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High number of offshore companies in real estate sector

The number of offshore companies in Hungary has halved in seven years, but this does not mean that concealment and tax optimization have been reduced, says azenpenzem.hu. 

It is notable that 36% of the offshore companies operating here are real estate firms.

The increase in the number of firms affiliated with exotic countries was most spectacular between 2005 and 2009, according to Opten’s analysis, when the number of firms seeking to enter tax havens tripled in a few years. The tax authorities, legislators and business partners have also noticed this phenomenon.

Thus, after a few years of stagnation, this type of tax optimization and hiding practice began to decline. Opten says it is important to emphasize that offshore ownership alone does not constitute illegal activity.

According to the company information provider, there are currently about 3,300 companies in Hungary, among which the direct owners include companies registered in offshore countries. By examining indirect, published ownership, more than 5,000 domestic enterprises can be identified with such an owner.

According to Opten, 36% of offshore companies operating in the country have real estate business as their main activity. In addition to real estate, there are many offshore trading and consulting companies.