Operating a Business

flag Hungary Hungary: Operating a Business

In this page: Legal Forms of Companies | The Active Population in Figures | Working Conditions | The Cost of Labour | Management of Human Resources

 

Legal Forms of Companies

Korlatolt felelossegu tarsasag (KFT) is a Private Limited Company
Number of partners: No limitation on the number of partners.
Capital (max/min): Minimum HUF 500,000. Capital can be contributed in cash or in kind.
Shareholders and liability: Liability is limited to the amount contributed.
Reszveny tarsasag (RT) is a Public Limited Company
Number of partners: No limitation on the number of partners. There are two types of RT: closed company limited by shares or ZRT (shares not available to the public) and Public company limited by shares or NYRT (shares listed on the stock exchange for the public).
Capital (max/min): HUF 5 millionfor ZRT and HUF 20 million for NYRT
Shareholders and liability: Liability is limited to the amount contributed.
Kozkereseti tarsasag (KFT) is a general partnership
Number of partners: Minimum two partners.
Capital (max/min): No minimum capital required
Shareholders and liability: Members' liability for the partnership's obligations is joint and unlimited.
Beteti tarsasag (BT) is a limited partnership
Number of partners: No limitation on the number of partners. Two types of partners: active partners (General Partner) and sleeping partners (Limited Partner). There must be at least one of each type.
Capital (max/min): No minimum capital
Shareholders and liability: Unlimited liability for General Partner.

Limited liability for the external partners (Limited Partner).

 

Business Directories

Financial Information Directories
Dun & Bradstreet - Worldwide directory with financial information on businesses

To go further, check out our service Business Directories.


 

Professional Associations

General Professional Associations
FIVOSZ - Young Entrepreneurs Association Hungary
MGYOSZ - Confederation of Hungarian Employers and Industrialists

To go further, check out our service Professional Associations.


 

Business Setup Procedures

Setting Up a Company Hungary Eastern Europe & Central Asia
Procedures (number) 6.00 5.26
Time (days) 7.00 11.78

Source: Doing Business - Latest available data.

 
The Competent Organisation
The Commercial Register.
For Further Information
Doing Business Website, Consult this to learn about steps for starting a business in Hungary.
Trade Register
 

Recovery Procedures

Principle
More information on LawyersHungary website.
Minimum Debt-to-Capital Ratio Triggering Liquidation
More information on LawyersHungary website.
Bankruptcy Laws
Law VI. Of the year 2006 (only in Hungarian).
Criminal Bankruptcy.
Bankruptcy and liquidation procedures.
Reorganization and Rehabilitation Laws
Law VI. Of the year 2006 (only in Hungarian).

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The Active Population in Figures

201820192020
Labour Force 4,732,2124,750,6364,732,423

Source: International Labour Organization, ILOSTAT database

 
201720182019
Total activity rate 71.09%71.93%72.57%
Men activity rate 78.16%79.04%79.95%
Women activity rate 64.15%64.93%65.28%

Source: International Labour Organization, ILOSTAT database

 
Employed Persons, by Occupation (% of Total Labour Force) 2015
Manufacturing 21.4%
Wholesale and retail trade; repair of motor vehicles and motorcycles 12.9%
Public administration and defence; compulsory social security 10.0%
Education 7.6%
Human health and social work activities 6.5%
Construction 6.5%
Transportation and storage 6.3%
Agriculture, forestry and fishing 4.9%
Accommodation and food service activities 4.5%
Administrative and support service activities 3.8%
Professional, scientific and technical activities 3.8%
Information and communication 2.4%
Financial and insurance activities 2.1%
Arts, entertainment and recreation 1.9%
Water supply; sewerage, waste management and remediation activities 1.4%
Electricity, gas, steam and air conditioning supply 0.8%
Real estate activities 0.4%
Mining and quarrying 0.2%
 

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Working Conditions

Opening Hours
 
  • Legal Weekly Duration
40 hours per week
  • Maximum Duration
60 hours per week
  • Night Hours
Work carried out between 22 hours and 6 hours is classified as night work.
Working Rest Day
A 48 hours rest period is required during any seven day period.
Paid Annual Vacation
The standard number of days of annual leave is 21. The amount of days of holiday will increase according to your age. The older you are the more days of holiday you get. Example: 21 days from age 25, 22 days from age 28, 23 days from age 31, 24 days from age 33, 25 days from age 35, etc.
Retirement Age
20 years in service and minimum retirement age is 62 years old.
Child Labour and Minimum Age For Employment
The law protects children from exploitation in the workplace. Children under 16 are prohibited from working, except under certain conditions, such as temporary work during school vacations for those between 14 and 16. Children may not work night shifts, overtime, or at hard physical labor.
Informal Labour Market
Quite important especially on construction sites and cash related jobs (hairdresser, plumber, etc).

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The Cost of Labour

Pay

Minimum Wage
The minimum monthly wage for full-time employees is HUF 200,000 (EUR 542) in 2022.

In case of full-time employees hired for jobs requiring at least secondary school qualification or secondary vocational qualification, the guaranteed gross wage minimum stated for the application of a monthly wage is HUF 260,000 (EUR 735) (Eurostat).
Average Wage
According to the Central Statistical Office, in 2021 the gross average earnings were HUF 425,915.
Other Forms of Pay
  • Pay For Overtime
+25% - 50% depending on the overtime
  • Pay For Rest Days Worked
According to collective agreements
  • Pay For Night Hours
10-25%
  • Pay For Overtime at Night
Like overtime
 

Social Security Costs

The Areas Covered
The Hungarian social insurance system contains the following elements:
- Health service
- Social care
- Family and Child welfare
- Pensions and assistances
- Unemployment assistance
- Education
Contributions
Contributions Paid By the Employer: 13%
Contributions Paid By the Employee: 18.5% (10% pension contribution and 8.5% health care and labour force contribution) without cap. An additional 6.5% health tax is payable on interest income and 14% health tax on capital gains.
Competent Organization
National Tax and Customs Administration of Hungary (NTCA)

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Management of Human Resources

 

Recruitment

Method of Recruitment
Newspaper, headhunters, Internet, fairs.
Recruitment Agencies
Addeco, EastEuroCo Executive Search Group, Telkes Consulting Incorporated.
Recruitment Websites
Job Monitor
 

The Contract

Type of Contract
Full- and part-time contracts, assignment contracts, outsourcing contracts. More information on Just Landed website.

Breach of Contracts

  • Retirement
The old-age retirement age limit is 62 for both man and woman. Details of early retirement and pre-early retirements on Hungary website.
  • Dismissals
In Hungary, the statutory notice period ranges from 30 days (after up to 3 years of service) to 90 days (after 20 years of service). For half of the notice period, the employee must be exempted from work. Severance pay amounts to one monthly wage after 3 years of service and gradually increases to 6 monthly wages after 25 years of service.

A new Labor Code came into force on July 1, 2012. It left the basic legal framework unchanged but introduced some significant changes to make the labor market more flexible and to boost the labor force participation rate.

Details in the Labor Code of Hungary, law XXII of the year 1992.

  • Other Possible Methods
Details in the Labor Code of Hungary, law XXII of the year 1992.
Labour Laws
Labor Code of Hungary, law XXII of the year 1992
Hungarian Labour Laws, Consult this website to obtain a summary of the labour regulations that apply to local entreprises.
 

Dispute Settlement

 

Conciliation Process

Cases of Dispute
Bad behavior at work, sexual harassment, psychological harassment, etc.
  • Procedure
Labor Code of Hungary, law XXII of the year 1992
 

Judicial Structures

  • Legal Framework
Labor Code of Hungary, law XXII of the year 1992
 

Social Partners

Social Dialogue and Involvement of Social Partners
The law allows unions to conduct their activities without interference, and the Government protects this right. Collective bargaining is protected by law is freely practised. Approximately 40% of the workforce is covered by collective bargaining agreements (almost 3,000 collective bargaining agreements exist). Workers have the right to strike and occasionally exercise this right.
Unionisation Rate
40%
Unions
Cooperation Forum of Unions
National Organisation of Hungarian Unions
Regulation Bodies
Hungarian Labour Inspectorate
 
 

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Latest Update: November 2022