How to Verify a Company in Hungary? An Ultimate Guide

In a World Bank survey, Hungary ranked first among the 190 countries surveyed on the ease of trading across borders. The GDP in Hungary has been increasing from one year to the other since 2010, and the record growth levels hit 5.2% in 2019. All this indicates that Hungary is becoming an outstanding place to expand business. Interestingly, it has always been part of the European region that linked the Eastern and the Western parts of the continent, so building a business partnership in Hungary would provide fast and direct access to Europe. 

Although there is potential for business networking in Hungary, it is a legal requirement to verify a company in Hungary beforehand. The company verification process involves the inspection of the legal status of the company and its ownership. In this read, let’s discover how you can conduct a business screening and how to verify an online business before initiating any official partnership. 

How to Verify if a Company is Registered in Hungary?

If you are looking to verify a business, screen the company information against the public registry. The Courts of Registration maintain the Hungary company registry (Cégjegyzék), which includes companies, partnerships, and sole proprietorships. These courts are responsible for the record-keeping of regional business entities. 

However, the Ministry of Justice in Hungary oversees the legal framework within which these courts operate.  It has a website named Ministry of Justice Company Information and Electronic Company Transaction Service (Céginformációs Szolgálat). As its name implies, it facilitates the public search and view of company information to verify a company in Hungary. The Ministry of Justice’s Company Information and Electronic Business Processes Service’s website was created on January 1, 2008, and provides free access to certain company data online. 

Additionally, this portal offers an E-Company service for business document screening, which ensures transparency and legal compliance in business operations. 

Step-by-Step Guide to Verify a Company in Hungary

The Ministry of Justice’s Company Information and Electronic Business Processes Service website is available in both English and Hungarian versions. At this site, these steps will allow you to verify a company in Hungary:

• Search Bar: You can start a company search from the field in the upper right corner, where you can enter the company name in English or Hungarian, as well as the company registration number or tax number. 

• Company Search Menu: At the company search menu, you will have to search the start of the company name, company registration number, tax number, and headquarters.  

• Search by company registration number or tax number: For a successful search, enter the full company registration number and the first eight digits of the tax number.  

• Given Results: After a successful search, the full name of the company, physical address, registration number, and tax number are shown. 

Challenges to Verify a Company in Hungary

In business screening, you confront the challenges that hinder the verify a company in Hungary. Let’s take a look at a few of them: 

• Free Trade Zones

Free trade zones FTZs attract foreign investors as the lax regulations increase the chance of business growth. However, building a business relationship in FTZs is quite challenging as it requires rigorous verification. It is crucial to verify a company in Hungary is operating in a free trade zone as it reduces the financial risks. Being a foreign investor, you may have poor knowledge of how to verify a company is real and which authority is relevant for a business license in the FTZ region. Additionally, the business owners in FTZs are prone to money laundering, so it is necessary to apply company legit checks for regulation compliance.

• Sanctions Compliance

After the Ukraine-Russia war, the European Union enforced sanctions on businesses and business persons, which made relations with Russia. Since Hungary’s prime minister supports Russia, it has closer bonds with other EU members. The EU published a list of the sanctioned entities and individuals as a result of their business partnerships with Russia. So, it is necessary but challenging to cross-check the business and business owner’s name against the EU-sanctioned list. Additionally, company onboarding, which comes under sanction, may lead to penalties and heavy fines. 

• Language Barrier

Although a user accessing the company information service in English translation, the problem of language barrier appears when it comes to documentation. To obtain direct access to the National Company Register and Company Information System, one has to agree to the contract with the Company Information Service of the Ministry of Justice. On the website, the contract sample is given, but it is written in Hungarian, so it is difficult to get an idea from it.

• Captcha Error

One of the continuous hurdles to verifying a company in Hungary is a captcha error at the official site. Before you proceed with any search, the website requires verification from you as a human. Interestingly, the captcha always appears in the Hungarian language, so it is difficult to understand its requirements. 

How to Verify an Ultimate Beneficial Owner UBO in Hungary?

In Hungary, the UBO is the natural person who possesses or controls, directly or indirectly, at least 25 percent of the shares. Also, he has voting rights in the legal entity or the unincorporated business association. The beneficial owner’s data can be disclosed only to those persons or companies and to relevant authorities, such as financial institutions and certain supervisory authorities. At the Ministry of Justice Company Information and Electronic Company Transaction Service, the UBO data is not publicly available. E-company service involves requesting the shareholder’s details, but it is paid. To access the UBO documentation, you must pay the required fee to the official registry.

Conducting AML Checks on Businesses in Hungary

One of the critical steps to verify a company in Hungary is to apply anti-money laundering AML checks over the counterparty. The AML checks are applied to the company and the shareholders to identify whether they comply with laws. AML checks in Hungary are governed by the Anti-Money Laundering Act (Act LIII of 2017), which aligns with EU directives, particularly the 4th and 5th Anti-Money Laundering Directives (AMLD). These laws require entities to identify and verify businesses’ ultimate beneficial owners (UBOs), conduct business due diligence, and report suspicious activities. Additionally, background checks are applied to filter out false negatives, sanctioned, blacklisted, and politically exposed people.

Hungarian Business License and Certificate Verification

There are authorities that issue licenses and certificates to businesses depending on their type and intended purpose. It is necessary to collect and screen a business license to verify a company in Hungary. Some of them are discussed below:

• Hungarian Investment Promotion Agency (HIPA)

In Hungary, business licenses for operations within Free Trade Zones (FTZs) are typically issued by the Hungarian Investment Promotion Agency (HIPA). HIPA is responsible for facilitating investment and supporting companies looking to establish or expand their operations in Hungary, including within Free Trade Zones. Depending on the Free Trade Zone, you may also need to coordinate with local municipal authorities or specific zone management offices for additional permits or approvals. Hence, it is crucial to verify a company in Hungary complies with all relevant regulations, including customs, tax, and trade rules applicable to the Free Trade Zone.

• National Tax and Customs Administration

The regulatory body responsible for overseeing online gambling in Hungary is the National Tax and Customs Administration (Nemzeti Adó- és Vámhivatal, NAV), specifically its Gambling Supervisory Authority. The authority issues licenses for various forms of gambling, including online gaming and sports betting, ensuring that operators comply with Hungarian laws and regulations. To verify, an online gambling company in Hungary must check its license against the National Tax and Customs Administration databases.         

• Hungarian Central Bank 

Hungary’s central body for granting, approving, and supervising licenses for various types of financial companies is the Hungarian Central Bank (Magyar Nemzeti Bank, MNB). MNB conducts the licensing of banks, insurance companies, and various types of investment companies and payment service providers. Before onboarding the financial institution operating in Hungary, you must verify its license from the MNB. A complete assessment of the stability of the institutions’ economy, management, and compliance with the regulatory standards is required.

• National Food Chain Safety Office (Nébih)

The National Food Chain Safety Office is a legal entity entitled to exercise control and issue licenses in the sphere of food safety. It deals with issuing permits for the production, distribution, and sale of wines. The wine business license verifications also check on the standards of hygiene and legal requirements in the food business. 

The KYB – Your Partner In Business Success

If you are planning to make a business bond, it is inevitable that you will verify a company in Hungary through a professional Know Your Business service. Verifying a company on your own is quite challenging because of free trade zones, sanction compliance, language barriers, and captcha errors.

The KYB always welcomes the business world to verify companies across  250+ countries and states through extensive databases of 300M+ companies. In Hungary, we provide expert business verification services by consolidating data from 14+ sources. Our fast API quickly retrieves company information from multiple bodies to verify business licenses and certificates. We are vigilant in conducting AML checks on businesses and shareholders to ensure compliance with legal requirements. Make contact today with The KYB to verify a company in Hungary with 100% financial security in bond making.