Company formation?

gnud44 wrote:

Hello fellow expats.

Is it possible to create a company without an Address card and a Tax card?

I have an apartment already, did all the registrations, have my Registration card and my tax number, but those two cards will take weeks to arrive.

Today I spoke to LOGOSZ, they told me their lawyer is refusing to work with anyone who doesn't have an Address card. When I showed them my Registration card they seemed like they've never seen it before. Then they even added that it can't be just an apartment an a residency but I need to have a permanent residency ... wtf

Frustratingly they didn't mention this weeks ago, but they recommended me some other lawyer who charges 500 EUR for incorporation for foreigners and my foreign address will be in the records ... even though I don't have any foreign address anymore and live in Hungary now.

It seems unbelievable that I'd have to wait for 5 years to get a permanent residency to be allowed to create a company. I even have a hard time believing that I need to wait weeks for a piece of plastic when I clearly have done the registration, have an apartment and live in Hungary.

So I've been wondering if this is really the case? If not, can you recommend any lawyer that I can use in my situation?

That sounds like rubbish.    Are they just messing you around?   You can be from  anywhere and register a company.

Do you have the EEA registration card? 

This the one they issue to EU citizens.   People in Hungary don't know this card.

Yes I have an EEA registration card. That's what I showed them. After a few weeks I'll get also the Address card.

They were serious. No Address card, no company. But since they said it can't be just any apartment,  they didn't know the registration card and told me my foreign address will be in all registers and documents, I suspect that they misunderstood that I did register myself and I actually do have a "permanent" address here.

I'll try again tomorrow with multiple lawyers, but I'm disappointed that it could be done already today in that case.

gnud44 wrote:

Yes I have an EEA registration card. That's what I showed them. After a few weeks I'll get also the Address card.

They were serious. No Address card, no company. But since they said it can't be just any apartment,  they didn't know the registration card and told me my foreign address will be in all registers and documents, I suspect that they misunderstood that I did register myself and I actually do have a "permanent" address here.

I'll try again tomorrow with multiple lawyers, but I'm disappointed that it could be done already today in that case.

They are idiots.  EEA card is perfectly legitimate but no-one knows about them here or abroad.

Address card I can understand they want.     Why don't they prepare the documents on the basis of your ownership or rental contract for your house/apartment? 

Then when the card arrives, they can put the paperwork in.

BTW, you can see all valid documents for Hungary here - PRADO.  There, you will see your EEA card.

I do not understand, but things changed over the last years I created my Kft a number of years ago without any problem (I worked with VGKE), some nice additions as well (social security, official address, ..).
If you are EU citizen it really not be a problem to set up a company I think.
My company was created before I even moved officially.
I am surprised, upset you are having these problems. Just open a bank account with the sufficient funds, go to a lawyer, find a proper accountant and done. (creating a company was more easy for me then getting the residency).

FIRST find a good accountant for your company and he/she will give the lawyer.
I do understand you are not happy with your lawyer, but having a company has benefits but also drawbacks, one thing for sure you have to pay, 

just wondering why things are difficult for you? (not from the EU, not sufficient funds).
I am not saying that you are a scam, but in my experience to create a company is VERY easy (provided you follow the rules)

If you've registered your address and waiting for the address card, you should ask for an official proof of address at the government office that you can use instead of address card until the card arrives.

I'd think you would defo need a HU tax number.
How will they collect taxes from you without it?
I know even to take things to the recycling center you must show your tax ID number to do business with them.
Not sure why but suppose someone was trying to sell off stolen copper pipes or other items.
They want to be able to trace it back to an ID number and address.

cdw057 wrote:

...

just wondering why things are difficult for you? (not from the EU, not sufficient funds).
I am not saying that you are a scam, but in my experience to create a company is VERY easy (provided you follow the rules)

It did occur to me it might a scam.  Usually company formation is easy with the right people.  In my own country, it's possible to get  a company off the shelf with a temporary name, then you change the name afterwards.  Simple procedures.

Perhaps the OP's lawyers are just after more money. 

Not enough capital used to be easy to get over, the usual way was to just borrow or loan the money for the formation period or put enough assets in at the beginning. 

Been a while so don't know if it's the same now.

Marilyn Tassy wrote:

I'd think you would defo need a HU tax number.
How will they collect taxes from you without it?
I know even to take things to the recycling center you must show your tax ID number to do business with them.
Not sure why but suppose someone was trying to sell off stolen copper pipes or other items.
They want to be able to trace it back to an ID number and address.

There's an assumption is that everyone follows the rules is always a problem.   Selling off stolen copper and lead would be relatively easy - just use someone else's tax number.  Or have a regular friendly fence for dodgy work.

One thing which is always surprising with government is them making things illegal.  Like the crooks care if it's illegal or not!   By definition, they are criminals and not complying with the law.   But it's not going to change in any way behaviour of hard criminals.

But politicians make a big thing out of it.  But obviously it does give a basis for prosecution of course.

It's like criminalising asylum seekers and refugees.  People will do what they have to do regardless of the law.  They aren't going to worry about the law when desperate.

Woefully off-topic....sorry...

atomheart wrote:

If you've registered your address and waiting for the address card, you should ask for an official proof of address at the government office that you can use instead of address card until the card arrives.

Thanks a lot, that's a great advice!

Marilyn Tassy wrote:

I'd think you would defo need a HU tax number.
How will they collect taxes from you without it?
I know even to take things to the recycling center you must show your tax ID number to do business with them.
Not sure why but suppose someone was trying to sell off stolen copper pipes or other items.
They want to be able to trace it back to an ID number and address.

I have my tax number. The problem is the Address card. But I have an EEA registration card which is basically the same thing, issued by the same institution, and a result of the same process. Just one is done on the spot, the other takes weeks to arrive.

I tried another LOGOSZ office, the same result. No Address card, no company. They told me I need to wait to receive it, possibly weeks, and then I can come and setup the company with them.

In the end I went with another lawyer, who had no problem with that. He just said that it may not pass through the Hungarian system. But we checked in the government records, and my address is already there. So we did it, submitted all the documents, and now we're waiting if they will accept it or not.

btw the company name needs to be sufficiently different from any other company name. One or two characters are not enough. Even 4 or 5  may not be enough if it's pronounced in a similar way. It's all up to a judgement of the court if it's similar or not. That too can be a reason for rejection.

The guy seemed like a total amateur, sloppy, with a terrible web presentation, asked for more money than LOGOSZ (about 20-30 EUR more), but at least he was willing to deal with me, be flexible and find a way. We'll see.

In general I find the process very complicated and cumbersome compared to the UK. If the taxes are not so low, or it's not in the EU, I'd be looking elsewhere.

gnud44 wrote:

....

I have my tax number. The problem is the Address card. But I have an EEA registration card which is basically the same thing, issued by the same institution, and a result of the same process. Just one is done on the spot, the other takes weeks to arrive.

It's not quite the same thing as the address card - not machine readable for one thing.

I just looked at my EEA card (now expired due to Brexit) and the address is on there.   What more do people want.  The people you were dealing with sound like amateurs.

That EEA card is hardly recognised by anyone.  I tried to use mine to cross a Schengen border in Germany and they didn't know what it was and stamped my passport for 30 days.  It was still valid and they should not have stamped my passport.   Looks like someone could have made it at home.  Post-Brexit, it's a PITA.

All a bit moot, the card has expired anyway now.  Replaced by residence permit.

I just received the company number, its tax number and VAT number. That was very quick.

So it means it passed even without me having the Address card yet.

Final confirmation from the court tomorrow probably. Hopefully they won't have a problem with anything.

I'm very grateful to this lawyer willing to try to find a solution.

gnud44 wrote:

But I have an EEA registration card which is basically the same thing, issued by the same institution, and a result of the same process.

False, not the same thing, issued by a different institution. It has an "address" on it, but the "lakcimkartya" is the official document to prove your address, and it has more detailed info. But until it's issued, government offices can give you a proof, which is an a4 paper with all the details, and you can use that wherever a lakcimkartya is needed.

You mention taxes. Out of curiosity what kind of taxes are you paying? Find it weird that Hungary looked like the best option in EU...

Corporate tax. The lowest in the EU. Dividend tax will also be 0% if set-up correctly. So with the local tax now lowered to 1% max, it will be 10% in total. I will not pay myself any salary or dividends.

Romania has 3% (or 1% if you hire at least one employee), but it's on revenue, not profit.
Estonia has a 0% corp tax, but 20% on any distribution.

Moreover prices in Hungary are generally low, and Budapest is the main hub of Wizzair.

gnud44 wrote:

I will not pay myself any salary or dividends.

Are you going to pay all your income to a Seychelles/Caimans/etc entity for "services"? 

atomheart wrote:

gnud44 wrote:

I will not pay myself any salary or dividends.

Are you going to pay all your income to a Seychelles/Caimans/etc entity for "services"? 

LOL no, that's an invitation for investigation.

I have enough savings for years.

I will lend it to the company at 0% interest rate to reinvest so that it doesn't just sit on my account, and the company will be returning the money to me in small chunks every month (while keeping the profit within, of course). After that I will implement the dividend optimized structure and cash out.

All done. Took only 24 hours. Glad I found this lawyer!

gnud44 wrote:

All done. Took only 24 hours. Glad I found this lawyer!

I hope the other lot refunded you something for the hassle they caused.

@gnud44 Stay vigilant I would say, the form of the company can make a big difference, when to be able to write off things, when not, can you save employing your wife in the company (health care). I chose for a Kft. for a number of reasons, also ne careful with the VAT topic and recoupinig, losses of a company being offset etc.

@gnud44 Hi. This is a catch 22, but you do not need to spend 500 USD. If you have Residency and an "alando lakcim" kartya, you can contact my attorney who is back from Holiday on Monday. Her name is Dr. Agnes RIgo and her office is located in the second district close to the Swimming pool (Hajos Swimming pool). We are not allowed to give phone numbers on this forum as that is like an "ad".