Top 10 Challenges of Doing Business in Hungary

Starting a business and conducting business operations in the country can be somewhat complicated if you do not have the appropriate local help.

Hungary has capitalized on its ideal geographic location to become the core of manufacturing, services, and logistics. An excellent infrastructure, pre-assembled industrial sites and science parks combined with a good balance of labor costs and quality make this country an ideal place for expanding companies to establish their presence in the gigantic consumer market of Europe.

Government incentives (from cash subsidies to tax relief) are available to foreign companies looking to grow in Hungary. In this regard, a favorable investment policy has been created and it has been the driving force behind the country’s economic growth. A competitive and solid tax system along with the modern economy has also proven to be an important attraction factor for international companies looking to grow.

However, despite the attractiveness of the Hungarian commercial environment, there are a few areas in which commercial operations can be difficult to overcome for foreign companies. The World Bank and the International Finance Corporation (IFC) place Hungary out of the 100 best countries in the world in terms of ease of obtaining electricity, protecting investors and paying taxes, which is why it is essential to have local help to overcome these complicated areas.

Start a Company

doing business

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Companies must have a lawyer to represent them when they create a corporate entity in Hungary. The lawyer will represent the company, create the deeds and prepare all other legal documents for you to complete the process of company registration in Hungary. In any event half of the membership sum (at any rate HUF 250,000) must be stored in the ledger demonstrated at the hour of membership. Applications should likewise be submitted to the Registration court before standardized savings can be built up.

Take Care of Building Permits

It takes 102 days to deal with building permits, which involves performing 26 procedures. Numerous intergovernmental departments must perform inspections before companies receive a statement from the Municipal Planning Committee and a letter from the Fiscal Authority. Once the criteria are met, an Occupancy Permit must be obtained and the building registration completed at the Land Registry Office.

Getting Electricity

The World Bank and the IFC rank Hungary among the 50 worst countries in terms of the ease of obtaining an electrical connection, which requires 252 days in total. Once the contract for the use of the electricity grid has been signed, they will install the meter and make the final connection.

Property Registration

The registration of the property is, without a doubt, the most agile task of organizing the residence of the company, since it requires just over two weeks to complete. Once again, legal advice should be sought to complete the process.

Obtaining Credits

Outside the legal rights index, Hungary has quite low indicators in terms of obtaining credit. The coverage of private agencies is less than 20% of adults and there is no public registry coverage.

Investor Protection

The World Bank and IFC place Hungary in 128th place in the world in terms of investor protection, in large part due to low ratings and disclosure rates.

Tax Payment

tax payment

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Completing the payment of taxes may require, on average, 277 hours of the company. The local tax on economic activities, the contribution to rehabilitation, the contribution for training and taxes for Research and Development are levies that most companies do not know.

Marketing in other Countries

The cost of doing business in other countries is relatively low, although the time it takes to complete the procedure is excessive. Exporting merchandise requires an average of 17 days while importing it takes 19 days. Consequently, this decreases the movement of trade inside and outside the country.

Contract Compliance and Insolvency Resolution

Completing contract compliance requires just over a year and involves 35 procedures before a judgment can be issued. The passage of insolvency cases by the court may take up to two years and the recovery rate is well below the OECD standard.


Having a local representative in the country is very important when doing business in Hungary. This representative can help you with the approach to the company, schedule appointments, act as an interpreter and constitute a source of intercultural knowledge.

FirmaX Hungary Group

FirmaX Hungary has the local knowledge to help you cross these mined fields. Whether you want to settle in Hungary or just want to optimize your Hungarian operations, we are specialized in company registration in Hungary with the best price on the market, contact us through:


Telephone: + 36 30 829 16 40

FAX: + 36 1 321 25 42                        

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