,01 €	yes
🇵🇱 Poland	19% (9% for small companies)	19%	23%	5 000 PLN (≈ 1 200 €)	yes
🇨🇿 Czech Republic	21%	15%	21%	1 CZK	yes
🇸🇰 Slovakia	10% / 21% / 24% — depending on profit	7%	23%	5 000 €	yes
🇦🇹 Austria	23%	27,5%	20%	10 000 €	yes
🇷🇸 Serbia	15%	15%	20%	100 RSD (≈ 1 €)	no

Data for 2026. Dividend tax is shown for an individual who is a tax resident of that country; for non-residents it depends on the double taxation treaty.

What the comparison shows

Cyprus was long Hungary’s main competitor, but from 1 January 2026 it raised corporate tax from 12.5% to 15%. On the other hand, the dividend tax for residents fell to 5%, and for non-doms it is not charged at all.
Estonia does not tax profit as long as it stays in the company. But as soon as you pay out dividends, the company pays 22%. This works well if you reinvest profits for years, and less well if you live on business income. In addition, VAT in Estonia rose to 24% in July 2025.
Poland offers 9% for small companies with revenue up to €2 million and for new companies in their first year — but the standard rate is 19%, and dividends are taxed at a further 19%.
Slovakia introduced 10% for profits up to €100,000 from 2025, but above this threshold the rate jumps to 21–24%. There is also a minimum tax — even when making a loss.
Serbia is attractive tax-wise (15%), but is not in the EU: the company will not have an EU VAT number or free access to the single market.
Hungary wins on corporate tax among all EU countries and remains a full member of the European Union — this is its main advantage.

3. How the owner gets paid: dividends

Profit left after the 9% tax can be paid to the owner as dividends. For an individual who is a Hungarian tax resident, the rate is 15% personal income tax. In addition, there may be 13% social contribution tax, but only until the person’s total annual income exceeds 24 times the minimum wage (about HUF 7.75 million in 2026). Above this cap, no social contribution tax is paid on dividends.

If the owner is a tax resident of another country, dividends are taxed under the double taxation treaty between Hungary and that country. It is worth discussing the structure with a tax adviser before paying out dividends.

4. Access to the entire EU market

A Hungarian company is a fully fledged European company. It receives an EU VAT number, can sell goods and services to any EU country without customs, take part in European tenders and work with clients who prefer EU contractors.

For online sales to private customers in other EU countries there is the single OSS system: VAT for all countries is declared in one country, without registering in each one separately.

5. A fast and inexpensive start

Registration in 1–3 working days — once the documents are ready, the application is filed electronically with the Court of Registration.
Registration fee — HUF 0 for electronic registration.
The share capital (HUF 3 million) is the company’s money: it can be spent on the company’s expenses and, if necessary, paid in instalments.
100% foreign ownership — no local partner is needed, and a foreigner can be the director.
Remote setup — by power of attorney; you mainly need to come in person to open a bank account.
Electronic reporting — the tax authority and government bodies work through online portals.

Details on the procedure, timelines and costs are on the page “Company registration in Hungary”.

6. Budapest as a business base

Budapest is right in the centre of Europe: Vienna is about 2.5 hours away by train, Bratislava even closer, and the airport has direct flights to most European capitals. There is a well-developed business infrastructure, many qualified professionals, including English speakers, and a large international community.

At the same time, the cost of living, office rent and hiring staff is noticeably lower than in Vienna, Munich or Paris. For an entrepreneur who wants to live where their company operates, this is a significant advantage.

7. A company as a path to a residence permit

Your own Hungarian company can be a basis for a residence permit for its owner or director. To qualify, the company must carry on real business activity, and the applicant must have proven funds and housing in Hungary. We cover the requirements and procedure in detail on the page “Business immigration”.

8. The downsides, honestly

27% VAT — the highest in the EU. For businesses selling to end consumers in Hungary this is significant. For exports and work with companies in other EU countries the rate often does not matter.
Local business tax of up to 2% is calculated on revenue, not profit — with low margins this is a noticeable burden.
The Hungarian language. Documents and correspondence with government bodies and the tax authority are in Hungarian. It is hard to manage without an interpreter and a local accountant.
Banks. Banks carry out detailed checks on owners. For Russian and Belarusian citizens the procedure is longer and stricter, and EU sanctions apply — the bank needs to be chosen in advance.
A mandatory accountant. Accounts must be kept from the first day, even if the company is not yet active — this is a regular monthly expense.
Share capital is higher than in the Czech Republic or Estonia — although this money stays in the company and can work for the business.

Who a Hungarian company suits

entrepreneurs who work with clients in the EU and want a low corporate tax;
IT companies, consulting and trade with Europe;
those who plan to live in Hungary and see a business as a basis for a residence permit;
companies that need a base in Central Europe for logistics or production.

Who should consider other options:

if you sell mainly to private customers in Hungary with low margins — because of the 27% VAT and the turnover tax;
if you do not plan to take out profits for years — then the Estonian model is worth calculating;
if you do not need the EU market — Serbia may be simpler.

Frequently asked questions

What tax does a company pay in Hungary in 2026?

Corporate tax is 9%. In addition, there is a local business tax of up to 2% of adjusted revenue. Small companies can choose the KIVA regime — 10%, which replaces corporate tax and the social contribution tax on salaries.

Can a foreigner open a company in Hungary?

Yes. A citizen of any country can be the founder and director; no local partner is needed. Registration can be done remotely by power of attorney.

How much does it cost to open a company in Hungary?

The fee for electronic registration is HUF 0. The minimum share capital of a Kft. is HUF 3 million, but this is the company’s money. The main costs are the lawyer’s services, the registered address and the accountant. Our packages are on the Company registration page.

Hungary or Cyprus: which is better?

Since 2026 corporate tax in Cyprus has risen to 15%, while in Hungary it is 9%. On the other hand, Cyprus has lower VAT (19% versus 27%) and dividend tax. The choice depends on where your clients are, whether you plan to take out profits and where you want to live.

Hungary or Estonia?

Estonia does not tax profit while it stays in the company, but when dividends are paid the company pays 22%. In Hungary profit is taxed immediately, but at 9%. If you regularly take out profits, Hungary is usually better; if you reinvest for years, it is worth calculating both options.

Does a Hungarian company give the right to a residence permit?

A company can be a basis for a residence permit for its owner or director if it carries on real business activity. Details are on the Business immigration page.