Doing a small business is simple and cost effective via self-employment. If the self-employment activity is regular and its purpose is to make a profit, pursuing the given activity in Hungary involves a private entrepreneurship registration obligation (in some cases, the private entrepreneurship registration is not required, e.g., in case of renting a property or working as a farmer with special licence).
The number of private entrepreneurs was increased significantly in the last five years, while this trend with the collective enterprises (like limited liability companies) were the opposite. One of the underlying factors of this process was the increase of the minimum amount of the share capital of the limited liability companies from HUF 500,000 to HUF 3,000,000 in 2013. As a further reason, the Hungarian Government introduced a special form of private entrepreneurship in the same year, called KATA. KATA has a very simple tax payment method and with its monthly HUF 50,000 (or in some cases, HUF 25,000) flat tax rate, it is the cheapest entrepreneurship form from a certain level of income.
Being a private entrepreneur is a good choice to earn your living, as well as if you just want to run an own business beside your full-time job. EEA nationals, Swiss citizen and third-country nationals holding a given type of residence permit are also allowed to perform private entrepreneurship activities in Hungary.
Sources:
Act V of 2013 on the Civil Code.
https://net.jogtar.hu/jogszabaly?docid=a1300005.tv
Act CXV of 2009 on private entrepreneur and private enterprise.
https://net.jogtar.hu/jogszabaly?docid=a0900115.tv
Act CXVII of 1995 on the personal income tax.
https://net.jogtar.hu/jogszabaly?docid=99500117.tv
Hungarian Central Statistical Office (2020). Number of registered private entrepreneurs by industry.
https://www.ksh.hu/docs/hun/xstadat/xstadat_evkozi/e_qvd005c.html?down=55
Hungarian Central Statistical Office (2020). Number of registered entreprises, 2019.
http://www.ksh.hu/docs/hun/xftp/idoszaki/gazd/2019/index.html?fbclid=IwAR03bjaGBN82TQaKgj9iT216WiP9JDN9pupDZ7cCB64zRWaUp46mBS9At9o
National Tax and Customs Administration (2020). Income from self-employment and its taxation.
https://nav.gov.hu/nav/inf_fuz/2020
