Obtaining a Financial License in Hungary

Setting up a financial company in Hungary comes with specific licensing requirements. The business permit to obtain is related to the activities to be undertaken by the enterprise.

Below, our local lawyers explain how to obtain what is generally called a financial license in Hungary. We will also provide information about specific business permits where required.

Types of financial licenses in Hungary

If you want to open a financial company in Hungary, you must apply for the appropriate business license in accordance with the activities it will undertake. Here are the main types of Hungarian financial licenses you can apply for:

• business permits for banking activities;
• licenses for investment services;
• payment service-related authorizations;
• insurance and reinsurance licenses;
• securities trading-related permits.

Please note that each type of financial license can cover various activities, and our lawyers in Hungary can offer more information about the laws governing them.

Before arriving at the licensing phase, it is important to note that there are also special rules that provide for the registration of financial institutions.

Activities completed by financial companies in Hungary

Here are the main activities completed under a financial license in Hungary:

• creating and administering deposits on behalf of citizens and holders of residence permits in Hungary;
• bank account opening;
• issuing credits and loans to natural persons and companies;
• financial leasing operations;
• money exchange and transmission;
• electronic money issuance (and crypto-asset services under the EU Markets in Crypto-Assets Regulation, MiCA);
• offering investment advice;
• custody services;
• consultancy solutions;
• Forex investment services;
• asset management;
• payment system operations;
• insurance and reinsurance activities.

Our law firm in Hungary can assist with the application for the correct financial license in accordance with the type of activities to perform.

Documents required to obtain Hungarian financial authorizations

In most cases, obtaining a financial license implies preparing similar documents. These are:

• a business plan;
• the Articles of Association of the company (our Hungarian lawyers can handle the business registration procedure);
• details about the key officers in the company (director, managers, chief accountant);
• income certificate and source of the funds;
• details of the shareholders.

With respect to the type of entities that can be used to set up a financial company in Hungary, you can choose between the private and public limited liability companies. When deciding on a joint stock enterprise the document providing for the issuance of shares must also be presented. The authority issuing financial licenses in this country is the Hungarian Central Bank.

Share capital requirements for different types of licenses in Hungary

One of the most important aspects to consider when starting a financial business in Hungary is its share capital requirements. Several sectoral laws (the Banking Act, the Investment Services Act, the Insurance Act and the Payment Services Act) provide for the amounts required to obtain a financial license, and it establishes the following:

• EUR 750,000 for an investment firm dealing on own account, as Forex/CFD brokers usually do (EUR 75,000-150,000 for firms that do not);
• EUR 280,000 for limited insurance and reinsurance licenses;
• EUR 140,000 for co-operative insurance and reinsurance businesses;
• EUR 1.3 million (minimum capital requirement floor) for captive reinsurance licenses;
• EUR 4 million (minimum capital requirement floor) for life insurance activities;
• EUR 125,000 for most payment institutions (EUR 350,000 for electronic money institutions).

If you want to open a company and apply for a financial license in Hungary, you can rely on the expertise of our lawyers. Contact us for more information.