Hungary at a glance
Default split
Proportional to capital
Startup entity
Korlátolt Felelősségű Társaság (Kft.)
Minimum capital
HUF 3,000,000 (~€7,500)
Community property
Yes
Formation cost
HUF 100,000–300,000 (~€250–€750)
Key legislation
Polgári Törvénykönyv (Ptk.) 2013, Act V of 2013 on the Civil Code
Hungary has a flat 9% corporate tax rate, the lowest in the EU. The country offers a simplified formation process for Kft. companies using standardized articles of association (mintaszerződés). Hungary's Civil Code was modernized in 2013, consolidating company law and civil law provisions. Budapest is becoming a competitive startup hub due to low costs and EU access.
Default partnership rules in Hungary
In a Hungarian közkereseti társaság (Kkt., general partnership), profits are distributed proportionally to each partner's capital contribution by default (Ptk. §3:88(2)). Partners are jointly and severally liable for partnership debts. The partnership must be registered in the cégnyilvántartás (company register). A partnership agreement (társasági szerződés) is required for registration. Hungarian partnership law is integrated into the Civil Code (Ptk.).
In Hungary, profits are split proportionally to capital contributions by default. This means a partner who invested 80% of the capital would receive 80% of the profits. While this may seem more intuitive than the equal-split default in some countries, it still fails to account for non-cash contributions like time, expertise, and relationships. A written partnership agreement should address all types of contributions.
Korlátolt Felelősségű Társaság (Kft.) in Hungary
The Kft. (Korlátolt Felelősségű Társaság) is the standard entity for Hungarian startups. Minimum share capital is HUF 3,000,000 (approximately €7,500). Simplified formation using standardized articles (mintaszerződés) costs HUF 100,000 and can be completed within days. Custom formation with a lawyer costs HUF 200,000–300,000. A lawyer (ügyvéd) must countersign the formation documents — no notary required. Business quotas (üzletrész) are transferred by written contract countersigned by a lawyer. A shareholders' agreement is recommended but not required.
Without a shareholders' agreement, the relationship between founders is governed by the country's default rules, which rarely account for the realities of a startup — where contributions change over time and early effort often goes uncompensated. An operating agreement or shareholders' agreement is essential. Use our equity calculator to determine a fair split based on actual contributions.
What happens when a partner leaves in Hungary
In a Kkt., a partner can withdraw with three months' notice. The departing partner is entitled to their share of the partnership's net assets. For Kft. companies, quota transfers require written form countersigned by a lawyer and must be registered. Existing quota holders have pre-emption rights unless the articles provide otherwise. Minority quota holders can petition for dissolution on grounds of serious injury to their rights.
A written agreement should address departure terms specifically, including how the buyout value is calculated, the payment timeline, vesting schedules, and any non-compete provisions. Understanding the concept of dead equity is important for managing these situations. Learn more about how dead equity affects businesses.
Marriage and business equity in Hungary
Hungary uses házassági vagyonközösség (marital community of property) by default. Assets acquired during marriage, including business interests, are community property. Each spouse manages their own professional assets but cannot dispose of community property without the other's consent. A marriage contract (házassági vagyonjogi szerződés) can establish separate property. The contract must be notarized and registered in the Central Marriage Contract Register to be effective against third parties.
Important for Hungary business owners: Hungary uses házassági vagyonközösség (marital community of property). Assets acquired during marriage are community property. Business owners should consider a pre-nuptial or post-nuptial agreement to protect their equity interests.
Formation and cost details
| Main startup entity | Korlátolt Felelősségű Társaság (Kft.) |
| Minimum capital | HUF 3,000,000 (~€7,500) |
| Formation cost | HUF 100,000–300,000 (~€250–€750) |
| Default equity split | Proportional to share capital contributions |
| Default partnership split | Proportional to capital contribution |
| Community property | Yes |
| Key legislation | Polgári Törvénykönyv (Ptk.) 2013, Act V of 2013 on the Civil Code |
Frequently asked questions
What is Hungary's corporate tax rate?
Hungary has a flat 9% corporate tax rate, the lowest in the EU. This applies to all companies regardless of size. A local business tax of up to 2% also applies, bringing the effective rate to approximately 11%.
What is the minimum capital for a Hungarian Kft.?
The minimum share capital for a Kft. is HUF 3,000,000 (approximately €7,500). Simplified formation using standardized articles costs about HUF 100,000 and can be completed in days. A lawyer must countersign formation documents.
How are partnership profits split in Hungary?
In a Kkt. (general partnership), profits are distributed proportionally to each partner's capital contribution by default (Ptk. §3:88(2)). Partners are jointly and severally liable for debts. A partnership agreement can set a different arrangement.
Does Hungarian community property affect business ownership?
Yes. Business interests acquired during marriage are community property by default. A spouse cannot dispose of community property without consent. A notarized marriage contract registered in the Central Marriage Contract Register can establish separate property.
Related resources
- Equity calculator: find a fair split for your business
- Does your small business need an equity agreement?
- Equity for small businesses: the complete guide
- Dead equity calculator: how much is yours costing you?
- Slicing Pie calculator
- What is an operating agreement?
- All 32 European countries: partnership and formation laws
- US state directory: partnership and LLC default rules
Partnership laws in neighboring countries
Disclaimer: This page provides general information about Hungary partnership and business formation laws and is not legal advice. Laws change, and the information here may not reflect the most recent amendments. The formation costs and capital requirements listed are approximate and may vary. Consult a qualified attorney licensed in Hungary for advice specific to your situation. Equity Matrix is a software tool for tracking contributions and calculating equity; it does not provide legal services.
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