Doing Business in Hungary – Investment and Trade
Throughout the world, Hungary is known for her extensive list of Nobel Prize laureates, Rubik’s Cube (also known as the Magic Cube) or her delicious cuisine and wines. No wonder we are proud, when seeing you write with a ballpoint pen (invented by László Bíró in 1931), taking your Vitamin C pills (Albert Szent-Györgyi, 1932), or lighting a candle with a safety match (János Irinyi, 1836). These are just a few examples that Hungary has proved her talent for centuries, and Hungarians do magical things today as well. Introducing our revolutionary thinking, great inventions, and acknowledged results is a great pleasure and a strong commitment of ours.
However, we are also proud of present times not only our past. Due to the efforts and developments of the last decade, the economic growth in Hungary stepped into a balanced stage and it is on a sustainable growth path (2021 Q3 – 6,1% vs 3,9% EU average). The vulnerability of the country decreased dramatically since 2010, and based on the disciplined fiscal policy, the sustainably low budget deficit, decreasing debt ration, phasing out of FX loans as well as many other accomplishments, all three major credit rating agencies upgraded Hungarian government bonds to investment grade. Besides the flat personal income tax rate being 15%, Hungary also introduced a flat tax in corporate income tax rate at 9% thus making Hungary the second most competitive country in terms of taxes on corporate turnover among OECD countries, trailing only top-ranked Switzerland. All the above enabled the Hungarian economy and business environment to be among the most resilient ones during the COVID-pandemic.
Multinational companies and startups alike tend to establish their businesses in Budapest and Hungary, among many other reasons due to the excellent quality and quantity of talent pool, the country’s central location in the European Union accessing a market of 450 million people. Over the last 25 years numerous international companies have based their manufacturing or service operations, as well as research and development centres in Hungary.
Bilateral business relations are flourishing, 1700 US-owned companies have established a presence in our country employing more than 106,000 employees. These businesses benefit from the advantageous location, the safe legal environment, the highly skilled workforce, and the advanced business infrastructure. Since 2015, the Hungarian Government has assisted 88 US companies in various investment and re-investment projects with an overall FDI value of USD 1.4 billion. As of 2021, the Hungarian Government has signed strategic cooperation agreements with 14 US companies. Proving the resilience of our business relations, during the pandemic 22 US companies initiated FDI projects supported by the Hungarian Government in the fields of technology, manufacturing, as well as the food industry. US businesses such as BlackRock, IBM, Thermo Fisher, Diligent, ExxonMobil, IFF, Ford, Emerson, Cloudera, Flowserve, CooperVision, as well as General Electric, Citibank, Morgan Stanley, Coca Cola, and Becton Dickinson all utilize the unique talent pool, the favourable business environment as well as the support from the Government to grow bigger in headcount and introduce new, higher value added workflows.
Invest in Hungary
Following the European Union, the United States is the second largest export market for Hungarian companies. Between 2010-2020 bilateral trade grew altogether with 68%. In 2020 Hungary's exports to America reached USD 3.6 billions, increasing 86% in a decade.
The Hungarian Investment Promotion Agency – HIPA and the Hungarian Export Promotion Agency offer high quality professional services for investors and exporters supporting the Government’s investment promotion targets and fostering bilateral international trade relations.
HIPA seeks and maintains contacts with potential foreign investors, helping them to prepare and implement strategic investment decisions, providing applicable incentive packages, as well as post-decision support and encouraging their intention to re-invest. HIPA also offers company and sector-specific consultancy, recommends locations, and organises site visits. Furthermore, the Investment Promotion Agency acts as a mediator between large international companies and Hungarian firms to facilitate supplier relationships, organising supplier training, and maintaining active contact with trade associations, particularly in the automotive and electronics sectors. Meanwhile, the main goal of the Export Promotion Agency is to support Hungarian enterprises, which are capable of exporting goods and services and find adequate international business partners for them.