Testimonial
Manuel Ramos
TERAO ASIA
Managing Director
We think INS Global is a good solution about starting business in new and complex markets. Understanding the market doesn’t mean you need to set up a company immediately.
5/5
Hungary is a growing economy in Central Europe, strategically located with a skilled workforce and favorable conditions for foreign investment. Known for its competitive labor costs, developed infrastructure, and business-friendly environment, Hungary is becoming a prime destination for businesses looking to expand. However, entering the Hungarian market involves navigating complex labor laws, tax regulations, and ensuring full compliance with local employment rules. Using an Employer of Record (EOR) in Hungary simplifies the process, allowing businesses to hire employees locally without needing to establish a legal entity.
This guide explores how EOR services can help your business grow in Hungary while remaining compliant with all necessary regulations.
Your collaboration with an EOR in Hungary starts with a comprehensive review of your business’s expansion goals. The EOR evaluates your workforce needs, including the number of employees, their roles, and the timeline for entering the Hungarian market. The EOR then tailors its services to fit your specific requirements, ensuring a seamless market entry.
The EOR handles all recruitment and onboarding processes, ensuring that employment contracts meet Hungarian labor laws. The EOR also manages the legal complexities involved in employment, including work permits, visa processing, and payroll setup. Acting as your legal employer, the EOR ensures that your employees are hired in full compliance with Hungarian regulations, avoiding the need for your company to establish a legal entity in Hungary.
Once operations are established, the EOR manages all ongoing HR tasks such as payroll processing, employee benefits, and tax compliance. The EOR ensures continuous compliance with social security contributions and health insurance regulations, serving as the HR liaison between your business and your Hungarian team. This allows your company to focus on growth, knowing that all local compliance requirements are being met.
An EOR in Hungary simplifies the process of entering the market by handling all local regulatory requirements, including tax laws and labor regulations, allowing you to operate quickly and efficiently.
Navigating Hungary’s labor laws and tax system can be complex. An EOR ensures your business is compliant with local employment laws, social security regulations, and tax obligations, minimizing the risk of non-compliance.
By acting as your legal employer in Hungary, the EOR minimizes your legal exposure to risks associated with local employment laws. The EOR manages employment contracts, employee benefits, and payroll according to Hungarian legal standards, protecting your company from potential penalties or legal disputes.
An EOR provides a cost-effective alternative to establishing a legal entity in Hungary. By outsourcing payroll and administrative tasks to the EOR, your company can avoid the significant costs associated with setting up and maintaining a local entity, which is especially beneficial for businesses operating on a temporary or project-based basis.
By outsourcing HR functions such as recruitment, payroll, and tax management to an EOR, your company can focus on core business activities and strategic initiatives, rather than getting bogged down by administrative tasks.
Testimonial
Manuel Ramos
TERAO ASIA
Managing Director
We think INS Global is a good solution about starting business in new and complex markets. Understanding the market doesn’t mean you need to set up a company immediately.
While establishing a subsidiary in Hungary is an option, working with an EOR provides several distinct advantages:
An EOR in Hungary allows businesses to enter the market more quickly than incorporating a local entity. Setting up a legal entity can take months, while an EOR can have your team operational in just a few weeks, enabling rapid market entry.
Both EORs and subsidiaries must adhere to Hungarian labor laws and tax regulations, but an EOR brings local expertise to ensure full compliance, reducing the need for an in-house legal or HR team.
For smaller teams or temporary projects, an EOR is often a more cost-effective solution than creating a local subsidiary. EOR services allow you to avoid upfront incorporation costs and reduce ongoing administrative expenses, while also benefiting from a streamlined payroll system for multinational operations.
While company incorporation provides full control over HR, operations, and payroll, working with an EOR still allows you to maintain significant control over your Hungarian workforce without dealing with the administrative and legal complexities of full incorporation.
Choose an EOR in Hungary with a solid reputation and a proven track record. Look for an EOR with extensive experience in Hungary and one that has worked successfully with companies in your industry.
Ensure the EOR offers a complete range of services, from payroll processing and tax compliance to managing Hungarian employment laws. The EOR should be able to customize their services to match your business’s needs.
Select an EOR that can grow alongside your business. As your company expands in Hungary, the EOR should be able to scale its services to handle more employees and more complex administrative tasks.
Effective communication is key to a successful partnership. Choose an EOR that provides regular updates on regulatory changes, deadlines, and any potential issues. Having a dedicated point of contact ensures smooth and efficient communication.
Compare the pricing models of different EOR providers in Hungary. Ensure that the costs are transparent and competitive, with no hidden fees. Consulting third-party sources can help you get the best value for your investment.
In Hungary, employment contracts must comply with local labor laws and clearly outline all terms, including salary, working hours, benefits, and termination clauses. An EOR ensures that all contracts are in full compliance with Hungarian labor law.
Probationary periods in Hungary typically last up to 3 months. During this time, either party can terminate the contract with shorter notice. An EOR ensures that probation periods meet legal requirements while providing flexibility for employers to assess new hires.
The standard workweek in Hungary is 40 hours, with strict regulations governing overtime. Employees are entitled to regular rest periods, and overtime must be compensated either with additional pay or time off. An EOR ensures compliance with working hours regulations and manages overtime payments.
Employees in Hungary are entitled to 20 days of paid annual leave, with additional paid leave for public holidays, sick leave, and maternity/paternity leave. An EOR manages these entitlements, ensuring compliance with Hungarian labor laws and proper compensation for employees.
Employers and employees in Hungary must contribute to the social security system, which includes health insurance, pensions, and other benefits. An EOR ensures that these contributions are made correctly and in compliance with local regulations, covering all employee entitlements.
Severance pay is required in Hungary under certain conditions, such as dismissals due to economic reasons or restructuring. An EOR ensures compliance with Hungarian labor laws concerning terminations and severance pay, managing the process smoothly and legally.
An EOR in Hungary helps your company navigate the complexities of Hungarian labor laws by managing payroll, employment contracts, and compliance, ensuring your business operates within local legal frameworks.
An EOR allows businesses to avoid the high costs of setting up a local entity, such as incorporation fees and ongoing administrative expenses. The EOR manages all legal and payroll functions at a fraction of the cost, making it ideal for small and medium-sized enterprises.
Yes, an EOR can manage the entire process of obtaining work permits and visas for expatriates, ensuring compliance with Hungarian immigration laws and facilitating a smooth hiring process.
With an EOR, businesses can typically start hiring within a matter of weeks or even days. The EOR handles all the legal, administrative, and compliance tasks, ensuring fast and efficient onboarding.
An EOR manages the termination process in full compliance with Hungarian labor law, ensuring that any required severance pay or notice periods are properly handled to minimize legal risks.
An EOR manages all aspects of payroll in Hungary, including calculating wages, taxes, and social security contributions, ensuring that employees are paid on time and in compliance with local laws.
Industries such as manufacturing, technology, automotive, and pharmaceuticals benefit significantly from using EOR services in Hungary, allowing companies to expand quickly and efficiently without the costs of full incorporation.
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