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Hungary is on its way to become an offshore heaven

Oct 14, 2021

When discussion on centers of an offshore speculation countries arises, the Balkan country, definitely, is not the first one to come up. However, the relevant tax modifications implied by the Orbán-administration may change the situation dramatically, turning Hungary into the beneficial financial and economic environment for such schemes. That resulted in Hungary receiving criticism for helping international companies avoid and minimalize their taxes. Although, since Hungary has a clean reputation in those questions, more and more companies choose her to run their business on paper there.

Hungary was put on the map of ‘international tax planning’ by the government’s tax modifications made in 2010. Due to experts, the low corporate tax and the lack of several types of business taxes that companies must pay in other European state are enough to make Hungary a perfect target country for tax optimization. Furthermore, if a company registered in the Seychelles-islands founds a subsidiary in Hungary and runs its operations through the latter, offshore structures may get an onshore appearance.

Another important aspect of leading such businesses in that country is the fact, that Hungary’s reputation is not damaged in this respect, so nobody would be suspicious about the background of a company registered there, which does not apply to some well-known offshore paradises like Seychelles. On the contrary, according to various financial experts, even though Hungarian taxation environment seems pretty attractive, they would not label the country as an offshore-wanna-be, since despite corporate taxes being low, the owners cannot hide like they do in the offshore-paradises. Furthermore, they need to have an office, the companies have to open their archives for the taxation authority and it is handy for them to employ a leader spending much time in Hungary.

Moreover, Hungarian companies incur zero withholding tax for dividends, interests and royalties which are paid to foreign corporate owners, which makes it very beneficial for multinational companies, which can transfer their profit abroad without any reduction. Also, Hungary has more than 80 double taxation treaties, including all of EU countries, Canada, China, Hong Kong, Singapore, Switzerland and the US.

After the government decreased corporate tax in the last few years, its current rate is only 9%, which make it the lowest one in the EU. For example, corporate tax in Germany is set to be 15% and in Austria it is up to 27.5%.

We are more than happy to introduce that OFFSHORELICENSE LTD. is offering our services in opening a company under Hungarian jurisdiction. Our team of professionals does not only see Hungary as a beneficial decision, but also a stable jurisdiction, and we strongly recommend to consider opening a company there. Feel free to contact us in case of interest to find out all the details.

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