Best Corporate & Commercial Lawyers in Hungary

About Corporate & Commercial Law in Hungary

Corporate and Commercial law in Hungary covers the legal framework for setting up, operating, and dissolving businesses as well as the regulation of commercial transactions. This includes a wide range of matters such as company formation, mergers and acquisitions, corporate governance, insolvency, contract drafting, commercial disputes, and compliance with regulatory norms. Hungarian Corporate and Commercial law is governed by both national legislation and European Union regulations, making it essential for businesses to stay compliant with multiple legal standards.

Why You May Need a Lawyer

There are several situations where individuals and enterprises may require legal assistance in the field of Corporate and Commercial law in Hungary:

• Establishing a business entity, such as a limited liability company (Kft.), joint-stock company (Zrt. or Nyrt.), or partnership
• Reviewing, drafting, or negotiating commercial contracts and agreements
• Dealing with mergers, acquisitions, or restructuring
• Ensuring compliance with local and EU regulations
• Resolving shareholder disputes or managing internal investigations
• Representing interests in litigation or alternative dispute resolution
• Managing bankruptcy, insolvency, or liquidation procedures
• Protecting intellectual property and trade secrets
• Guidance on data protection and privacy laws affecting commercial practices
• Navigating taxation, employment, and labor issues linked to commercial operations

Obtaining legal counsel ensures that your business activities are properly structured and protected from future legal complications.

Local Laws Overview

Hungarian Corporate and Commercial law is primarily regulated by the Civil Code, the Companies Act, the Competition Act, and various tax and labor statutes. Here are key aspects to consider:

• Types of Business Entities: Common forms include limited liability companies (Kft.), joint-stock companies (Zrt. for private, Nyrt. for public), and partnerships (Bt., Kkt.). Each has specific formation, management, and reporting obligations.
• Company Formation: Registration is carried out with the Company Registry Court. The process is streamlined but must meet notary and documentation requirements.
• Corporate Governance: Companies must maintain clear internal structures, including managing directors and supervisory boards, where mandatory.
• Commercial Contracts: These must comply with the Civil Code and may need to be in writing, especially for real estate, certain services, and higher-value transactions.
• Competition Law: Businesses must not engage in unfair market practices. The Hungarian Competition Authority enforces these rules.
• Insolvency: Procedures are well-defined and require specialized legal guidance for both creditors and debtors.
• Taxation: Hungary offers a flat corporate tax rate, but compliance with VAT, local business tax, and transfer pricing rules can be complex.
• Employment Law: Hungarian employment regulations affect commercial operations and should be considered in all HR decisions.
• Intellectual Property: Protection is available under national law and EU regulations, covering trademarks, patents, and copyrights.
• EU Regulations: As a member of the EU, many Hungarian rules incorporate EU directives, particularly regarding consumer protection, data privacy, and competition.

Frequently Asked Questions

What do I need to start a business in Hungary?

You will need to decide on the type of legal entity, prepare corporate documents, establish a registered office, deposit share capital (if applicable), and submit your application to the Company Registry Court.

Can foreigners establish companies in Hungary?

Yes, foreign individuals and entities can establish and own 100 percent of a Hungarian company. Certain sectors may have additional requirements.

What are the common types of companies in Hungary?

The most common are the limited liability company (Kft.) and the private joint-stock company (Zrt.). Partnerships (Bt. and Kkt.) are also available, each with varying liability and governance structures.

How long does it take to register a company?

Company registration typically takes just a few days if all documentation is correct and submitted electronically, though more complex cases may take longer.

Is a Hungarian company required to have a local director?

A Hungarian company does not have to have a local director; foreign nationals can also serve as managing directors. However, at least one representative must have a Hungarian address for service of process.

What are the basic corporate tax rates?

Hungary’s corporate tax rate is one of the lowest in the EU at 9 percent, though additional local business taxes may apply.

Do I need to draft contracts in Hungarian?

While Hungarian is the official language for official filings, contracts between parties can be prepared in any language agreed upon. However, some contracts may need to be translated for official use.

How can I protect my intellectual property?

You can register trademarks, patents, and designs with the Hungarian Intellectual Property Office. EU-wide protections may also apply.

What happens if a company faces insolvency?

Insolvency proceedings must be initiated in accordance with Hungarian law and include restructuring or liquidation options, each with formal steps and creditor involvement.

Can I resolve commercial disputes without going to court?

Yes, alternative dispute resolution methods such as mediation and arbitration are available and often encouraged before pursuing litigation.

Additional Resources

To further assist with Hungarian Corporate & Commercial law, consider contacting the following resources and organizations:

• Hungarian Chamber of Commerce and Industry: Provides information and support for businesses in Hungary
• Company Registry Court: Handles company formation, amendments, and public records
• Hungarian Competition Authority (GVH): Supervises fair competition and antitrust issues
• Hungarian Intellectual Property Office (HIPO): Manages IP registrations and protection
• National Tax and Customs Administration of Hungary (NAV): Administers taxation and related queries
• Ministry of Justice: Sets forth the legal regulations affecting companies and commerce
• Professional legal associations and law firms: Offer expert guidance for specific cases

Next Steps

If you are considering establishing a company or need guidance in any Corporate and Commercial matter in Hungary, it is wise to consult a qualified legal professional. Start by clearly identifying your business needs or legal issue, gathering relevant documents, and preparing a list of questions for your consultation. Seek recommendations or research local law firms specializing in corporate and commercial law. Arranging a preliminary meeting with a lawyer will help you understand your options, potential risks, and the best way forward. Always ensure that your chosen advisor is experienced and well-versed in both Hungarian and EU law applicable to your specific business concerns.