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Executive Summary
The Republic of Hungary is located in Central Europe and is a landlocked country, bordered by Slovenia, Austria, Slovakia, Ukraine, Romania, Serbia and Croatia. It covers a total area of 93,030 sq km. It is a member state of a number of international organizations, such as the EU, NATO, OECD and others. Budapest is the capital of Hungary, Hungarian is its official language.

The president of the country is the head of the state and has a ceremonial role and is elected by the parliament for a 5 years term. The Prime Minister is the head of the government. The parliament is elected according to the mixed system of electorates.

In 1990 Hungary has started its economy’s transformation from a centrally planned to a free market economy.  More than ¾ of the GDP is generated by the private sector. The rule of law is strong, the level of corruption is low. It has been one of the most rapidly developing countries of the central Europe during the last decade.

The Hungarian Forint (HUF) is the national currency of the country.

Geography
The territory of Hungary is mainly flat, but there are hilly and mountainous areas as well. The highest mountains lie in the North of the country along the border with Slovakia; the Kekes is the highest point of Hungary, which reaches 1,014 metres of height above the sea level. The country has a number of small and big rivers and lakes on its territory.

The second largest thermal lake in the world, Lake Balaton, and the largest natural grassland in Europe, Hortobagy, are situated in Hungary. The country is classified to have one of the most beautiful urban landscapes of the world, which attracts numerous international tourists.

Climate of Hungary is classified as a continental climate, to which snowy winters and mild summers are characteristic. Rainfalls are frequent through the year.

Map, Flag and Coat of Arm


Types of Company

General Partnership

A partnership is not a separate legal entity. It is a structure within which two or more partners cooperate together under a common name. All of them have unlimited liability to the partnership’s debts and obligations.

Limited Partnership
At least one general partner with unlimited liability and one limited partner with limited liability up to the capital invested into the structure form a limited partnership. It is not allowed for any partner to become a general partner of another partnership in addition to its actual role.

Limited Company
Shareholders of this type of company have limited liability, and this company may not offer its shares to the general public. There are minimum capital requirements.

Joint Stock Company
This type of company may be whether private or public, which is traded on a stock exchange. At least three directors must be present in the board of directors, but must not exceed eleven. A single shareholder is allowed. There are minimum capital requirements. Banks, insurance companies and investment corporations must be incorporated as this type of company.

Taxation
Tax year of Hungary coincides with a calendar year, which starts of 1st January and ends on 31st December.

Personal
Residents of Hungary are taxed on their world-wide income and are individuals who spend in Hungary at least 183 days in a tax year. Non-residents are liable to taxation in Hungary only on income generated within the country.

Income tax has a progressive nature and is levied at varying rates from 18% to 36%, depending on the total annual income of an individual. A solidarity tax at a rate of 4% is payable by individuals in case their annual income exceeds a certain amount. Social security contributions are payable by employers and employees.

Capital gains are taxed at different rates depending on the nature of gains.

Corporate
Hungary had adopted a favourable corporation tax rate, which is levied at a standard rate of 16%. On certain occasions this rate can decrease to 10%. Additional solidarity tax at a rate of 4% is applied on corporate entities.

The standard rate of the VAT is 20%, some goods and services are applied with reduced  rates of 15% and 5%.

 
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