Hungarian Trust as an alternative of holding company

The holding companies are widely used for a lot of different business purpose such as asset protection for families or direct investments of private equity funds, etc. Since the Hungarian Trust is subject to corporate income tax it also benefit the same CIT benefits but has extra features. What makes them usage attractive. 

In Hungary we have not so called Holding Company Regime. At the same time, the Hungarian Companies have the same benefits as the well-known holding companies is other EU countries.   

For the Corporate Income Tax payer, the inbound dividend is tax free – except from controlled foreign companies – and the capital gain can be tax free as well. Hungary has wide double tax treary network. In some case the HU holding structure is used as intermediary holding to avoid the witholding tax. 

Why better sometime the trust? 

The Hungarian Trust – or as officially called the fiduciary asset management contract – is subject to corporate tax. It also means that:

the dividend income from non-CFC and the capital gain of so-called declared shares is free of corporate tax. 

In case:

  • the Hungarian Trust has only physical person settlors and beneficiaries as well as
  • only finacial type of income

the full annual income is corporate tax free. 

It means that:

  • the capital gain,
  • the interest and
  • the income of disposal of debts is also free of corporate tax.

The financial income is also not subject to local business tax. 

Simply to set up and also to close 

The registration process of the Hungarian Trust is simplier than the company formation in case

  • the trustee is professional trustee and
  • the trust deed is valid with immediate effect.

The trust managed by private trustee has to be registered by the Central Bank of Hungary what takes 3-4 weeks usually. 

The closing of the Hungarian Trust is also simple. After

  • the trustee distributed all assets – capital and yeild as well – the beneficiaries and
  • the tax and duty to the tax office, they have to ask the ask office to cancel the tax number of the trust.

And thats all! The trust has not long voluntary dissolution process and can be closed as soon as the tax bill and all creditors are paid. 


The AIRON TRUST is a leading trust company in Hungary. If you need more information about services provided for fund managers, private trustees or you have questions  about our fiduciary asset management services, please contact us or arrange a meeting with our experts here. 


Disclaimer: All content within this column is provided for general information and educational purpose only, and should not be treated as a substitute for tax or legal advice.