Ever tried to open a bank account in Hungary?
You walk into a bank branch in Budapest. After talking with 7 employees in broken Hungarian, you find an employee that speaks functional English… his name might be Zoltán.
You tell Zoltán, your new Hungarian banker, “I want to apply for a basic savings account with the lowest possible fees.”
Zoltán: “Great, I’ll help you fill out your application right now”
You: “Thank you!”
You let out a big, fat sigh of relief. After all, you achieved the impossible: it only took you 46 minutes to find an English-speaking banker.
You’re confident. You feel like you just conquered the Hungarian banking sector.
Zoltán zips through the application at the speed of light, fills everything out in Hungarian for you, checks your documents. And then you sign on the dotted line.
Then, Zoltán informs you: “I opened a Premium account for you instead– but don’t worry, it’s FREE for the first three months!”
Five days later, you discover that the Premium account Zoltán opened for you, wasn’t free at all. And in 30 days, you’ll have a negative balance and start bleeding fees if you don’t deposit $15,000…
You storm back to the branch fuming mad. You demand they close the account immediately and open the basic savings account that you originally requested.
Zoltán is nowhere to be found. In broken English, the branch manager tells you with a smirk, “This branch no longer deals with Premium accounts. You need to find another branch to do that.”
And then it hit you– you just experienced your first Hungarian banking hustle.
Don’t worry… it doesn’t have to be this way. In fact, opening a bank account in Hungary without the hustle is entirely possible. And in today’s article, we’re going to show you how.
But first, if you’d like to get started opening accounts in Hungary as a non-resident then don’t forget to download our FREE Non-Resident Banking Starter Guide right now!
Hungary is a landlocked, post-Soviet country in Central Europe. It was “Stalinized” from 1949 to 1989.
Then, Hungary joined the EU in 2004…
Known for paprika, chess champions, and the Rubik’s Cube (yes, it was literally invented here), Hungary is not a place that most people think of for banking.
But there are banking opportunities here… if you know where to look and how to avoid getting duped
Today, over 150,000 expats and foreigners live in Hungary making up 2% of the total population.
And among other things, Budapest is also dirt cheap. It’s now a popular haven for digital nomads, freelancers, and online business owners in Europe.
After a slew of changes to legislation and tax code, Hungary now has one of the lowest corporate tax rates in Europe, at 9% (Granted, VAT rates are among the highest at 27%).
Translation? Depending on where you’re from and how you’re structured, Hungary is sometimes used as a hybrid “pass-through” jurisdiction, connecting offshore and onshore businesses.
Heck, even Gawker (aka: the now-defunct media company bankrupted as a result of the Hulk Hogan lawsuit) had a subsidiary here. But, that’s for another day.
At times, banking in Hungary can be painfully bureaucratic. And, it’s difficult to find competent bankers that speak English.
But, there are still some interesting opportunities for non-residents, companies, and international businesses.
Here are some reasons why people and companies want to open bank accounts in Hungary:
While Hungarian banks aren’t exactly the pinnacle of banking efficiency, having a bank account in Hungary is useful.
Like banking in Poland, having a Hungary bank account gives you an EU bank account. And that gives you access to the EU banking system. SEPA transfers. €100,000 in deposit guarantee. And many other benefits.
Unlike many places today, it’s possible to open a bank account in Hungary as a foreigner without having a local tax ID or residence permit.
In Hungary, like most places, account opening procedures and document requirements vary from bank to bank, branch to branch, and banker to banker. So, choosing the right combination and having the right information going in is critical.
Hungary is one of the few countries where it’s still possible to open bank accounts remotely. We go into more detail and show you how to do it in GlobalBanks Insider. (Oh, and don’t worry, we don’t sell remote opening services. We provide all the information and tools you need to do it yourself).
Since 2017, Hungary has had one of the lowest corporate tax rates in Europe. It’s not uncommon for Europeans with small online businesses operating in high-tax EU countries (France, Germany, Italy, Spain, etc) to move here.
They pop up a Hungarian company (a “Kft”) and restructure their business out of Hungary. After setting up a Hungarian company or branch, many will apply for a business bank account in Hungary, which is also possible for foreign non-residents.
Budapest is cheap, has consistent wifi, and offers a European lifestyle at a fraction of the costs you’ll find in other EU countries. So it’s no surprise that many digital nomads, freelancers, and remote business owners flock here.
If you can work remotely, why wouldn’t you base yourself in a crazy affordable city like Budapest? And in terms of banking, many digital nomads will open a bank account in Hungary to pay local expenses and access local services.
Look, EMIs and fintechs are great for small purchases. Transferwise, Revolut, N26 cards are convenient. Who doesn’t love killer exchange rates and cool metal cards?
But there’s a dirty little secret that no one likes to talk about…
Digital transfer services, EMIs, and other online “banks” don’t always work. And it’s common for them to get declined for large purchases, even if you have tons of cash in your account.
On a date? At a fancy hotel? Expensive business dinner and picking up the bill? If you whip out your fintech card and get declined, that won’t go over well.
While some people can survive on fintech cards, they’re not realistic for high spenders, large transactions, and entrepreneurs with growing businesses.
So many will open a bank account in Hungary as a backup option. This is important if you’re coming from a country with limited banking options and don’t have foreign credit cards.
Foreign companies who have tried (and failed) to open bank accounts in other countries, can sometimes open a bank account in Hungary.
Obviously, opening a bank account in Hungary for a foreign company isn’t easy and it’s not an option for everyone.
If you have limited banking options and are struggling to open accounts, opening a bank account in Hungary could be an option for you.
It’s a fact. People involved in the cryptocurrency have fiat banking problems. Their bank accounts are flagged, frozen, and terminated faster and more often than their peers.
For anyone involved in crypto or blockchain-related business, have crypto as the source of wealth, or who simply have transactions that involve cryptocurrency, it’s just practical to have a backup banking option like those available in Hungary.
Some banks allow foreign non-residents to open a bank account with just a passport and a few supporting documents. It just depends on the bank.
For example, MOST banks in Hungary want to see a valid residence permit or work visa and proof of your local Hungarian address.
But there are exceptions. If you have the right information, know which banks and branches to target, and who to contact. Then you might only need a passport, proof of address, and proof of income.
Hungarian banking has some unique complexities.
What would you expect from the country that invented the Rubix Cube, right?
Finding the right bank, then finding a branch that will actually accept you (and has an English speaker) can be a long, tedious process. There’s a lot of trial and error.
Add to that, an extreme bureaucratic mindset, weird rules, language barriers, and administrative inefficiency– things can get complicated. Fast.
Here are a few examples of Hungarian banking challenges
Which documents are really required for that branch? Confirming the bank’s document requirements, making sure you have all of those documents, and getting all those documents translated into Hungarian by a certified translator is a long process.
Some banks have a longer application process and require more documents than others. Some will want several types of local documents. And, some might even demand that all foreign documents are translated into Hungarian by a certified translator.
Many bank employees do not speak English. Some banks don’t have English online banking. Other banks might have a few bankers that speak English at the branch, but won’t offer any customer support in English AFTER the account is open. Choose carefully.
Wasting hours on the phone to resolve basic banking issues is not uncommon– even if you have a fancy “premium” account.
If the bank doesn’t have English-speaking customer support, you’ll waste even more time. Or worse, you’ll have to physically go into the branch every time you have an issue– something that’s normally done remotely.
Again, choosing the right bank and knowing what you’re getting into after the account is opened, matters.
Fortunately, if you’re a non-resident, foreigner, or business owner looking to open a bank account in Hungary or sort out your banking options, we can help.
If you want to know which specific banks will accept you, which account opening strategies to use, how to avoid high fees, and overcome tough paperwork requirements, then we’d be happy to help you on your journey.
If you’re ready to take action and start opening international accounts now, you can access GlobalBanks IQ, our dedicated international banking intelligence platform.
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