Registered office servicelawfully from July 1?

From July 1, 2017, rules on registered office services will be tightened.
 
Several companies register virtual offices at the company court of registration which means that the company does not actually operate at that place but postal deliveries are taken over by this service provider. Multinational enterprises often choose to establish daughter companies for taxation or any other practical purposes whose registered offices are provided by special seat service providers. Many smaller firms use their accountant’s office for this reason.
 
From July 1, 2017, seat service can be provided only in a real property which is either owned by the service provider or at least its right to use is registered in the land-registry.
 
The "right to use" indicated in the decree is still unclear to law enforcers for the time being (we have analysed this concept in one of our previous blog entries) so it is likely to be solved by practice.
 
It is important to note that it will remain mandatory to report to the tax authority the use of a registered office service.
 
Former contracts on seat service will have to be amended by the end of August, 2017 according to the new expectations. Oral agreements must be put in writing. Former agreements must be terminated by August 31, 2017 if the parties have not been able to reach an agreement in accordance with the new requirements by the deadline.
 
A seat provider has to fulfil many obligations continuously such as the placement of the sign board of the company on the building, separated management of the records and up-to-date document register and also to notify the principal within one working-day of any new postal delivery. It is worth choosing a professional service provider who is able to meet these requirements continuously and flexibly.
 
If you need a registered office service or you wish to change your current operator, please contact Ecovis Hungary Legal specialists for more personalized information.