Foreign enterprises with a seat outside of Hungary are entitled to incorporate a branch in Hungary for the purpose of practicing business activity. The Hungarian branch is the organisational unit of the founding foreign enterprise with an independent management that is registered in the Hungarian Company Registry as the branch of the foreign enterprise.
The foreign enterprise as the founder of the Hungarian branch is entitled to practice its business activities in Hungary through its Hungarain branch(es). The Hungarain branch has a legal personality, it is entitled to acquire rights and to accept obligations to the account of the founding foreign enterprise.
INCORPORATION OF THE HUNGARIAN BRANCH
For the establishment of a Hungarian branch the corporate documents shall be signed by the foreign enterprise as the founder of the Hungarian branch and the appointed representative(s) of it. The representative of the founder and the appointed representative of the Hungarian branch are not obliged to travel to Hungary to sign the corporate documents, they are entitled to sign the documents abroad. In this second case the form of the execution of the corporate documents shall comply with the relevant Hungarian law. Please note that the Hungarian branch shall open a bank account in Hungary within 8 days after the registration of the Hungarian branch in the Hungarian Company Registry.
COMPANY REGISTRATION PROCEEDING
After the proper execution of the corporate documents the electronic company registration proceeding shall be initiated by the legal representative of the branch by submitting the corporate documents to the competent court of company registration. Legal representation is mandatory during the proceeding. The duration of the procedure before the court of company registration is 15 working days. The Hungarian branch will be formed by its registration in the Hungarian Company Registry.
After submitting the corporate documents to the court of company registration, the Hungarain branch gets its tax number and company registry number.
COSTS OF THE PROCEEDING
In connection with the incorporation of the Hungarian branch the following costs may arise:
The duty in the amount of HUF 50,000 (approx. EUR 166,66) and the cost of publishing the final decision of the court of company registration in the Company Gazette amounting to HUF 5,000 (approx. EUR 16,66) shall be payed before initiating the proceeding before the court of company registration.
In case of that the parties decide to sign the corporate documents abroad, extra costs may arise depending on the place of the signature and the relevant provisions of the Hungarian law regarding the necessary form of the signature.
The certified Hungarian translation of the founders’ (the foreign enterprise) company extract and the founders’ resolution about the incorporation shall be attached to the application form as well by the time of initiating the proceeding before the court of company registration.
OPERATION OF THE HUNGARIAN BRANCH
The founder of the Hungarian branch office shall provide the assets that are necessary for the operation of the branch and the settlement of the debts of the branch to the Hungarian branch office. The amount of the share capital of the Hungarian branch is not regulated by law so that the branch may be incorporated by any amount of contribution. The founder and the Hungarian branch are unrestrictedly as well as jointly and severally liable for the debts arisen in connection with the activity of the branch.
In case you have any questions, please do not hesitate to contact me.