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The Impact of Using an EOR Provider for Canadian Companies Hiring in Hungary


As Canadian businesses continue to expand globally, Hungary presents an attractive landscape due to its central location in Europe and a skilled workforce. However, setting up operations and hiring locally in Hungary involves navigating complex bureaucratic processes and legal frameworks. This article explores the differences between establishing a local entity versus utilizing an Employer of Record (EOR) provider, specifically Gonex, to manage workforce needs in Hungary. We will delve into the intricacies of Hungarian employment laws and the strategic advantages of partnering with an EOR for seamless market entry and operations.


Establishing a Business Entity in Hungary

Hungary offers various business forms for foreign investors, such as private limited companies (Kft) and public limited companies (Nyrt/Zrt). The process includes registering with multiple governmental bodies like the Hungarian Economic Court, tax authorities, and the Chamber of Commerce. The registration demands comprehensive documentation, from corporate bylaws to shareholder details, all requiring certification by a Hungarian attorney. The digital registration system introduced in July 2008 mandates electronic submission of these documents by an attorney within 30 days of company statute finalization.


Starting capital requirements are specified by Hungarian law, with private limited companies needing a minimum of HUF 500,000, and public limited companies requiring HUF 20 million for listed and HUF 5 million for non-listed entities. Post-registration, companies must fulfill obligations such as tax registration, EU VAT number acquisition if trading within the EU, and compliance with local accounting and operational regulations.


The Hungarian Employment Landscape

Hungary’s labor laws provide robust protection for employees, emphasizing the importance of contracts and strict regulations regarding dismissal, sick leave, and maternity benefits. Labor contracts are generally indefinite with provisions for fixed-term contracts under specific conditions. Compliance with these regulations is crucial, as non-adherence can result in severe penalties.


Work hours in Hungary typically span 40 hours per week with a maximum of 250 overtime hours annually, compensated at an additional 50% of the base wage. Public holidays and vacation policies are generous, with employees entitled to a minimum of twenty days of paid annual leave, increasing with age and service duration.


Using an EOR Provider in Hungary: The Gonex Advantage

Legal Compliance and Risk Reduction: Gonex ensures full compliance with Hungarian employment laws, which is particularly beneficial for companies unfamiliar with the local legal environment. This service mitigates risks associated with non-compliance, potentially saving businesses from expensive legal disputes and fines.

No Need for Local Entity Setup: Gonex allows Canadian companies to hire in Hungary without the need to establish a local entity. This is not only cost-effective but also significantly reduces the administrative burden and accelerates the market entry process.

Simplified Payroll and Tax Administration: Managing payroll in a foreign country can be daunting due to different tax regulations and social security requirements. Gonex handles these complexities, ensuring timely and accurate payroll processing, tax filings, and compliance with social security laws.

Strategic Benefits Management: Attracting and retaining top talent in Hungary requires a competitive benefits package. Gonex provides tailored benefits administration, aligning with local norms and expectations to enhance employee satisfaction and loyalty.

Cultural and Regulatory Expertise: Understanding cultural nuances and local business etiquette is vital for successful operations in Hungary. Gonex brings local expertise, facilitating smoother interactions and negotiations with employees and other stakeholders.



For Canadian companies considering expansion into Hungary, the decision between establishing a local entity or partnering with an EOR provider like Gonex can significantly impact their operational success and market penetration strategy. While setting up a business entity in Hungary offers direct control, the associated legal, financial, and administrative challenges are considerable. Gonex, as an EOR provider, offers a compelling alternative that alleviates these burdens by managing all aspects of employment, compliance, and payroll. This partnership enables companies to focus on their core business objectives and growth strategies, ensuring a smooth and compliant operational framework within Hungary. By leveraging Gonex’s expertise, Canadian businesses can navigate the complexities of the Hungarian market more efficiently and with greater confidence.


Why Gonex?

Experienced Management Team: each member in the team has 10+ years experiences in Overseas Human Resources Management, composed of seasoned HR professionals.

Powerful connection: Gonex has established over 10 entities worldwide, along with more than 30 stable partners, together offering the most comprehensive overseas human resource services to our clients.

Strict compliance with laws and regulations: At every step in our service process, Gonex strictly adheres to local laws and regulations, ensuring our clients completely avoid any legal disputes.

Competitive price: Gonex’s services are 20% more affordable compared to other companies in the industry, allowing our clients to allocate more resources to their core business.


What Gonex offer?

Employment of Record: This service helps clients legally hire employees in countries or regions where they do not have a legal entity established.

Payroll BPO service: This includes payroll project implementation plan development, project deployment, payroll calculation, payment of funds, administration of statutory and supplementary benefits, customized reporting, and other comprehensive payroll services.

Mobility: Based on the company’s internationalization strategy, the company assigns employees to overseas branches/subsidiaries and handles visa and tax matters in accordance with local policies, while assisting in the compliance management of employees throughout their international assignment life cycle.


GONEX One-Stop Solution: Your strategic partner

In navigating these challenges, GONEX offers comprehensive solutions tailored to the needs of American companies expanding into South Korea:

Compliance and Legal Adherence: GONEX’s Employer of Record (EOR) service ensures legal compliance in employing local staff.

Cross-Border Payroll and Tax Management: Streamlined payroll services simplify cross-border management.

Flexible Employment Solutions: Adaptable employment services cater to changing business needs.

International Talent Dispatch: Support services facilitate the dispatch of key talent to Japan.

Digital HR Management Platform: Technology-driven solutions enhance management efficiency and cultural integration.


Who do we serve?

Gonex served 70+ clients to expand overseas. The incomes of our clients like Mengniu, Kuaishou and CHINT are up to 192.4 billion.


Let Gonex assist you and your company with handling such complex overseas hiring processes! To access more information on corporate international expansion cases, global employment guidelines, worldwide compensation management, regulations for various regional countries, and factory establishment manuals in different nations, you are welcome to visit the GONEX official website at www.letsgonex.com to download these resources or view our company’s business introduction in PDF format (https://letsgonex.com/in.pdf).

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