​The last First Monday of the year – jointly organised with HVCA – focused on one of the most relevant topics in the Hungarian startup scene today: constraints in the legal environment and flipping.

​Recent years’ Startup Report shows a clear trend: a third of startups have already flipped abroad, another third plans to do so, and for post–Series A companies this is almost universal. The pattern is broader than Hungary: across Europe, founders still often prefer UK/US legal systems because they align better with venture best practices and offer more straightforward paths for ESOPs and financing. This is also why we support initiatives like EU Inc, which aim to modernise and harmonise European structures.

​Because flipping later can be costly and complex, many startups start with an international holdco structure right away. However, we acknowledge that for some it might be too risky, costly, or even unnecessary if their vision is more local or regional rather than global.

​To support the ecosystem, we introduced our new Legal Library, created with partner law firms such as Szecskay, White Summers, Jalsovszky, Csővári Legal, PV Partners and more – a set of model documents (term sheets, ESOPs, founders’ agreements, CLAs) designed to adapt international best practices to the local legal environment and make early legal work more accessible and less of a burden.

​The session kicked off with a talk from István Csővári:

​Flipping without flopping: tax traps and optimization in cross-border startup reorganizations – A practical overview of what founders should consider when moving a company abroad, from common tax pitfalls to where smart structuring can make future rounds, ESOPs, or exits smoother.

​After the talk, a panel of lawyers, operators, and investors compared the practical pros and cons of a Hungarian entity vs. a foreign holdco and share real-world experiences.

​We want to help make the flipping process easier for teams that choose that path, and make it easier to adopt international best practices for those that choose to operate under the local jurisdiction – although SH believes that thinking globally from the start and beginning with a foreign holdco is often the more straightforward route.

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