KFT vs. SRL: A Comprehensive Comparison Between Hungarian and Italian Companies (2026)
Are you considering whether to open a KFT in Hungary or maintain (or establish) an SRL in Italy? This guide offers a direct and updated comparison for 2026 on all relevant aspects: taxation, costs, timelines, compliance, and operational advantages.
The choice between a KFT and an SRL is not just about taxes — it depends on your personal situation, type of activity, and medium-to-long-term goals.
KFT and SRL: What they are
The KFT (Korlátolt Felelősségű Társaság) is the Hungarian limited liability company, the most common legal form in Hungary for SMEs and professionals. The SRL (Società a Responsabilità Limitata) is its Italian equivalent. Both offer limited liability up to the contributed capital and are subject to corporate profit taxation, but with substantial differences in rates, costs, and procedures.
Tax Comparison: Corporate Tax and Dividends
| Tax Item | KFT Hungary | SRL Italy |
|---|---|---|
| Corporate Tax | 9% | 24% IRES |
| IRAP / Local Equivalent | Not applicable | 3.9% |
| Dividend Taxation | 15% withholding | 26% withholding |
| Administrator Contributions | ~18.5% | 25-33% INPS |
| Standard VAT | 27% | 22% |
| Estimated Total Tax Burden | 20-25% | 45-55% |
Learn more in our dedicated guide to the 9% Hungarian flat tax.
Formation Costs Comparison
| Item | KFT Hungary | SRL Italy |
|---|---|---|
| Minimum Capital | ~7,500 EUR | 1 EUR (simplified SRL) |
| Notary/Lawyer Fees | 500-1,000 EUR | 1,500-3,000 EUR |
| Registration Fees | ~100 EUR | ~500-800 EUR |
| Consulting and Setup | 1,000-2,000 EUR | 500-1,500 EUR |
| Estimated Total | 9,000-11,000 EUR | 2,500-5,500 EUR |
Note: KFT capital is refundable to shareholders. The actual formation cost (excluding capital) is comparable to an Italian SRL.
Formation Timelines
| Phase | KFT Hungary | SRL Italy |
|---|---|---|
| Drafting of Articles of Association | 1-3 days | 1-2 weeks |
| Registration | 1-5 working days | 2-4 weeks |
| Tax Code / VAT Number | Automatic upon registration | Immediate (Agenzia Entrate) |
| Operational Bank Account | 1-2 weeks | 1-2 weeks |
| Total Process | 3-6 weeks | 4-8 weeks |
Compliance and Administrative Obligations
| Obligation | KFT Hungary | SRL Italy |
|---|---|---|
| Mandatory Accounting | Yes (Hungarian accounting) | Yes (Italian accounting) |
| Tax Return | Annual (NAV) | Annual (Agenzia Entrate) |
| Periodic VAT | Monthly or quarterly | Monthly or quarterly |
| Shareholders' Register | Yes | Yes |
| Annual General Meeting | Yes | Yes |
| Annual Accounting Costs | 1,500-3,000 EUR | 3,000-8,000 EUR |
Operations and Daily Management
From an operational perspective, the main differences are:
- Language: KFT documentation is in Hungarian — a local accountant or a partner like Elevate Advisory is necessary
- Bank: Mandatory Hungarian bank account (see our guide on bank accounts for KFTs)
- Invoicing: Mandatory Hungarian electronic invoicing system (NAV Online Számla)
- Registered Office: Mandatory physical address in Hungary (domiciliation available)
When a Hungarian KFT is advantageous
A KFT is the optimal choice if:
- You have annual profits exceeding 30,000-50,000 EUR — tax savings outweigh management costs
- You are willing to transfer your tax residency to Hungary or already have ties to the country
- Your business is digital or international and does not require a physical presence in Italy
- You want to expand into the Eastern European market
- You are looking for reduced operating costs and streamlined bureaucratic procedures
When an Italian SRL is advantageous
An SRL remains the best choice if:
- Your business is deeply rooted in Italy (clients, suppliers, employees)
- You cannot or do not want to transfer your tax residency abroad
- Your turnover is below 30,000 EUR — the Italian flat-rate regime might be more convenient
- You need access to Italian bank credit (mortgages, loans)
- You operate in sectors regulated in Italy (professional bodies, public contracts)
Practical Example: Real KFT vs. SRL Savings
Scenario: Entrepreneur with corporate profit of 80,000 EUR/year, tax resident in the company's country.
| Item | KFT Hungary | SRL Italy |
|---|---|---|
| Gross Profit | 80,000 EUR | 80,000 EUR |
| Corporate Tax | 7,200 EUR (9%) | 19,200 EUR (24%) |
| Net Profit | 72,800 EUR | 60,800 EUR |
| Dividend Taxation | 10,920 EUR (15%) | 15,808 EUR (26%) |
| Net in Pocket | 61,880 EUR | 44,992 EUR |
| Annual Savings: +16,888 EUR | ||
Simplified calculation. Does not include social security contributions and other specific charges.
KFT vs. SRL Frequently Asked Questions
Can I have both a Hungarian KFT and an Italian SRL?
Yes, it is legally possible. However, it is crucial to properly structure the relationships between the two companies to avoid transfer pricing issues and CFC rules. We always recommend specialized advice.
Can a KFT invoice Italian clients?
Yes, without restrictions. A KFT is an EU company and can issue invoices to any European client. Italian clients receive an invoice with Hungarian VAT (or under reverse charge for B2B intra-EU operations).
Do I have to close my Italian SRL if I open a KFT?
Not necessarily. It depends on the structure you want to adopt. Many entrepreneurs maintain both companies with distinct roles. Planning is essential to avoid double taxation.
Is a KFT recognized by Italian banks?
Yes, like any other EU company. However, access to Italian bank credit for a Hungarian KFT can be more complex than for an Italian SRL.
Conclusion: KFT or SRL?
For an Italian entrepreneur with profits exceeding 50,000 EUR/year, who is willing to properly structure their tax position, a Hungarian KFT offers a significant and legal tax advantage. For those deeply rooted in Italy or with lower profits, an SRL remains the more practical choice.
Contact us for a free personalized assessment. We analyze your specific situation and advise you on the most advantageous structure. Or learn more by reading our guide on how to open a KFT in Hungary.
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