For German founders · 100% remote
Open a Hungarian company from Germany — 9% corporate tax
German entrepreneurs and Mittelstand owners use a Hungarian Kft as a low-tax EU base. Corporate tax is a flat 9% — the lowest in the EU, versus a combined German corporate burden of roughly 30% (Körperschaftsteuer + Solidaritätszuschlag + Gewerbesteuer). Set it up from your desk in Germany.
- 9% Hungarian corporate tax vs ~30% in Germany
- Same EU single market — no customs between DE and HU
- Sign remotely by power of attorney — no trip to Hungary
- We coordinate the mandatory Hungarian lawyer · support in German
What's included
- Done-for-you Kft incorporation, fully remote (PoA)
- Coordination of the mandatory Hungarian lawyer
- Registered seat (székhely) address in Hungary
- EU VAT registration for DE↔HU trade
- Bank account introduction
- Monthly accounting in English
● The German angle
Why German entrepreneurs choose a Hungarian Kft
9% vs ~30%
Hungary's flat 9% corporate tax (TAO) is the lowest in the EU. The combined German corporate burden — Körperschaftsteuer, Solidaritätszuschlag and municipal Gewerbesteuer — typically lands near 30%.
One single market
Germany and Hungary are both in the EU. Goods move without customs, and intra-Community B2B trade runs on EU VAT rules — your Hungarian Kft is a true EU company, not an offshore.
Treaty-backed
A German–Hungarian double-taxation treaty allocates taxing rights and helps avoid double taxation. We coordinate with your German adviser so your structure is clean.
How it works from Germany
From your desk in Germany to a registered Hungarian Kft
There is no DIY or notary-only route in Hungary: the law requires a lawyer (ügyvéd) to countersign and electronically file the incorporation. We coordinate that lawyer for you, and you never need to leave Germany.
1. Consultation (in German if you prefer)
We agree on company name, activity, managing director and capital, and confirm the Kft is right for you.
2. Sign by power of attorney
We prepare the articles; a Hungarian lawyer countersigns. You sign remotely by PoA — no travel.
3. Filing & registration
The lawyer files electronically with the company court. Registration typically takes 1–5 business days, then bank and accounting follow.
The DE–HU double-tax treaty
How the Germany–Hungary tax treaty actually applies
Germany and Hungary have had a modern double-taxation treaty since 2011 (in force 1 January 2012), built on the OECD Model. It matters less for withholding than most founders expect — because Hungary already charges no withholding tax on dividends, interest or royalties paid to a foreign company under its own domestic law. The treaty caps set the ceiling and govern the German side:
| Payment out of Hungary | Treaty cap (DE↔HU) | Hungarian domestic rate |
|---|---|---|
| Dividends | 5% (company ≥10%) · 15% other | 0% to a company · 15% to an individual |
| Interest | 0% | 0% to a company · 15% to an individual |
| Royalties | 0% | 0% to a company · 15% to an individual |
So a German holding company can receive dividends from its Hungarian Kft with 0% Hungarian withholding; the treaty's 15% portfolio cap only bites if a German individual takes the dividend personally, and Germany then relieves double taxation by credit. If both states were to claim the company as resident, the treaty's tie-breaker (Article 4) decides it by place of effective management — which is exactly where the real German risk sits.
The German-resident reality
Place of management and German CFC rules — the two things that catch Germans
Place of effective management. A Hungarian Kft that is really run from a desk in Germany is exposed on both sides. Germany can treat it as having its Geschäftsleitung (place of management) in Germany and tax it as German-resident; equally, a German director who flies to Budapest and makes the real decisions there can create a Hungarian permanent establishment. In one documented case the Hungarian authority found a German company had created a Hungarian PE precisely because its directors organised transport and handled orders while physically in Hungary. The lesson is not to avoid travel — it is that management substance has to live somewhere on purpose, and be documented.
German CFC — Hinzurechnungsbesteuerung (AStG). Germany's Außensteuergesetz attributes the passive income of a low-taxed foreign company back to its German shareholders. Hungary's 9% corporate rate sits below the German low-tax threshold, so a Hungarian Kft that mainly earns passive income (licensing, intra-group interest, a passive holding) can trigger current German taxation of that income regardless of whether a dividend is paid. Genuine active trade — real customers, staff or operations in Hungary — is generally outside the passive-income CFC net. This is exactly the line we help German founders stay on the right side of; see the full 9% tax breakdown.
- Fix the place of management deliberately — board minutes, local decisions, a real seat
- Prefer active trade over pure passive income to stay outside AStG attribution
- Coordinate with a German adviser on Wegzug/exit and place-of-management points
A German use case
A Mittelstand e-commerce seller with real Hungarian operations
A German-owned online retailer moves its EU fulfilment — a warehouse and two staff — to Hungary and routes EU B2C/B2B sales through a Hungarian Kft. The activity is genuine, so the profit is Hungarian.
On €500,000 of Hungarian trading profit, corporate tax at 9% is about €45,000, plus local business tax (HIPA) up to 2%. The same profit inside a German GmbH would face a combined burden near 30% — roughly €150,000. The saving is real only because the warehouse, staff and decisions are actually in Hungary; strip out the substance and both the German place-of-management rule and AStG pull it back. When the owner finally draws a dividend personally, German tax applies with a credit for Hungarian tax — Hungary defers and lowers the corporate layer, it does not erase the German personal tax.
Banking: a German-owned Kft can usually open a Hungarian business account or an EU EMI/fintech account remotely after KYC; German directors are routine for Hungarian banks. We prepare the onboarding pack. Thinking bigger? A German group sometimes puts a Hungarian holding company above its subsidiaries — we model both. Ready to start? See how we form the company.
Opening a Hungarian company from Germany — FAQ
How does VAT work between Germany and Hungary?
Both countries are in the EU VAT system. A Hungarian company gets an EU VAT number (and can request an EU VAT ID for intra-Community trade), so B2B sales of goods/services between your Hungarian Kft and German businesses are typically handled as intra-Community supplies with the reverse-charge mechanism — no German import VAT at the border. Hungary's domestic VAT (ÁFA) standard rate is 27%. The correct treatment depends on what you sell and to whom, so we set up your VAT registration and reporting correctly from day one.
Can I set up the Hungarian company from Germany without travelling?
Yes. You do not need to come to Hungary. You sign the incorporation documents remotely by power of attorney (PoA); a Hungarian lawyer (ügyvéd) countersigns and files electronically with the company court. We can run the whole process while you stay in Germany, and we support you in German where needed.
Does the German–Hungarian double-tax treaty affect me?
Germany and Hungary have a double-taxation treaty that allocates taxing rights and helps avoid the same profit being taxed twice. How it applies depends on your residence, where the company is managed, and your personal situation — this is general information, not tax advice, and German tax residents should confirm their position with a German adviser (e.g. on CFC/Hinzurechnungsbesteuerung rules and place of effective management).
What is the minimum share capital for a Hungarian Kft?
The minimum share capital for a Kft is 3 000 000 Ft (approx. €7,595). It does not have to be paid in full up front and can be contributed over time or in kind, under the articles of association.
What are the Germany–Hungary treaty withholding rates on dividends, interest and royalties?
Under the 2011 Germany–Hungary double-tax treaty (in force since 2012), dividends are capped at 5% where the beneficial owner is a company holding at least 10% of the payer and 15% otherwise; interest and royalties are 0% at source. In practice Hungary already levies no withholding tax on dividends, interest or royalties paid to a foreign company under its domestic law, so the treaty caps mainly matter when a German individual draws a dividend (15%, credited in Germany) or for the German-side treatment. The bigger cross-border issue for Germans is place of management and CFC (AStG). Source: 2011 DE–HU treaty, Arts 10–12; PwC Hungary — withholding taxes.
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