Workforce Payments Guide Hungary
Last updated: Dec 18, 2023
Papaya Global supports payments, with potential local requirements in Hungary.
Papaya Global supports payments to contractors in Hungary. The payout currency may vary based on the receiver bank account setup when receiving foreign currencies. it is advised for contractors to reach out to their bank to confirm how foreign currencies are handled
In Hungary, companies are required to perform a Know Your Customer (KYC) process. This process is part of the regulations that aim to prevent money laundering, financing of terrorism, and other financial crimes. Here are some key points about the KYC process:
Identity Verification: The company needs to verify the identity of its clients. This can be done by checking national identity cards, passports, resident permits, or other identifying documents for natural persons. For companies, a certificate of public registration, such as a commercial register or a partnership agreement, and identification of partners may be required.
Business Operations: The company should clearly understand its client’s business operations. This includes understanding the names of the company’s directors, business addresses, national insurance or social security numbers, company numbers, and so on.
Risk Assessment: The company should assess the risk associated with the client. This includes understanding the nature of the client’s business, the source of funds, and the expected pattern and level of transactions.
Ongoing Monitoring: The company should continuously monitor the business relationship, including scrutiny of transactions undertaken throughout the relationship to ensure that the transactions being conducted are consistent with the company’s knowledge of the customer.
|IBAN Example Hungary
|IBAN in print
|HU62 1310 0007 2526 1178 7982 4257
|Bank Account Number
Several banking laws and regulations influence cross-border workforce payments.
Correspondent Banking: Correspondent banking refers to formal agreements or relationships between banks to provide payment services for each other. It plays a crucial role in effectuating cross-border payments. The value of global cross-border payments is estimated to increase significantly, and correspondent banking represents a significant portion of this.
Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) Controls: Correspondent banks may bear liability, regulatory, and reputational risk for AML-CTF violations by the respondent banks. This has led to a phenomenon known as “de-risking,” where some banks shed their correspondent banking relationships with smaller banks, often in emerging markets viewed as “high-risk” for AML.
Bank Account Opening
To open a company bank account in Hungary, ensure you have the following:
- Notarized copies of the charter (translated into Hungarian)
- Copy of the company registration certificate
- Deed of Foundation/Articles of Association
- A valid passport
- Proof of Hungarian residence (address card, residence card, or proof of address abroad)
Proof of Employment/Earnings:
- Some banks may require documents showing employment or earnings
- A utility bill for name and address confirmation
- Documents related to the shareholder/beneficiary (good standing, CV, certificate from the bank)
- The account opening process typically takes up to eight working days after registration, varying by bank and individual circumstances.
- The company owner must be present in person for the bank account opening.
Several major foreign banks operate in Hungary. Here are some of them:
- OTP Bank: OTP Bank was established in 1949 and has the largest branch presence in Hungary.
- K&H Bank: K&H Bank is part of KBC Group (Belgium).
- Erste Bank
- UniCredit Bank
- Raiffeisen Bank
- Deutsche Bank
Major Local Banks
Several major local banks operate in Hungary. Here are some of them:
- Budapest Bank
- CIB Bank
- MKB Bank
- FHB Bank
Cash: Cash is still the most popular payment method in Hungary.
Credit and Debit Cards: Credit and debit cards are widely used for online and in-person transactions.
Bank Transfers: Bank transfers are also commonly used for B2C transactions.
E-Wallets: E-wallets, such as PayPal, are gaining popularity in Hungary.
Mobile Payments: Mobile payment providers, like Mobiano, are also popular for B2C transactions.
Stripe: Stripe is a comprehensive payment infrastructure for the internet that is available in Hungary.