If you’re an entrepreneur, freelancer, or digital nomad, you know the frustration: high taxes, endless paperwork, and the constant feeling that the state is taking more than its fair share. In 2025, Hungary offers a refreshingly straightforward solution for those seeking to optimize their tax burden and operate with greater autonomy. Here’s a data-driven breakdown of the sole proprietorship status—Egyéni vállalkozó—and how you can leverage it to your advantage.
Understanding Sole Proprietorship in Hungary: Key Features
Hungary’s sole proprietorship status, known locally as Egyéni vállalkozó, is actively used by freelancers, small traders, and service providers. This business form allows individuals to invoice clients and conduct business without the complexity of forming a separate legal entity. Registration is accessible to Hungarian citizens and EEA nationals, making it a practical choice for many international entrepreneurs.
| Feature | Details (2025) |
|---|---|
| Status Name | Egyéni vállalkozó (Sole Proprietor) |
| Who Can Register? | Hungarian citizens & EEA nationals |
| Legal Entity Required? | No |
| Popular Tax Regimes | Standard Taxation or KATA (flat-rate) |
Tax Optimization for Sole Proprietors: Your 2025 Playbook
Hungary’s system is designed for flexibility. You can choose between the standard tax regime or the simplified KATA regime, each with distinct advantages.
1. KATA Regime: Flat-Rate Simplicity
The KATA (Kisadózó vállalkozások tételes adója) regime is a favorite among freelancers and small business owners. In 2025, it offers a flat monthly tax—generally HUF 50,000 (approx. $140) or HUF 75,000 (approx. $210), depending on your income level and activity. This single payment replaces most other taxes, streamlining your obligations and making cash flow predictable.
- Pro Tip #1: If your annual revenue fits within KATA’s limits, this regime can dramatically reduce your effective tax rate and paperwork.
- Pro Tip #2: KATA is especially advantageous for those with a steady stream of smaller invoices, such as consultants or digital service providers.
2. Standard Taxation: Flexibility for Higher Earners
If your business outgrows KATA or your activities don’t qualify, the standard regime applies. In 2025, this means:
- Personal income tax at 15%
- Social security contributions
- Other possible taxes depending on your activity
Pro Tip #3: For those with higher expenses or complex deductions, the standard regime may offer more flexibility to optimize your taxable base.
How to Register as a Sole Proprietor in Hungary
Registration is straightforward and can be completed online. Here’s a quick checklist:
- Confirm your eligibility (Hungarian citizen or EEA national)
- Visit the official registration portal: nyilvantarto.hu/hu/evig
- Submit your application and select your preferred tax regime (KATA or standard)
- Receive your business registration number and start invoicing clients
Pro Tip #4: Registration is typically processed within a few days, allowing you to start operating almost immediately.
Case Example: Freelance Web Developer in Budapest
Consider Anna, a freelance web developer based in Budapest. She registers as an Egyéni vállalkozó and opts for the KATA regime. In 2025, she pays a flat HUF 50,000 ($140) per month, regardless of whether she earns HUF 500,000 or HUF 2,000,000 per month. Her administrative burden is minimal, and she retains more of her income compared to traditional employment or more complex business structures.
Summary: Why Hungary’s Sole Proprietorship Status Stands Out in 2025
- Accessible to both locals and EEA nationals
- Flexible tax regimes: choose between flat-rate KATA or standard taxation
- Minimal bureaucracy and fast registration
- Widely used by freelancers, digital nomads, and small business owners
For those seeking to minimize state-imposed costs and maximize operational freedom, Hungary’s Egyéni vállalkozó status is a compelling option in 2025.
For more details, consult the official resources: