Managing Director of a Hungarian Kft. as a Foreigner: Pay, Social Security and Liability in 2026
Yes, a foreigner can be the managing director (ügyvezető) of a Hungarian Kft. — there is no citizenship or residency requirement. What you do need is a Hungarian service-of-process agent if you have no Hungarian address, and a clear decision on how you are engaged: as an employee, under a mandate agreement, or as an owner who works in the company. That choice sets your 2026 tax and social security bill. If you own the Kft. and personally run it, Hungary charges contributions on at least the minimum wage — roughly HUF 101,700 a month — even if you pay yourself nothing, unless an exemption applies.
This guide is for founders who have just set up, or are about to set up, a Kft. and are deciding who runs it and how that person gets paid.
Who can be the managing director of a Kft.?
The managing director is the Kft.’s executive officer (vezető tisztségviselő). Any adult with full legal capacity can take the role unless disqualified — for example by a court ban or, in certain cases, by earlier involvement in a company that was struck off with unpaid debts. Nationality and residence do not matter.
Two practical requirements catch foreign directors:
- Service-of-process agent (kézbesítési megbízott). Under the Company Registration Act, if a person named in the registration application is a foreign natural person without a Hungarian address, the application must name an agent to receive official documents. The agent can be a Hungarian-registered organisation or an individual with a permanent Hungarian address — but not a member, officer or supervisory board member of the same company. A signed appointment and acceptance must be filed with the application.
- Signature specimen and identification. The director’s signature specimen is filed with the court of registration through the company’s lawyer, who also handles identification. If you are abroad, the lawyer’s instructions on apostilles and remote identification decide how long this takes.
A Kft. can have more than one managing director; the articles decide whether they sign alone or jointly.
What are the three ways a director can be paid?
The Civil Code (Ptk. 3:112. §) says the managing director runs the company under a mandate agreement or an employment relationship, as agreed with the company. For owner-directors a third status sits on top of that: the member with personal involvement (társas vállalkozó).
| Status | Typical for | Contributions in Hungary (2026) |
|---|---|---|
| Employment contract (munkaviszony) | a hired, non-owner director | 15% personal income tax + 18.5% social security contribution from the salary; 13% social contribution tax on top, paid by the Kft. |
| Mandate agreement, director is not a member | a trusted manager or nominee director | insured (and contributions due) only if the monthly fee reaches 30% of the minimum wage (HUF 96,840 in 2026) |
| Member who personally runs the company (társas vállalkozó) | the founder-owner | contributions on the actual pay, but at least the minimum wage every month — even if the pay is zero |
The figures come straight from the statutes: the social security contribution is 18.5% (Tbj. 25. §), the social contribution tax is 13% (Szocho tv. 2. §), and personal income tax is a flat 15%.
How much does an owner-director pay if they take no salary?
This is the question most founders ask, and the answer surprises many. Under Tbj. 39. § an insured owner-director pays the 18.5% social security contribution on their actual pay, but on at least the minimum wage per month. The Kft. owes 13% social contribution tax on the same minimum base (Szocho tv. 8. §).
The minimum base depends on the company’s main activity:
| Main activity of the Kft. | Monthly minimum base 2026 | 18.5% contribution (director) | 13% social contribution tax (Kft.) | Total per month |
|---|---|---|---|---|
| does not require secondary qualification | HUF 322,800 (minimum wage) | HUF 59,718 | HUF 41,964 | HUF 101,682 |
| requires at least secondary qualification (most IT, consulting, trading) | HUF 373,200 (guaranteed minimum wage) | HUF 69,042 | HUF 48,516 | HUF 117,558 |
Over a full year that is roughly HUF 1.22–1.41 million of fixed cost, whether or not the company makes money. The contribution is not wasted — it builds Hungarian pension and health insurance entitlement — but it has to be in the budget from month one.
When does the minimum not apply?
Three situations change the picture, and all three are common for foreign founders.
1. You work full-time for another employer. Under Tbj. 42. §, if the owner-director also has an employment relationship of at least 36 hours a week, contributions are due only on the pay actually received from the Kft. — no minimum. The law counts employment governed by foreign law performed in another EU/EEA state as employment too.
2. You are covered by another EU country’s social security. EU coordination rules (Regulation 883/2004) mean a person is insured in only one member state at a time. If you live and mainly work in, say, Germany and hold an A1 certificate confirming German coverage, Hungarian contributions on your director role generally do not apply. The A1 is issued by your home institution, not by the Hungarian tax authority — apply before the Kft. starts paying you.
3. You are not a member. A non-owner director on a mandate agreement is insured only if the monthly fee reaches 30% of the minimum wage. An unpaid nominee director therefore has no Hungarian contributions — though an unpaid role raises its own questions about substance and liability.
Outside the EU the answer depends on whether Hungary has a social security agreement with your country (it has them with, among others, the USA, Canada and India). Check the agreement before assuming anything.
How is the director’s pay taxed if you live abroad?
Pay for work performed in Hungary is taxable in Hungary. For fees paid by a Hungarian company to a board-level officer, most tax treaties follow the OECD model’s directors’-fees article, which lets the company’s country tax them. In practice this means Hungary withholds 15% personal income tax, and you claim relief in your country of residence under its treaty rules. Which article applies — directors’ fees or employment income — depends on the treaty and your role, so have it confirmed once, in writing, before the first payment.
Many owner-directors combine a modest salary with dividends, which are taxed at 15% plus a 13% social contribution tax up to an annual cap. We compare the options for non-residents in taking profit out of a Hungarian company; the full employer-side cost of a salary is in employer costs in Hungary.
What are you personally liable for?
A Kft. limits the owners’ liability, but the managing director carries three distinct exposures under the Civil Code:
- Towards the company (Ptk. 3:24. §). The director is liable for damage caused to the Kft. in the course of management under the rules of breach of contract. The company — or its members after it ceases — can claim it.
- Towards third parties. Damage the director causes to outsiders while acting in that role is primarily the company’s liability; the director is jointly liable only if the damage was caused intentionally.
- Towards creditors on insolvency (Ptk. 3:118. §). If the Kft. is dissolved without a successor, creditors can claim unpaid amounts from the director if, after insolvency became a threat, the director failed to take creditors’ interests into account. This rule does not apply to a voluntary liquidation (végelszámolás) that ends normally.
The practical lesson for a director who lives abroad: you cannot delegate knowledge. The monthly tax balance, the filing calendar and the cash position are your responsibility even if an accountant files the returns. Ask for a short monthly status report and keep it.
A quick checklist before you sign the registration papers
- Decide the status: employment, mandate, or owner with personal involvement.
- Check whether the Kft.’s main activity triggers the guaranteed-minimum-wage base.
- If you are insured elsewhere in the EU, request the A1 certificate from your home institution now.
- Name a Hungarian service-of-process agent and a registered office — see registered office in Hungary.
- Budget at least HUF 1.2–1.4 million a year for the minimum contributions if none of the exemptions apply.
- Agree how and when you will receive a monthly tax-balance report from your accountant.
Frequently asked questions
Can the Kft. have only a foreign director? Yes. There is no requirement for a Hungarian or resident director; you only need the service-of-process agent.
Can I be director of two Hungarian companies? Yes. If you are insured as an owner-director in several Kfts., Tbj. 42. § lets you choose, once a year by 31 January, which company pays the contributions on the minimum base; the others pay on actual pay only.
Do I need a residence permit to be a director? Not to hold the office. A residence or work permit becomes relevant if you, as a non-EU national, move to Hungary to work in the company.
Is an unpaid director allowed? Yes, under a mandate agreement a non-owner can serve without pay. An owner who personally runs the company, however, still owes contributions on the minimum base unless an exemption applies.
Who files the director’s contributions? The Kft. does, in its monthly payroll return to the tax authority, due by the 12th of the following month.
Updated: 2026-09-23 · Tax year 2026. Based on the Civil Code, the Company Registration Act, the Tbj. and the Szocho Act as in force in September 2026, and the 2026 minimum wage (HUF 322,800) and guaranteed minimum wage (HUF 373,200). Cross-border social security and treaty questions depend on your individual situation — confirm them with an adviser before the first payment.
Setting up a Kft. and want the director’s status right from day one? Our company formation service covers the registration, the service-of-process agent and the first payroll set-up — start here.