The Hungarian business environment is recommended for those who want to open an IT company in Hungary, as this market is one of the most representative in Central Europe. Foreign investors should also know that Hungary is a member state of the European Union (EU) and, as such, the legislation applicable to companies here follows EU’s directives.
An IT company in Hungary is incorporated following specific steps, which are compulsory for all types of businesses registered here. However, it is important to know that this type of business may need to obtain special permits and licenses issued for the IT field; our team of Hungarian company incorporation representatives can provide assistance on this matter.
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The main steps for opening a company in Hungary
It is crucial to choose a legal entity which will best represent the interests of the investors. There are several legal entities which are available for foreign investors and it is important to know that the local legislation prescribes only few restrictions to foreigners performing business activities on the Hungarian market. Investors can choose from the following:
- private limited liability company;
- general partnership;
- limited partnership;
- joint stock company.
After the investor decides what legal entity is better suited for his or her activities, it is necessary to draft the statutory documents of the future company.
After this procedure is completed, the next step is to open a corporate bank account, in which the minimum share capital will be deposited, in accordance with the provisions stipulated in the statutory documents. Our team of Hungarian company formation consultants can provide more details on the provisions of the documents.
Please mind that based on the legal entity that you will select for your Hungarian business, the accounting procedures may vary. This can happen because the law regulates different accounting obligations in accordance with the company type, the size of the company or its annual income.
Our accountants in Hungary can explain what the main rules in this sense are and what will the obligations of your company will be, once you will start the business activity.
Legislative update concerning IT operators in Hungary
Businessmen who will open a Hungarian company need to abide by various rules of law, regulating the incorporation and functioning of a legal entity, its taxation and reporting, etc. Besides these, investors must be aware of industry specific regulations. Amongst many sectoral laws, IT businesses are required to implement the rules of the Cybersecurity Act, entered into force starting with 1st of January 2025.
The new law replaces 2 previous Acts and transposes the EU laws into the national law. Under the new rule, it is established that a foreign entity which operates an electronic information system, and which is not registered in Hungary, is required to appoint a local representative. The latter has the obligation to implement the rules of the Cybersecurity Act.
We mention that the new law applies to both private and public entities and that it regulates matters such as:
- the basic rules for cybersecurity;
- the regulations for certification in the industry;
- the procedures for cybersecurity incidents;
- the categories of entities which make the object of the law.
Under the new law, these entities must categorize their electronic information systems under one of the following 3 categories:
- basic;
- significant;
- high.
These 3 refer to the risks associated with the respective systems, as well as to the confidentiality and integrity measures they provide for the data processed. These systems have to be evaluated on a regular basis (every 2 years). Our specialists in company registration in Hungary can further advise on other obligations that are imposed under the new law.
Competent authorities
The process of company formation in Hungary in the IT industry may fall under the supervision of any of the following (the institution can vary based on the rules of law applicable to a specific IT branch):
- the National Security Service;
- the Hungarian National Bank;
- the Authority for Regulated Activities.
The IT industry in Hungary
When investing in Hungary, investors should know that the local economy is a part of the EU’s Digital Single Market, a project which aims at the development of the local economy through the use of digital services and products.
The local market is focused on IT services and products, as more than 95% of the Hungarian households benefit from fixed broadband services. Businessmen who want to open a company in Hungary in the IT industry are invited to discover the following data on the Hungarian IT sector:
- the Hungarian IT market is expected to grow to $2.14 billion in revenues in 2025;
- the most important segment is IT outsourcing, which will reach $797.47 million in 2025;
- by 2029, it is estimated that this market will expand to $2.81 billion;
- this sector is comprised of 4 main branches, namely IT outsourcing, IT consulting, business process outsourcing and other IT services.
Investors interested in receiving more details on the processes involved when opening an IT company in Hungary can address to our team of Hungarian company incorporation agents for assistance.