Which countries in the EU have the lowest corporate income tax rate?

Currently, the four countries with the lowest corporate income tax rates are;

  1. Hungary: Hungary has a corporate income tax rate of 9% for companies with annual profits up to HUF 500 million (approximately €1.36 million) and 15% for profits exceeding that threshold.
  2. Bulgaria: Bulgaria has a flat corporate income tax rate of 10%.
  3. Cyprus: Cyprus has a corporate income tax rate of 12.5%, which is one of the lowest in the EU.
  4. Ireland: Ireland has a corporate income tax rate of 12.5%, which has contributed to its reputation as a business-friendly destination.

What are the steps to incorporate a company in Hungary?

  1. Company Name and Structure:
    • Choose a unique name for your company that complies with Hungarian naming regulations.
    • Determine the appropriate legal structure for your company, such as a limited liability company (Kft.) or a joint-stock company (Nyrt.).
  2. Registered Office:
    • Provide a registered office address in Hungary where official correspondence and documents can be sent.
  3. Shareholders and Directors:
    • Identify the shareholders and directors of the company. At least one director must be appointed, and there are no specific restrictions on foreign ownership or directorship.
  4. Articles of Association:
    • Prepare the Articles of Association, which outline the company’s internal regulations, including share capital, shareholder rights, company purpose, and decision-making processes. It is recommended to seek legal assistance to draft the Articles of Association.
  5. Share Capital and Bank Account:
    • Determine the minimum share capital required for your chosen legal structure. For a limited liability company (Kft.), the minimum share capital is HUF 3 million (approximately €8,200). You must deposit the share capital into a Hungarian bank account and obtain a bank certificate verifying the deposit.
  6. Notarial Deed:
    • Visit a Hungarian notary public to execute a notarial deed. This step requires the physical presence of all shareholders and directors or a power of attorney if represented by someone else. The notarial deed includes the company’s establishment, share capital, Articles of Association, and other relevant information.
  7. Registration:
    • Submit the necessary documents, including the notarial deed, Articles of Association, bank certificate, and identification documents of shareholders and directors, to the competent regional court or the Hungarian Central Electronic Company Information System (Cégkapu) for registration.
    • Pay the applicable registration fees.
  8. Tax Registration:
    • Register your company for taxation purposes with the Hungarian Tax Authority (NAV). This includes obtaining a tax identification number and registering for value-added tax (VAT) if necessary.
  9. Additional Registrations and Permits:
    • Depending on your business activities, you may need to register for specific licenses, permits, or sector-specific regulations. Examples include trade licenses, special permits for certain industries, or data protection registrations.

If you would like advice or information on this jurisdiction, please contact us.

If your decision to incorporate a company in Hungary is made, contact us and we will guide you through the process, ensure compliance, and provide personalized service for allowing you to incorporate an Hungarian company efficiently.

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