Hungary for Investors

Hungary for Investors

Over the past 20 years, notwithstanding some setbacks, Hungary has increasingly developed legal structures and tax structures that provide the requisite measure of legal certainty to foreign investors and companies, permitting them to establish business operations in Hungary with confidence, while actively participating in and contributing to prospering economic development.
Anyone taking a closer look at Hungary is assured of finding an attractive, entrepreneurial basis, well-trained employees who are willing to learn and increasing legal certainty, which provides the confidence needed for long-term planning.

Free Enterprise Zones 

From 2013, the state is hoping to boost the economy of 47 regions, of agrarian and industrial complexin these largely disadvantaged areas with significant unemployment, in order for them to carry out as many new manufacturing investments as possible and to increase the level of employment. Such incentives include the following:

  • for investments of at least HUF 100 million (approx. EUR 350,000), businesses are entitled to a 80% tax incentive for five years after putting the project into operation;
  • for new hires, employers are required to pay only a part of employers’ public contributions (amounting to 28.5% of the gross salary);
  • in addition to numerous other types of subsidies, employers are eligible for a subsidy of HUF 400,000 (approx. EUR 1,350) for each new employee hired

Industrial parks have existed in Hungary for over ten years and have become an integral component of the country’s economic processes. There are 210 industrial parks in Hungary, hosting some 4,200 companies, which employ over 200,000 people. These companies account for 30% of industrial output, making their economic and infrastructural stability and expansion a cornerstone of the development of Hungarian industry. An industrial park portal was launched on 1 January 2013, providing information in English and Hungarian on, among other things, the features of the industrial parks, their results and the services offered:

 Spin-Offs and Start-up Businesses 

The establishment of technology- and knowledge-intensive start-up businesses has become increasingly more significant in Hungary since the start of the twenty-first century. More and more researchers and students at universities and research institutions began working on the practical implementation of some aspect of their research area and on bringing that to market. Since the mid-2000s, several large tender announcements have been issued, each providing up to EUR 5 to 10 million in support for joint research projects involving universities and industry. Smaller tenders, providing under EUR 1 million in resources for supporting research, development and innovation, have also become regular. With the launch of the Jeremie program, a total of EUR 300 million was invested and is being invested by venture capital investors in spin-off and start-up businesses promising growth.

In the middle of March 2014, Hungary submitted the partnership agreement representing the framework for the use of EU funds to arrive between 2014 and 2020 to the European Commission, and it is expected that from the autumn the publication of tenders may start with regard to funds allocated to 2014-2020. In the new EU funding programming period Hungary may use HUF 7,480 billion from the structural funds and cohesion funds, including domestic co-financing.

The allocated amounts of the seven Operative Programs are as follows:

  1. Economic Development and Innovation (GINOP): HUF 2,720 billion
  2. Regional and Settlement Development (TOP): HUF 1,160 billion
  3. Integrated Transportation Development (KOP): HUF 1,034 billion
  4. Environmental and Energetics Efficiency ( KEHOP): HUF 1,120 billion
  5. Human Resources Development (EFOP): HUF 885 billion
  6. Public Administration and Public Services Development (KÖFOP): HUF 300 billion
  7. Competitive Central Hungary (VEKOP): HUF 270 billion

A minimum of 15 percent of the total financial allocation will serve to bolster small and medium enterprises. Fifteen percent of the total funds will go to creation of jobs, which is one and a half times as much as between 2007 and 2013. Eleven percent of the total allocation will go to research and development, three times as much as in the previous EU funding programming period. Nine percent of the allocation will go towards energy efficiency, which is twice as much as previously, and about 4 percent of the total funds, likewise double the previous amount, will go directly to development of the info communication sector.

It is a significant change that HUF 736 billion, almost 10 percent of the total allocation, will be made available through financial means.

Our colleagues are ready to help you. Please, ask for assistance at following e-mail addresses:
— English and Hungarian languages: dios@orosz-piac.com
— Russian language: infojet62@gmail.com

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