Hungary is an increasingly attractive destination for people who want to run a business inside the European Union. Whether you are a freelancer, a consultant, an online entrepreneur or planning something larger, there are several ways to operate your business legally here.
For most individuals the first big decision is whether to register as a sole proprietor (egyéni vállalkozó, EV) or to set up a company. Which one is right depends on the nature of your activity, your expected revenue, your liability exposure, your tax position and your long-term plans.
This article walks you through starting a sole proprietorship in Hungary: who is eligible, what information and conditions you need, how long it takes, and which tax questions to think about.
If you would rather set up a company, read our related guide: Company formation in Hungary.
What is a sole proprietorship?
A sole proprietor is a natural person carrying out business activity in their own name and at their own economic risk, without setting up a separate company. The English terms sole proprietor, self-employed and independent contractor all describe this same arrangement.
A sole proprietor does not necessarily work alone: you can employ staff, carry out several activities, and under certain conditions operate from more than one site.
Who can be a sole proprietor in Hungary?
Sole proprietorship is not limited to Hungarian citizens. Under Hungarian rules, the following may register, among others:
- Hungarian citizens;
- citizens of another member state of the European Union or the European Economic Area;
- certain persons with the same legal status as EEA citizens;
- persons exercising the right of free movement and residence in Hungary;
- certain persons with immigrant or settled status;
- and certain third-country nationals holding a residence permit.
Eligibility, however, does not depend on citizenship alone. For third-country nationals, the appropriate Hungarian residence and work entitlement may also be a condition — the guest self-employed residence permit exists for exactly this purpose.
So as a foreign entrepreneur it is worth clarifying the immigration and residence conditions before you register.
How long does it take?
The speed of the procedure is one of the biggest advantages of a sole proprietorship over a company:
- It is filed online, through the tax authority's (NAV) electronic system.
- Registration is typically immediate, or takes one to two working days at most, and the business may operate from the date of the filing.
That is only the registration, though. Unlike with company formation, there is no lawyer walking you through the process — choosing your taxation regime and your scope of activities is your own decision, and those choices cannot simply be undone later. The real work is not the filing itself, but preparing the decisions that precede it.
What will the business be called?
A sole proprietorship does not work like a kft., where you can freely choose a company name. Your own name is the basis of identification, and in the course of your business activity you must also display the designation „egyéni vállalkozó" or the abbreviation „e.v.", together with your registration number.
You can of course use a trading or brand name for marketing, and it may appear on invoices and business documents too — but alongside the mandatory details, not instead of them.
What do you need in order to start?
Ügyfélkapu access
The filing is electronic, so you need Hungarian electronic identification (Ügyfélkapu) access. This is set up in person: in Hungary at a government office (kormányablak), and abroad at a Hungarian consulate or embassy.
The system was renewed in 2025; we wrote about the details here: Transition to the Ügyfélkapu+ system.
Personal and identification details
- you must be listed in the Hungarian personal data and address register;
- a Hungarian tax identification number (adóazonosító jel) — if you do not have one, it must be requested from NAV;
- a TAJ number (social security number), where relevant. For foreign nationals this has its own procedure, covered in a separate article: How a foreign citizen can obtain a TAJ number.
Details about the business itself
- the address you can use as the registered seat;
- the main activity, plus any further planned activities;
- whether this is a full-time or a secondary business;
- the taxation regime you choose.
The registered seat is the most important of these. A sole proprietor's seat can be a property you own, or one you are otherwise entitled to use — for example under a lease or with the owner's consent. A registered-seat service can also be used.
Which taxation regime can you choose?
This is the most important decision at the outset. The Hungarian system offers several options, and which is most favourable depends heavily on your situation and your planned activity. What matters includes:
- your expected annual revenue;
- your actual business costs;
- whether you invoice private individuals or companies;
- whether the business is full-time or secondary;
- whether your clients are Hungarian or foreign.
You cannot switch between regimes freely during the year, so it is worth getting the choice right at the start.
We covered the individual taxation regimes in separate articles, with figures and worked examples:
Do you need a Hungarian bank account?
You are only required to open a domestic business payment account if you are liable for VAT.
- If you opted for VAT exemption for small businesses, you are not obliged to open a separate business account — you may use your existing personal bank account. (Your bank's own terms may differ, and keeping business and private money apart also makes bookkeeping simpler.)
- If you are not VAT-exempt, the law requires you to hold and use at least one domestic payment account.
What happens after you register?
Following the filing, NAV enters you in the register and issues, among other things, your tax number and your registration number.
Next you need to sort out invoicing: this requires online invoicing software capable of NAV data reporting, which forwards the data of the invoices you issue to the tax authority. If you invoice foreign clients, in several currencies, or partners within the EU, factor that in when choosing the software.
Registration is therefore only the first step. After it you have continuing obligations: taxation, invoicing and NAV data reporting, tax returns, contributions, and VAT and local business tax where applicable. Exactly which ones apply depends on your activity, your taxation regime and your status.
Suspension and closing down
If you do not want to trade for a while, a sole proprietorship can be suspended — during suspension there is no contribution obligation, the business does not cease to exist, and it can be restarted later. That flexibility is another advantage of the sole proprietor form: a kft. cannot be "suspended", it has to go through liquidation, which takes months.
How can DigitalConto help?
Starting a Hungarian business as a foreigner can be complex, because it involves not only choosing a business form but tax, legal and sometimes immigration questions too.
DigitalConto supports both Hungarian businesses and foreign entrepreneurs with the administrative and professional tasks of getting started. Our team includes qualified accountants, and we work together with reliable legal partners.
We can help with, among other things:
- starting a sole proprietorship;
- choosing the right business form;
- reviewing your taxation options;
- bookkeeping and tax returns;
- company formation in Hungary;
- the procedures that come with running a company;
- immigration and residence matters;
- setting up the Hungarian operations of foreign entrepreneurs.
Even if you are still in the planning phase, it is worth talking it through: choosing the business form and the tax structure is an important decision before you start.
