The duration of business residency in Hungary is up to 3 years: initially, the residence permit is issued for one year with the possibility of extending it for an additional two years.
The residence permit can be extended if the applicant:

• owns a company that provides an income of more than 1,500 euros per month;
  
• rents or owns residential property;
  
• spends at least 90 days in Hungary within a six-month period.
  

When extending the residence permit for opening a company, family members of the primary applicant can obtain a residence permit. After 3 years, a foreigner can reapply for a residence permit with the same company.

Companies in Hungary pay the following taxes:

• Corporate tax — 9%
  
• Social tax — 13% of the wage fund
  
• Municipal business tax — up to 2%
  
• VAT — from 5% to 27% depending on the category of goods or services
  

Local authorities set the municipal tax. There is no business tax in Budapest.

VAT is paid by companies with a turnover of more than 12 million forints or 30,500 euros per year. The last VAT payer in the supply chain within the European Union is responsible for the tax. For example, a Hungarian company does not pay VAT when supplying goods to a retailer in Germany.

Small and medium-sized businesses can use simplified tax systems, such as KIVA and KATA.