Open a Representative Office in Hungary

Setting up a liaison or representative office in Hungary is one way for foreign companies to test the market here before expanding their operations. Our Hungarian lawyers are at your service should you be interested in establishing such an office.

Who can set up a liaison office in Hungary?

The representative office can be established by foreign companies only, no matter if they are registered in the EU or non-EU countries.

Are there any special requirements for foreign companies opening liaison offices in Hungary?

Apart from being legally registered in its state of origin, the parent business is not subject to any specific criteria when setting up such an enterprise here.

What are the features of a Hungarian representative office?

It:

• is not a corporate business form, meaning it has no legal status;
• does not incur debts, as the parent company is liable for its operations and finances;
• cannot engage in commercial activities;
• does not generate income in Hungary;
• must always wait for the approval of the foreign business when completing its activities.

Where do I register a liaison office in Hungary?

The registration is the same as for any other company in Hungary: with the Court of Registration (cégbíróság).

What are the documents a foreign company must file to open a representative office in Hungary?

The following:

• a resolution through which the foreign company approves the establishment of the office;
• the parent company’s Articles of Association;
• the parent company’s Certificate of Incorporation issued by the Companies Register in its home country;
• the document through which a local representative is appointed.

NOTE: Foreign-issued documents must be translated into Hungarian and certified before submission. Our Hungarian lawyers can assist in this endeavour.

Here is also an infographic on this subject:

Must the local agent be a Hungarian resident?

The local agent can be a Hungarian citizen or a foreign employee transferred from the parent company’s home country, as long as the Hungarian immigration procedures are respected.

How long does it take to register a liaison office in Hungary?

Approximately one week.

What are the activities a Hungarian representative office can undertake?

If you want to open a representative office in Hungary, you must know that:

• this office can only promote the business of the parent company;
• it can act as a contact point between the foreign business and local clients or associates;
• it is also allowed to conduct market research;
• it can mediate contracts between its foreign principal company and Hungarian business entities and private individuals;
• it can prepare contracts that have been entered into by its foreign principal and Hungarian companies;
• it can offer information drives and promotional activities of goods, services, and rights sold or provided by its foreign principal;
• it can represent its foreign principal company during exhibits, fairs, professional lectures, and other identical events held in Hungary.

Can I hire employees in a representative office in Hungary?

Yes, even if its activities are not extensive, a representative office can have a few employees. For this reason, one of the main aspects when using this business form is registration for social security purposes, just like any other Hungarian employer.

Are representative offices subject to taxation in Hungary?

No, considering they do not generate income in Hungary. However, the parent company may be required to submit financial statements.

We also have a video on this topic:

What happens if I close the Hungarian liaison office?

You can open a branch office or a subsidiary if you want to continue doing business in Hungary.

There can be a lot of legal implications when you set up a liaison office in Hungary. Contact our law firm in Hungary to obtain their legal services in this matter. They will provide you with legal assistance throughout the process.