As a general rule, companies registered in Hungary are allowed to acquire commercial real estate assets in Hungary, irrespectively of the nationality of their owners ie even if the owners of such companies are foreigners, as well as EU citizens.
However, there are certain restrictions and prohibitions on the acquisition of arable land, such as agricultural land or forests. In general, ownership of arable land may only be acquired by domestic natural persons and EU nationals who qualify as farmers. In addition to the above, the acquisition of arable land is also subject to strict rules and regulations. With a few rare exceptions, legal entities and non-EU citizens are prohibited from acquiring arable land.1
In addition, non-EEA citizens or legal entities may acquire real estate only with the consent of the relevant administrative office.2
1Act CXXII of 2013, 9.§ (1), 10.§ (1)
2Gov. Decree 251/2014 on the acquisitions by foreigners of real estate other than agricultural and and forestry land
Last modified 13 Mar 2025
A direct investment in a real estate can be made in Hungary either as:
Any direct investment by a foreign entity may create a permanent establishment in Hungary.
A branch office is part of a non-resident entity’s organization that has economic independence, but no separate legal personality, and may carry on business activities in Hungary, sign agreements and undertake obligations. A commercial representative office is also part of the organization of a foreign company, however it is not permitted to carry on business activities and may only be engaged in preparing and concluding contracts and providing information to clients on behalf of the foreign company. Both branch offices and commercial representative offices are registered by the Court of Registration in the commercial register. In the absence of an international treaty or mutual reciprocal arrangements between the relevant countries (eg the bilateral agreement between Hungary and Switzerland), permission is required for a foreign company to acquire ownership of real estate through a Hungarian branch office or a Hungarian commercial representative office. If a branch office or commercial representative office is dissolved, the foreign company must dispose of its real estate within one year unless the original acquisition did not require authorization from the relevant administrative office or a specific exemption was granted when the branch office or commercial representative office was registered.1
The set-up costs of a branch office or commercial representative office are:2
The time available for the Court of Registration to decide on registration is usually 15 working days. An application for registration may only be submitted to the Court of Registration electronically through a lawyer.3
The representative of a branch office and the representative of a commercial representative office must be employed, under contract or have a long-term service agreement, and must be resident in Hungary.4
1Act XCIII. of 1990 on duties and fees, 45.§ (1) f-g; and Decree of Minister of Justice 22/2006 on publication and fees of publication in the Gazette, 5.§ (1)
2Act V. of 2006 on Public Company Information, Company Registration and Winding-up Proceedings., 46.§ (7)
3Act V. of 2006 n on Public Company Information, Company Registration and Winding-up Proceedings., 46.§ (7)
4AAct CXXXII of 1997., 6.§ (2), 26.§ (3)
Last modified 13 Mar 2025
Five types of corporate vehicle can be used for real estate investments in Hungary:
Last modified 13 Mar 2025
A limited liability company is the most common vehicle used for business activities in Hungary and has a distinct legal personality. It has unlimited liability to its creditors to the full extent of its assets, but the members of the company, as a rule, are not liable for the company’s obligations.
A company limited by shares is a business entity with a distinct legal personality and the shareholders, as a rule, are not liable for the company’s obligations. A company limited by shares may either operate as a private (zrt) or public (nyrt) company.
Subject to certain requirements (eg stock market presence, minor shareholder requirements, scope of activities restrictions, dividend distribution requirements, restrictions on executive officers or asset portfolio restrictions) any public company limited by shares (nyrt) may qualify as a regulated real estate investment company, ie a REIT (a real estate investment trust) if it has an initial capital (including subscribed capital, capital reserve and profit reserve) of at least HUF 5 billion and has been registered as REIT by the tax authorities.1
A limited partnership requires at least one member (the ‘general partner’) to have unlimited liability in relation to the obligations of the company that are not covered by its assets. At least one other member (a ‘limited member’) is only liable up to the extent of the equity contribution that member makes as specified in the articles of association.
An unlimited partnership’s members have unlimited liability for obligations that are not covered by the partnership’s assets.
A real estate investment fund consists of assets and liabilities only, and is managed and represented by an investment fund manager.2
1Act CII of 2011 on Regulated Real Estate Investment Companies, 3.§
2Act CII of 2011, 3.§
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HUF3,000,000 (with a minimum of HUF100,000 per member)1
There is no minimum capital requirement.3
There is no minimum capital requirement.4
Normally EUR300,000 but can be higher in some cases.5 If the investment fund manager operates as a branch office, the minimum capital is the endowment capital (ie the capital provided to the branch, free of restrictions and encumbrances, in order to allow it to operate). The endowment capital requirement does not apply to the branch office of an investment fund manager established in another EU member state.
In order to maintain the continuity in its operations and to protect investors, investment fund managers shall have sufficient own funds to cover any and all risks associated with their activities, which may not be less than EUR300,000 or the sum equivalent to at least 25% of fixed overheads of the preceding year.6
1Civil Code (Act V of 2013) 3:161.§ (1)
2Civil Code 3:212.§ (2); Act CII of 2011 3.§
3Civil Code 3:154.§
4Civil Code 3:138.§
5Act XVI of 2014 on Collective Investment Trusts and Their Managers, and on the Amendment of Financial Regulations 16.§
6Act XVI of 2014. 16.§ (3)
7Act XVI of 2014, 68.§ (1) b
8Act XVI of 2014, 68.§ (2) b
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Private company limited by shares:
Public company limited by shares (only to be transformed from a previously set up private company limited by shares):
A simplified registration procedure may apply (although this is not available for public companies limited by shares, branch or commercial representative offices), in which case the stamp duty is HUF50,000 for a private company limited by shares, for other companies no stamp duty is payable.9
1Act XCIII of 1990, 45.§ (1a)
2Decree of the Minister of Justice 22/2006, 5.§ (3)
3 Act XCIII of 1990, 45.§ (1) b
4Decree of the Minister of Justice 22/2006, 5.§ (1)
5Act XCIII of 1990, 45.§ (4a)
6Decree of the Minister of Justice 22/2006, 5.§ (1)
7Act XCIII of 1990, 45.§ (1a)
8Decree of the Minister of Justice 22/2006, 5.§ (3)
9Act XCIII of 1990, 45.§ (3)
Last modified 13 Mar 2025
The time available for the Court of Registration to decide on registration is usually 15 working days. However, if the application is submitted in the standard form for articles of association, a simplified registration procedure applies and the Court of Registration must decide on registration within one business day.1
An application for registration may only be submitted to the Court of Registration electronically through a lawyer.
In the case of a real estate investment fund, the investment fund manager (either a company limited by shares or a Hungarian branch office) must be registered as described below.
The time available for the Court of Registration to decide on registration is usually 15 working days. However, if the application is submitted in the standard form for articles of association (not applicable in the case of public companies limited by shares and branch offices), a simplified registration procedure applies and the Court of Registration must decide on registration within one business day upon notification on the tax number by the tax authority.2
An application for registration may only be submitted to the Court of Registration electronically through a lawyer.
Registration of the investment fund itself takes three months unless additional documents need to be submitted.3
1Act V of 2006, 46.§ (7), 48.§ (4)
2Act V of 2006, 46.§ (7), 48.§ (1)-(4)
3Act CXXXIX of 2013 on the National Bank of Hungary, 49.§ (4)
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The main governing body of the company is the members’ meeting.1
One or more managing directors represent the company with sole or joint authority to sign on its behalf. The managing directors are appointed by the members’ general meeting. A member may also act as managing director.2 With some exceptions, a supervisory board is not mandatory but may be elected.
The main governing body of the company is the shareholders’ general meeting. The company is managed by a board of directors comprising a minimum of three directors. Board members are appointed by the shareholders’ general meeting and may have either sole or joint authority to sign on the company’s behalf. The articles of association may allow for the appointment of a sole general manager instead of a board of directors. It is possible to create different categories of shares with different rights, and voting and profit rights can be freely allocated. Private companies limited by shares do not need to have a supervisory board unless shareholders holding 5% of the voting rights request it.
The main governing body of the company is the shareholders’ general meeting. The company can operate either a one- or two-tier system. An audit committee with a minimum of three members is also mandatory and is appointed by the shareholders’ general meeting from the independent members of the board of directors or the supervisory board. Its duties include assisting the board of directors and the supervisory board in relation to financial reporting. At least one member of the audit committee shall have competence in accounting or auditing.3
Furthermore, the management board of a public limited company must have a governance and management report prepared yearly according to the rules applicable to the actors of the given stock exchange and present such report to the annual shareholders' general meeting for approval. The general meeting’s resolution and the approved report shall be posted on the website of the limited company.4
All companies limited by shares shall employ an auditor, however, the Civil Code allows alteration from that principle in case of private company limited by shares if the articles of association of the company so stipulates.5
The company is managed by a single body acting as a board of directors and a supervisory board. It comprises a minimum of five directors, the majority of the single body shall be independent. Board members and the chairperson of the board of directors are appointed by the shareholders’ general meeting, if the chairperson is not appointed by the general meeting, they shall be elected by the board itself. A sole general manager cannot be appointed for a public company.6
The company is managed by a board of directors comprising a minimum of three directors. A supervisory board comprising a minimum of three people is mandatory and is appointed by the shareholders’ general meeting.
In the case of a REIT (a regulated real estate investment company) members of the board of directors and the supervisory board must have a college/university degree, three years of management experience and no criminal record.7
The partners are given considerable scope to agree on corporate governance in the articles of association. Unless the articles state otherwise, a limited liability partner is not entitled to be involved in the management of the partnership, or to represent the company. There are no restrictions on how voting and profit rights are allocated with the exception that the partners may not be validly deprived of their voting rights. The unlimited liability partner is entitled to represent the company. Limited partners can take part in and vote at the members’ meeting.8
The investment fund itself is not a legally recognized organization but consists only of assets and liabilities. It is managed and represented by the investment fund manager.
1Civil Code 3:188.§ (1)
2Civil Code 3:188.§ (1)-(2)
3Civil Code 3:291.§
4Civil Code 3:284.§ (1)
5Civil Code 3:268.§-292.§
6Civil Code 3:285.§-286.§
7Act CII.of 2011 6 § (1)
8Civil Code 3:138-158.§
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This depends on the circumstances. Any corporate changes submitted to the Court of Registration are subject to stamp duty (usually HUF15,000 but HUF40,000 in the case of capital increase/decrease of a private company limited by shares or HUF50,000 in the case of transformation of companies) and a publication fee (HUF3,000). Legal fees and additional costs, such as notarial fees, translation costs etc, may also be incurred.1
The accounting costs are subject to agreement between the entity and its accountancy firm. An auditor may also be required.
1Act XCIII of 1990, 45.§ (3b); (4); (5)
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All four of these entities are subject to corporate income tax at the general rate of 9 %.1 In addition, a local business tax of up to 2% also applies, so that the specific tax rate is determined by each local municipality.
Dividends paid to shareholders who are not private individuals are not subject to withholding tax.
Dividends paid to non-resident private individuals are taxed at the rate applicable under the relevant double taxation treaty. If no double taxation treaty applies, withholding tax is payable at the rate of 15%.
Dividends distributed to Hungarian business associations (companies) are exempt from tax at source and in the hands of the shareholders.
Hungarian real estate investment funds are not subject to direct taxation in Hungary.
REITs and their wholly owned special purpose vehicles are, as a rule, exempt from corporate income tax and local business tax.2
1Act LXXXI. of 1996, 19.§
2Act C of 1990 on local taxes, 39/E § (1)
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Are foreigners allowed to invest by directly purchasing a commercial real estate asset?
As a general rule, companies registered in Hungary are allowed to acquire commercial real estate assets in Hungary, irrespectively of the nationality of their owners ie even if the owners of such companies are foreigners, as well as EU citizens.
However, there are certain restrictions and prohibitions on the acquisition of arable land, such as agricultural land or forests. In general, ownership of arable land may only be acquired by domestic natural persons and EU nationals who qualify as farmers. In addition to the above, the acquisition of arable land is also subject to strict rules and regulations. With a few rare exceptions, legal entities and non-EU citizens are prohibited from acquiring arable land.1
In addition, non-EEA citizens or legal entities may acquire real estate only with the consent of the relevant administrative office.2
1Act CXXII of 2013, 9.§ (1), 10.§ (1)
2Gov. Decree 251/2014 on the acquisitions by foreigners of real estate other than agricultural and and forestry land
Last modified 13 Mar 2025