1. business and industrial
2. manufacturing

INVESTING
GUIDE HUNGARY
2013
Why invest
in Hungary?
A useful guide for foreign investors with
up-to-date information and inspiring
success stories from around the country.
IGH03
CONTENTS
1.0
03 WHAT SHOULD YOU KNOW ABOUT HUNGARY?
03 Location and climate
04 Infrastructure in Hungary
09 Main industries
10 Mercedes in Kecskemét: World class cars made in Hungary
12 Audi in Győr: Good for Audi, good for Hungary
15 Interview with Bridgestone factory chief executive Karato Kenji
16 Interview with László Ábrahám, general manager of the Hungarian unit of
National Instruments
18 Interview with Csaba Vecsernyés, factory head of Becton Dickinson in Hungary
2.0
23 WHY INVEST IN HUNGARY?
25 Cash subsidies
26 Innovation centers in Hungary
28 Shared Service Centers in Hungary
31 Vocational education in Hungary
32 Tax incentives
3.0
4.0
5.0
35 HOW DOES ONE INVEST IN
35 Establishing your business
39 Hiring and employment
44 Key tax related issues
HUNGARY?
47 ABOUT THE HUNGARIAN INVESTMENT AND
47 Interview with HITA president Erzsébet Dobos
50 WHY
TRADE AGENCY (HITA)
CHOOSE PWC?
Published by PricewaterhouseCoopers Hungary Ltd. in cooperation with Hungarian Investment and Trade Agency
PUBLISHING DIRECTOR: Viktor Bálint, Marketing & Communications Director, PwC
Tel.: +36 1 461 9100 (PwC in Budapest) • E-mail: [email protected] • EDITOR: Patricia Fischer • ART DIRECTOR: Tamás Tárczy
PUBLISHER: Absolut Media Zrt.
01: WHAT SHOULD YOU KNOW ABOUT HUNGARY
PARTNER LETTER
ealizing growth aspirations
brings a number of
challenges in today’s
economy both in Hungary
and worldwide. To
navigate through this environment
companies still tend to rely upon
implementing cost-cutting measures
and strengthening their positions at
home. The importance of investments,
however, hasn’t shrunk a bit. Expanding
business operations cross-border
and exploring new markets still have
R
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Investing Guide Hungary 2013
enormous potential for growth.
Despite all difficulties, there are great
opportunities ahead for foreign investors
in Hungary. This is also backed by
recent news of impressive investments
which may give us a break from the
gloomy outlook caused by last year’s
rather unfavourable regulation changes.
We’ve also seen examples of strategic
alliances built between the government
and a number of multinational
companies which set a more positive
tone for future cooperation.
This is the third year PwC Hungary
and the Hungarian Investment and
Trade Agency (HITA) publish Investing
Guide Hungary. Year by year, our
publication offers guidance for
foreign investors and showcases
the biggest investment success
stories from around the country,
providing both useful information and
inspiration for businesses. Again, I
hope that our publication will provide
you with invaluable insight and a
reliable guidance.
1.0
WHAT SHOULD
YOU KNOW ABOUT
HUNGARY?
Kind regards,
Tamás Lőcsei
Service Line Leader
Tax Advisory Services
PwC Hungary
PHOTO: MAGYAR HÍRLAP
“
EXPANDING BUSINESS OPERATIONS
CROSS-BORDER AND
EXPLORING NEW
MARKETS STILL
HAVE ENORMOUS
POTENTIAL FOR
GROWTH.
“
LOCATION AND CLIMATE
ungary’s central location
makes it a favorite destination for foreign investors who
intend to expand their operations in Central and Eastern
Europe. The country’s telecommunications, transport and logistics infrastructure,
and the quality of education and life have
attracted large amounts of foreign investment to Hungary in recent years. The capital, Budapest, is the center of the country’s
economic activity; however, the main cities
are also gaining an increasing role.
H
The country’s favorable geographical
location places it at the crossroads of
main commercial routes. From Hungary, a market of some 250 million people
can be reached within 600 miles (about
1,000 kilometers).
EU accession in 2004 brought both
commercial and regulatory advantages. Becoming an EU Member state
brought a free trade system, the free
movement of goods, services and
labor, as well as capital.
In addition to all these advantages, another
of Hungary’s strengths is its well-qualified
labor force. Due to the high standards of
its education system, the country has a
highly skilled and talented workforce, with
professional foreign language skills and
relatively low wage requirements.
The country’s economy, mainly focused
on the manufacturing industry, was hit
hard by the economic crisis. The international situation became disadvantageous
and debt increased.
1.0 WHAT SHOULD YOU KNOW ABOUT HUNGARY
ECONOMIC DATA AND OUTLOOK1
INFRASTRUCTURE IN HUNGARY
General information
Location: East-Central Europe
Time zone: GMT+ 1 hour
Population: 9.96 million (2012)
Participation in international organizations: United Nations,
NATO, European Union, OECD, IMF, Visegrád Group, Organization for
Security and Cooperation in Europe (OSCE), Conseil Européen pour la
Recherche Nucléaire (CERN), Duna Committee, Schengen Agreement,
World Meteorological Organization, Bank for International Settlements,
International Atomic Energy Agency, Wassenaar Arrangement on Export
Controls for Conventional Arms and Dual-Use Goods and Technologies
Main industries: automotive, electronics, pharmaceuticals, ICT, food
Currency: HUF (forint)1
Economic data
Labor force: 4.2798 million (2011)
Employment: 3.8119 million (2011); 3.925 million (2012 Sept-Nov)
Unemployment rate: 10.9% (2011); 10.6% (2012 Sept-Nov)
Gross domestic product (mil USD, PPP): 195,500 (2011); 196,100
(2012 forecast)
Consumer Price Index: 3.9% (2011); 5.7% (2012)
FDI – Inward direct investment: USD 4.58 billion (2011); USD 3.85 billion
(2012 forecast)
Road transportation
Hungary has a central location in Europe,
at the crossroads of four main European
transportation corridors, including:
No. IV from northern Germany/North Sea
to the Black Sea;
No. V from the Adriatic ports to
Kiev-Moscow;
No. VII – the Danube River and RhineMain canal, from the North Sea; and
No. X the north-south corridor from the
Baltic states to Turkey and Greece.
The largest Hungarian cities – Debrecen,
Nyiregyhaza, Miskolc, Kecskemét, Szeged,
Pécs, Győr, and Székesfehérvár – are all
connected to the capital city, Budapest, by
motorways (motorway total: 1,099 km).
Hungary has one of the highest
motorway densities in all of Europe
and the third highest road density, after
Belgium and Holland. Highways reach the
borders of the country and the different
regions of Hungary. Neighboring countries
are, therefore, easy to access.
REGIONS OF HUNGARY
Sources: Economist Intelligence Unit, Hungarian Central Statistical Office,
European Commission, Ministry for National Economy, International Monetary Fund
1
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Investing Guide Hungary 2013
HIGHWAY SYSTEM OF HUNGARY
2
Exchange rate used: 290 HUF/EUR
SOURCE: HITA, 2013
SOURCE: HITA, 2013
1.0 WHAT SHOULD YOU KNOW ABOUT HUNGARY
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Investing Guide Hungary 2013
RAILWAY LINE MODERIZATION (MÁV)
SOURCE: MÁV, 2013
Railway transportation
ue to its central location,
Hungary has an extensive railway network.
Rail transport carries
more than 20% of total
freight, which is well above the EU
average.Several main train lines connect Hungary with the main ports of
Western Europe (e.g. Hamburg (D),
Bremerhaven (D), Rotterdam (NL))
and the Adriatic (Koper (Sl), Trieste
(I)) with regular services.
The total length of the Hungarian
D
railway system is 7,729 km, of which
double-track is 1,335 km (17.3%)
and the electrified railway network
is 2,628 km (34%). Záhony and its
region is the junction and reloading
center for European standard-gauge
railways and the wide-gauge system
of the CIS states. There is a direct
railway connection between China
and Záhony; the transfer takes approximately 19 to 22 days.
Air transportation
Hungary has a number of interna-
tional airports: Budapest Liszt Ferenc International Airport, Debrecen,
and Balaton – Sármellék. There are
also airports that cater for commercial and seasonal public flights in
Győr and Pécs.
Water transportation
Hungary has excellent waterway
connections, as the Danube crosses
through the whole country from
north to south. The Danube-RhineMain canal in Europe links the North
Sea and the Black Sea: several
THE TOTAL LENGTH
OF THE HUNGARIAN
RAILWAY SYSTEM IS
scheduled block train lines connect Hungary with the seaports of
Hamburg, Bremerhaven, Rotterdam,
and Antwerp (B) on the North Sea,
and with Koper and Trieste on the
Adriatic. The Adriatic seaports also
offer alternative shipping routes from
Asia. Lead times from these ports
are within 16-36 hours.
Industrial & logistics
market
Hungary’s geographical advantages
make it a popular logistics location. The
7,729
KM
country is already a strategic location for
many international distribution centers,
and offers many advantages for companies that wish to develop their logistics
centers here in the future.
Due to its infrastructure and central
position, large-volume development
activity and transactions are concentrated in the vicinity of Budapest. To date, more than 30 modern
logistics and warehouse parks of
approximately 1.3 million square
meters have been developed in a 30
kilometer radius around the capital,
primarily along the M0 ring road.
More than 200 industrial parks exist
for greenfield or brownfield investment opportunities countrywide.
Logistics activities are the most often outsourced services in Hungary
and the sector accounts for up to
5-6% of Hungary’s GDP.
Office market
There are currently around 3.2 million square meters of office space on
the Budapest office market, including
(EEA) NATIONALS
1.0 WHAT SHOULD YOU KNOW ABOUT HUNGARY
owner-occupied buildings. The volume
of modern owner-occupied buildings
– properties built or renovated after
1989, excluding government-owned
buildings – is estimated at 550,000
square meters. Modern office space
built as speculative investments in
Budapest comes to about 2.6 million
square meters. The majority of this
(75%) is Class A quality.
The Hungarian office market is focused predominantly on the capital,
although some modern office space
has also been built in the biggest
regional cities.
The overall vacancy rate on the market of leased offices was about 25%
at the end of 2010, which was the
highest this figure has ever reached.
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Investing Guide Hungary 2013
The vacancy rate did not change
significantly in 2011, and in the third
quarter of 2012 the vacancy rate for
offices built on speculative basis
came to 26%. (At the end of 2007
the all-Budapest vacancy rate was
around 12%.). New supply has been
limited; in 2012 only two office buildings were handed over.
The high vacancy rate and, of course,
current market conditions have resulted in decreasing rental levels in the
Budapest office market since the second half of 2008. Rents have probably
reached their lowest level and are not
expected to decrease further in the
new developments, but landlords in
older projects and secondary locations may be forced to offer even
more attractive rental packages.
AUTOMOTIVE PLAYERS IN HUNGARY
WHAT SHOULD YOU
KNOW ABOUT HUNGARY
MAIN
INDUSTRIES
AUTOMOTIVE
he automotive sector is one
of Hungary’s core industries
and generates almost 21% of
total exports. More than 600
companies employing a total of 100,000
people are active in the sector. Four
large automotive Original Equipment
Manufacturers (“OEMs”) have production
facilities in the country: Suzuki, Audi,
Opel, and Daimler. Serial production of
Mercedes-Benz cars began in March 2012
in Kecskemét. Audi has systematically
been expanding since 2008 to establish
the world’s second biggest engine plant
in Győr, and an R&D center, in addition to
car assembly. Due to the fact that some
large multinational companies have chosen
Hungary to locate their capital investments,
they have attracted a lot of equipment
manufacturers and other suppliers.
Small- and medium-sized local automotive
companies have also become stable and
strategic partners of both locally based and
Western European car manufacturers.
The Hungarian automotive sector’s
cooperation with the local education
system is strong and focuses on R&D.
Numerous multinationals have set up
R&D centers in Hungary, including Audi,
Bosch, Knorr-Bremse, Thyssen-Krupp,
Arvin Meritor, Denso, Continental,
Visteon, WET, Draxlmaier, Edag,
Temic Telefunken, and ZF.
SOURCE: HITA, 2013
1.0 WHAT SHOULD YOU KNOW ABOUT HUNGARY
WORLD CLASS
CARS MADE IN
HUNGARY
Hungary continues to be an attractive destination for automotive investments
and in 2012 welcomed the launch of a new Mercedes factory in Kecskemét.
With the stated aim of turning the central Hungarian town into one of the
biggest hubs of car production in the region, the company is already considering
expanding its output capacity at the site, hardly a year after production started.
he German firm picked a
greenfield site when it chose
Hungary’s eighth biggest
city as the venue of its new
base of production in Central
Europe, but is seeing the rewards for that
initiative, and is now looking to substantially increase’s the area’s role and make
it a recognized spot on the international
map. “We are well on our way to making
Kecskemét the center of car production in
Hungary,” Daimler AG’s chief executive Dr.
Dieter Zetsche said at an event introducing
a new Mercedes model in Kecskemét.
T
January saw the fi rst of Daimler’s
Mercedes-Benz CLA compact
executive four-door sedans roll off
the assembly line, a model that is
produced exclusively in Hungary. The
addition to the product line comes
after the Kecskemét plant rolled out
some 40,000 cars from its inauguration in March 2012, which contributed
to boosting the global output of the
Mercedes-Benz B-class compact
sports tourer by 11% compared to
2006, totaling 145,649 units.
Daimler, and automotive production
in general, enjoys the full support of
Hungary’s government, which has made
notable efforts to assure a comfortable
operating environment for the sector
and has vowed to keep the cooperation
going. “If we Hungarians are capable of
making a Mercedes, then we have nothing to fear,” Prime Minister Viktor Orbán
said at the CLA launch, highlighting the
work at Kecskemét as an encouraging
example to balance other economic
pressures weighing on the country.
Best of two cultures
Similarly, Daimler has also expressed
satisfaction with the cooperative attitude
of the Hungarian authorities, whether on
a national or a local level. “We experience
on a daily basis in both personal terms and
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Investing Guide Hungary 2013
was boosted to 25 once production
of the CLA model started in January.
Daimler has said it is very happy with
the available workforce, both in terms
of number and quality. The company currently provides jobs to 3,000
people, making a much-appreciated
“
The automaker prides itself in the fact that
it has also introduced a German education
model and provided specialized training
to college students who are candidates to
become employees once they complete
their studies. Daimler’s own records show
that there are now nearly 70 future special-
live up to the high quality demands that
anything released under the Mercedes
brand must live up to,” Zetsche said. The
government has also underlined its commitment to support industrial production
in Hungary by restructuring the country’s
education system to favor disciplines that
THE QUALIFICATIONS OF OUR COLLEAGUES IS A MAJOR FACTOR IN
ASSURING THAT THE CARS COMING OUT OF OUR KECSKEMÉT FACTORY
FULLY LIVE UP TO THE HIGH QUALITY DEMANDS THAT ANYTHING
RELEASED UNDER THE MERCEDES BRAND MUST LIVE UP TO
“
Mercedes-Benz Manufacturing Hungary chief executive Frank Klein, Prime Minister Viktor Orbán and Daimler AG chief
executive Dr. Dieter Zetsche (l.-r.) and the first Mercedes CLA manufactured in Kecskemét.
work in general that Hungarian and German mentalities complement one another
perfectly, so we can achieve ‘the best both
cultures have to offer’ in striving toward
mutual success,” Zetsche said. Indeed, the
company and the Hungarian government
signed a strategic cooperation agreement
in 2012 to underline their continued commitment to working together.
Daimler made the decision to expand its production capacities in the
compact car capacities in 2008, and
announced it had chosen Kecskemét
as the location of its new plant. The
initiative involved expanding its standing capacities in Rastatt in Germany
with a €600 million investment, while
spending another €800 million on
building the Hungarian facility, which
spans an area of nearly 441 hectares.
When it launched its Hungarian operations, Daimler cooperated with 17 local
component suppliers, a number that
contribution to the country’s labor
market where qualified workforce is
available in plenty, but new employers
are needed and always welcome.
ists participating in the program.
“The qualifications of our colleagues is
a major factor in assuring that the cars
coming out of our Kecskemét factory fully
allow high school graduates to achieve
the kind of degree that will help them find
employment with the likes of Mercedes
and other manufacturers.
1.0 WHAT SHOULD YOU KNOW ABOUT HUNGARY
“GOOD FOR AUDI,
GOOD FOR
HUNGARY”
Being one of Hungary’s biggest companies based on
revenue and headcount, German carmaker Audi remains
highly committed to its well-established operations in
Hungary and is in the final stages of unveiling a brand new
addition to its production site in Győr.
udi closed an exceptional
2012, with the Győr plant,
situated in northwestern Hungary near the Austrian border,
rolling out a record 1,915,567
engines, almost 30,000 more than the
year before, marking an all-time record.
While the number of fully assembled cars
produced was lower than in 2011, Győr
still produced 33,553 cars altogether from
components arriving from Germany as
well as from the extensive network of local
vendors operating in the area.
A
terms for the manufacturing industry,
Audi also enjoys central support like
its peer German vehicle makers active in the country.
“This record production is the result
of our consistent work to develop
products, which also contributes to
assuring our position as one of the
biggest engine manufacturers in the
world,” Audi Hungaria managing
director Thomas Faustmann said,
commenting the fi gures.
The government and Prime Minister Viktor Orbán have taken every
opportunity to express appreciation
for Audi’s activity and highlighted
that the company’s expansion at its
Győr base only goes to underline the
decades-long fruitful relationship
between Hungary and German businesses. Audi and the government has
just signed a strategic partnership
agreement in order to ensure the successful cooperation between the two
parties in the future.
As a prominent player of the automotive industry, which is one of the key
areas supported by the government
in its ambition to create favorable
According to government spokesman
András Giró-Szász, €5 billion arrived
in German capital since 2010, which
now provides 1.2 million jobs from the
likes of Audi and compatriot German
investors like Mercedes and Opel. Audi
employs around 9,000 people after
boosting headcount by 1,450 in 2012.
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Investing Guide Hungary 2013
“
AUDI WILL BE SHOULDERING SEVERAL BILLION
OUT OF THE TOTAL €6.6 BILLION PROJECT TO
UPGRADE THE GYŐR-PÉR AIRPORT
A final check before the brand new cars leave the factory
“
1.0 WHAT SHOULD YOU KNOW ABOUT HUNGARY
For its previous expansion, Audi was recognized by the government as investor
of the year in 2011, while it is in the final
stages of fully launching production in its
latest add-on in early 2013.
“What’s good for Audi is good for
Hungary,” state secretary in charge of
foreign trade relations Péter Szíjjártó
said upon the company announcing
that it would be involved in yet another
infrastructural investment.
Thomas Faustmann announced that
Audi will be shouldering several
billion out of the total €6.6 billion
project to upgrade the Győr-Pér
airport, located near Audi’s base. The
company has a decade-long partnership with the airport and chose to get
involved in the project since it already
accounts for most of its passengers
and also needs a modern travel hub
to make the best use of its employees’ time when having them travel
between Germany and Hungary.
The developments will make the GyőrPér site accessible to Boeing-737 and
Airbus 320 models as a result of widened taxiways and the runway and the
installation of a landing system.
Audi is also active in the Hungarian
education system and runs various
initiatives aimed at recruiting new talent. The efforts are aimed at multiple
age groups by programs such as the
Audi Technik Kreaktivity which was
organized for the fifth time in 2012
and is targeted at high schools students. Out of the 40 applications 12
teams reached the finals, who were
challenged to design a vehicle that is
not driven by an internal combustion
engine. The company’s internship
BRIDGESTONE
HUNGARY ON
THE ROLL
Q: WHAT COMPELLED BRIDGESTONE TO SET UP A NEW PRODUCTION BASE IN HUNGARY?
A: Bridgestone started its Hungarian
manufacturing activity in 2005. The
results and experiences that we have
achieved since are all very impressive. Our decision to invest in Hungary was based on good infrastructural potential, geographical location,
quality of workforce and favourable
business climate.
Q: DIDN’T THE RECESSION IN HUNGARY AND THE DIFFICULTIES IN GENERAL THAT THE INDUSTRIAL SECTOR
FACES ADVERSELY AFFECT YOU?
A: Of course, there were negative effects,
but these were present everywhere. Considering the Hungarian recession, even
though all market players felt and still feel
the negative consequences, I would not
say that we were ‘adversely’ affected as
we sell our products outside Hungary.
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Investing Guide Hungary 2013
program aimed at securing the continued availability of skilled workforce welcomed its 100th participant
in 2012 while Audi also launched a
program to promote gender equality
and hired 30 female workers last year
who completed a training program
designed specifi cally for women.
Q: HOW HAS YOUR COOPERATION BEEN WITH THE
HUNGARIAN GOVERNMENT?
A: It is an important aspect for us that the Hungarian Government expressed its aim to support the realization of the
Hungarian investment and as far as our experiences are
concerned in this respect they assist the execution of the
investment with all instruments possible. Our main goal is
to respect the deadlines and to realize the investment at
the highest quality. We hope that with receiving the high
importance status for our investment we will be able assist
the region’s and the country’s growth.
An important milestone of Audi Hungaria was the expansion of the engine
factory which will soon make a full
scale automobile production possible.
Due to an investment of €900 million
the new factory can be opened in June
this year, where there will be an annual
production capacity of 125,000 units.
The new A3 derivative will be manufactured in Győr, which will be an entirely
“made in Hungary” car. Thanks to the
investment, more than 2,100 additional
workplaces will be secured.
After nearly a decade of
production in Hungary,
Japanese tire maker
Bridgestone has established
itself as one of the biggest
and well-respected foreign
investors into Hungary’s thriving
automotive industry. Chief
executive director Karato Kenji
recounts the company’s efforts
of the past years and its high
ambitions for the future.
Q: WHAT IS YOUR IMPRESSION OF
THE ENVIRONMENT IN HUNGARY?
A: The most important factor for us
is the availability of qualified people.
At present we employ more than 400
colleagues and we are planning to hire
500 more in the upcoming 5 years. Our
experiences show that the Hungarian
workforce’s educational level, expertise
and motivation are really good. Salary
competitiveness is also an important
factor compared to other countries in
Q: HAVE YOU EXPERIENCED ANY CULTURAL DIFFERENCES BETWEEN HUNGARY AND JAPAN THAT SURPRISED YOU?
A: I see many similarities and differences between the two
cultures and two nations. Out from the former, I would
choose cooperation for a common goal as an important
similarity. The Hungarian workforce’s motivational level and
professional attitude reminds me of our Japanese colleagues. This really helps in reaching our corporate goals
and future successes.
Out from the latter, I would say that pessimism is a difference.
In many cases I feel that Hungarians are pessimistic about their
present and future and they cannot appreciate the successes
and achievements that they should be proud of.
Karato Kenji, CEO of Bridgestone Hungary
the region. As our aim is to further educate our workforce in
as many fields as possible we seriously invest in training our
new and old employees.
Another weighty factor is the quality of infrastructure and the
outstanding potential of the Tatabánya-Környe Industrial Park.
The third reason that I would like to point out is the stable and
staunch business relationship with our Hungarian suppliers which
is a serious achievement of the past years. We would like to widen
our business relationships and also our Hungarian supplier base.
All our plans are aiming towards reaching our business goals and
targets with a clear objective to align these with Bridgestone’s
core vision which states: “Serving societies with superior quality”.
Q: HUNGARY’S ECONOMY IS IN A RECESSION AND THE
OUTLOOKS ARE MUTED. DO YOU SEE THE ECONOMY
RECOVERING ANYTIME SOON?
A: The Hungarian economy’s short- and long-term performance rests mostly on how many new workplaces will be
created in the upcoming period. One can see that with the
arrival of new companies in the Tatabánya-Környe Industrial
Park the local environment and infrastructure significantly
developed. We are very pleased that in this process Bridgestone can serve as a leading partner. We hope that with
creating new jobs, realizing our investment and reaching our
goals we will be able to assist to the regions and the countries growth in the upcoming time period.
Q: IF A POTENTIAL INVESTOR ASKED FOR YOUR ADVICE ABOUT INVESTING IN HUNGARY, WOULD YOU
RECOMMEND THE COUNTRY AS A DESTINATION?
A: Absolutely. I believe that the results and successes that
were achieved by Bridgestone Hungary since its initial investment can serve as a prime example for many Japanese and
other foreign companies that our business decision to come to
Hungary was well grounded and it was meant to the long-term.
1.0 WHAT SHOULD YOU KNOW ABOUT HUNGARY
ELECTRONICS
The electronics industry is one of the
largest industrial sectors in Hungary,
accounting for 22% of total Hungarian manufacturing production. The
country is the largest electronics
producer in the CEE region, provid-
ing 26% of total regional production.
Around 112,000 people are employed in the sector. In addition to
several prestigious OEMs, six out
of the top 10 Electronic Manufacturing Services (“EMS”) providers
in Europe are present in Hungary
(Jabil, Flextronics, Foxconn, Sanmina, Zollner and Videoton). Some
of the companies, such as National
Instruments and Jabil, also conduct
R&D activities.
MAJOR ELECTRONICS MANUFACTURING COMPANIES IN HUNGARY
SOURCE: HITA, 2013
National Instruments, based in Austin, Texas,
provides ready-for-use software and modular
cost-effective hardware to customers around
the world.
IN
STRONG
POSITION
IGH19
Investing Guide Hungary 2013
T
he company opened its first
overseas factory in Debrecen, Hungary in 2001. Today,
the factory has more than
1,000 employees and more than 90%
of the company’s total production of
hardware happens here. We talked to
László Ábrahám, general manager of the
Hungarian unit.
Q: WHILE MANY FACTORIES IN
HUNGARY HAVE SUFFERED DUR-
ING THE CRISIS, NI IN DEBRECEN
HAS BEEN ABLE TO CONTINUOUSLY
INCREASE SALES AND REVENUES.
WHAT MAKES YOU DIFFERENT
FROM OTHER HUNGARIAN MANUFACTURING COMPANIES?
A: Our status is special as our market
position is very strong: our direct sales
network covers more than 40 countries
around the world. Beside our direct sales
offices we can reach all of our customers
through our connected sales and distribution partners. Most of the products
manufactured in the Hungarian factory go
to export markets, and I can proudly announce that our products are very popular
and the demand is continuously increasing. Regarding the geographical distribution of sales, it is roughly 30% among the
three main continents North America,
Europe and Asia.
In 2011, our revenue reached HUF 127
billion. That makes us the 57th biggest
company in Hungary by revenue. For 2012,
we expect better results, based on our
interim reports.
Q: WHAT ARE THE COMPANY’S
MAIN GOALS FOR 2013?
A: Our factory here in Hungary is working
at full capacity, so output expansion goals
would be out of question. However, last
year we opened a new factory in Malaysia,
so our main task is to transfer knowledge
and technology to this new facility. Our
qualified employees’ hard work and strong
commitment to the company has helped
us in creating a Center of Excellence in
Hungary by setting a very good example to all members of the NI family. This
Malaysian opening is also a challenge in
that we are focusing on the new installations while in the meantime remodeling
our manufacturing processes. We have
more than 35,000 customers around the
globe, but recently we made agreements
with some bigger partners, who need
NI’s capacity for a specific time period. To
fulfill these requirements, we have to make
some changes and implement some new
WE MANUFACTURE MORE THAN 2,500 TYPES
OF INSTRUMENTS AND DEVICES WITH A WORKFORCE OF MORE THAN 1,000 EMPLOYEES.
methods, for example a contract manufacturer’s scheme. Our business world
is developing in this direction, so we are
going ahead on this path.
It is equally important to us that an agreement has recently been signed with the
Hungarian government, which gives
National Instruments with strategic partner
status. In addition, we won a grant from
the European Union for the construction of
a new Science Park. This 6,000 sqm building will be home for laboratory, experimental and educational activities.
the-art industrial computers, measurement
units and many utilities used in education.
Our customers come from all over the
globe, and from several industrial fields.
No industry comprises more than 15% of
our revenue. Our products are almost everywhere from the Beijing Olympic Stadium’s structural health monitoring solutions
through the control system of a medical
robot used for treating brain tumors, to the
LEGO Mindstorms robot brain, which was
developed by NI engineers and made for
creative minds everywhere on the planet.
Q: MOST READERS FROM OUTSIDE
YOUR FIELD ARE PROBABLY NOT
VERY FAMILIAR WITH NI’S PRODUCTS. COULD YOU BE A LITTLE MORE
SPECIFIC ABOUT WHAT YOU DO?
A: Our product portfolio is very wide. We
manufacture more than 2,500 types of
instruments and devices with a workforce
of more than 1,000 employees. Amongst
many other things, we produce state-of-
Q: THE COMPANY, AND YOU PERSONALLY, HAVE RECEIVED MANY
AWARDS OVER THE YEARS. IT IS
WIDELY KNOWN THAT NI CONTRIBUTES A LOT TO THE CITY
OF DEBRECEN IN THE FIELD OF
EDUCATIONAL ACTIVITIES, AMONG
OTHER THINGS. HOWEVER, YOU
HAVE MADE SOME RECOMMENDATIONS ON THE QUALITY OF HUNGARIAN EDUCATION, ESPECIALLY
THE EDUCATION OF ENGINEERS.
A: Indeed, the standards of Hungarian
education could be improved, just like
the motivation on both the side of the
educators, the students and the private
sector. Our company has a similar mentorship program too, where students can
spend, for example, four days at university and one day at work. This program
is a win-win situation for our company
and the student also. It is easier for us
to choose our next colleagues when we
already know them, and it is easier for
them to know what is required from them
and their likely tasks in the future, when
they see the ‘all in a day’s work’ mentality from point blank range.
László Ábrahám, general manager of the Hungarian unit of National Instruments
1.0 WHAT SHOULD YOU KNOW ABOUT HUNGARY
IGH21
Investing Guide Hungary 2013
PHARMACEUTICALS & MEDICAL TECHNOLOGY
Hungary’s pharmaceutical industry
with its century-long tradition is one
of the most efficient and successful
sectors of the Hungarian economy.
No wonder that Hungary has the
best track record in the region for
FDI in the pharmaceuticals sector.
With the most developed pharmaceutical and biotechnology sectors
in Central and Eastern Europe,
Hungary provides an ideal base for
life science companies planning
further expansion in this region, or
towards the Balkan states, and the
more distant markets in Eastern
Europe and Asia.
Pharmaceutical exports reached
USD 3.93 billion in 2011. The sector
directly employs approximately
15,000 people. The majority of the
companies are located around four
life-sciences clusters: Budapest,
Debrecen, Szeged and Pécs.
MAJOR PHARMACEUTICAL
COMPANIES IN HUNGARY
MANUFACTURING COMPANIES
Richter Gedeon
EGIS (Servier)
TEVA
Sanofi
GlaxoSmithKline
COMPANIES WITH REGIONAL
DISTRIBUTION CENTERS
Pfizer
AstraZeneca
Mylan
COMPANIES WITH REPRESENTATIVE AND SALES OFFICES
Novartis
Eli Lilly
Bristol-Myers Squibb
MSD
Roche
Bayer
Merck
COMPETING
ON A GLOBAL
SCALE
HAT FACTORS
HELPED EXPANSION IN HUNGARY?
The establishment of the factory in the Tatabánya
Industrial Park was BD’s response
to the increase in global demand for
pre-filleable syringes. Because of
the strengthening of the sector, we
had to improve our capacities. The
project started in 2006 when, after a
survey assessing 13 countries, three
locations (two in Europe and one in
the Far East) were shortlisted. Of the
three, it was Hungary that we selected in 2007. We started a greenfi eld
investment in the following year and
took over the plant in the Tatabánya
Industrial Park in 2009.
W
In the past four years, we have
extended the factory continuously.
Although the recession has not
spared this industry, its impact was
far less noticeable than in the automotive sector. For all the diffi culties,
BD could grow. We hope that our
achievements help boost trust in the
fi rm for further investments.
Becton Dickinson, an
American medical
technology company,
opened its first factory
in Hungary in 2009. In
its choice of investment
location, BD showcases
well why many firms opt
for Hungary – excellent
location, highly skilled
workforce, low wages and
infrastructure are among
the main considerations.
The quality of the job done
is another reason why
the firm is contemplating
further expansion. Factory
head Csaba Vecsernyés
talks about results and
opportunities.
A: WHY DID BD CHOOSE HUNGARY
IN PARTICULAR?
Q: The country’s geographic position,
and its closeness to our main European
clients, was an important factor. The availability of an adequate workforce and the
stable political and economic environment were also among the considerations. The smooth, cost efficient and quality implementation of the first investment
and the fact the plant worked in line with
our expectations from the very beginning
also played a role in recent investments
aiming at capacity expansion.
A: WHAT OPPORTUNITIES DO YOU
SEE FOR FURTHER DEVELOPMENT (RE-INVESTMENT, R&D,
ETC.) IN HUNGARY?
Q: The key product of the factory is
glass syringes made for pharmaceutical companies. The initial investment
was producing for pharmaceutical
and biotechnological fi rms that use
those syringes in their pharma products. In the upcoming months, we will
start an expansion, which will allow
us to produce another product line.
Aside from glassmaking, we are establishing new technologies such as
injection moldings, assembling and
SAIS (Self Administration of Injectable
Systems). We also look for ways to
attract other sectors to Hungary. We
project growth in both sectors as long
as we continue to produce reliable,
quality products at planned cost levels.
Successful manufacturing can also
provide a basis to widen value-added
processes in Hungary in the future –
though that will take a few years.
A: HOW DO YOU SEE HUNGARY AS
AN INVESTMENT LOCATION IN A
REGIONAL COMPARISON?
Q: Our major competitors are not countries from the region but countries from
the Far East and South America. Still,
it has happened that Hungary has lost
an investment to a country from the
CEE region.
Last year, we wanted to set up an
internal shared service center but the
parent company chose another CEE
country in the end. Even though Hungary remains an attractive investment
location, it has lost some of its edge in
foreign investments. Stability and predictability [of the legal environment] are
the factors decision-makers are most
concerned about.
gary can provide them with a suitable
business environment. They, of course,
have to be coupled/complemented
with a successful business activity here
and progression, the basis of which is
created by the high-level knowledge of
professionals.
A good geographical location and
infrastructure are also assets. During
internal discussion at BD, we also
enhance the long-standing tradition
of value-added industries – such as
pharmaceutical – in the country.
Csaba Vecsernyés, factory head at the Hungarian unit of Becton Dickinson
“A GOOD
GEOGRAPHICAL
LOCATION AND
INFRASTRUCTURE
ARE ALSO ASSETS.”
A: WHAT DO YOU THINK ARE
THE ARGUMENTS IN FAVOR THE
COUNTRY?
Q: Hungary’s biggest advantage is
its skilled workforce and competitive
wages. The availability of quality service
providers, trained entrepreneurs and
the supportive attitude of bureaucratic
personnel is also a plus. All of the above
are essential for visitors to feel that Hun-
1.0 WHAT SHOULD YOU KNOW ABOUT HUNGARY
IGH23
Investing Guide Hungary 2013
FOOD INDUSTRY
ICT SECTOR
6%
overing telecommunications,
IT outsourcing, IT services,
and software and hardware
production, the Hungarian ICT
market has grown fast in the
last couple of years and leads the region in
computer assembly and communications
equipment manufacturing.
C
OF THE COUNTRY’S
EXPORTS ARE GENERATED BY
THE FOOD INDUSTRY
The ICT sector accounts for 10% of total
Hungarian gross domestic product and it
employs more than 100,000 people.
The major global software developers and
hardware producers are present in the
country. Hardware production is centered
in central Transdanubia, including NOKIA
in Komárom, and central Hungary, including IBM in Vác. The majority of large software companies are located in Budapest.
Several IT companies operate technology
service centers and many of them have
relocated their R&D activities here.
ICT related R&D drives more than a quarter of total R&D expenditure. Hungary has
become a regional incubator for software
development, including process control
software, game programs and geographical information technology, focusing
on car positioning (“sat-nav”) systems.
Hungarian software developers have
achieved international success in several
fields, such as virus protection, bioinformatics, and IT security. The presence and
successful operation of companies such
as Ericsson, Oracle and Gameloft show
further evidence of the high quality of
workforce in Hungary.
MAJOR ICT
COMPANIES IN
HUNGARY
SERVICE PROVIDERS
IBM
HP
TATA
Ericsson
Oracle
SAP
Invitel
British Telecom
Vodafone
PRODUCERS
IBM
Samsung
Flextronics
Albacomp
GE
Nokia
Philips
THE ICT SECTOR ACCOUNTS FOR 10% OF TOTAL
HUNGARIAN GROSS DOMESTIC PRODUCT AND IT
EMPLOYS MORE THAN 100,000 PEOPLE.
A
employ fewer than 10 people. The share
of foreign capital in the industry is 47%.
The processing of meat, coffee and tea,
and the manufacturing of soft drinks are
the sectors with the highest share of FDI
in the Hungarian food industry.
Its export revenues are vital to Hungary’s
overall trade balance. Hungary is the
only net exporter of agricultural and food
products in the CEE region. The industry
generates 6% of the country’s exports.
Most food industry companies (more
than 85%) are micro-enterprises that
Multinational companies involved in
vegetable oil processing, and confectionary and snacks, for example, dominate
the sector. There are about 200 large food
producers altogether, two-thirds of which
are owned by investors from abroad.
Large producers primarily use Hungarian raw materials. Recent data demonstrates the increasing share of FDI in the
lthough its share in the
output of Hungarian industry
has decreased over the
past eight-to-ten years, the
food processing industry
still remains one of the most important
sub-sectors of the economy. The food
industry employed 124,000 in 2011.
production of vegetable oils, which was
the recipient of nearly half of the inflows
of foreign capital into the food industry in
2011. The processing and preserving of
fruits and vegetables and the manufacture of pet food have also been popular
targets. Major foreign investors include
Bonduelle, Bunge, Givaudan, Globus,
Mars, Nestlé, POPZ, and Unilever.
Although industrial players can be found
all over the country, the abundance of
raw material resources determines certain concentrations in the regions of central Hungary, the northern and southern
Great Plain and central Transdanubia.
(EEA) NATIONALS
2.0 WHY INVEST IN HUNGARY?
IGH25
Investing Guide Hungary 2013
2.0
WHY INVEST
IN HUNGARY?
O
ne of the competitive advantages Hungary has compared to other countries in
the region is the government’s strong commitment
to streamlining business processes
and to increasing the competitiveness
of both SMEs and large enterprises in
Hungary through a wide range of available incentives.
Both refundable and non-refundable
incentives are available to investors coming to or expanding in Hungary. The main
types of incentives related to investments
are cash subsidies (either from the Hungarian Government or from EU Funds),
tax incentives, low-interest loans, or land
available for free or at reduced prices.
The regulations on incentive opportunities are in accordance with EU rules.
Regional aid intensity
map (2007-2013)
The maximum available amounts of
regional incentives are based on a
regional aid map. All seven regions of
Hungary are qualified for incentives,
and aid intensity varies between 10%
and 50% for large corporations, while
small- and medium-sized companies
REGIONAL AID INTENSITY MAP*
*Please note that the indicated intensities can be increased by 10% in case of mediumsized enterprises and by 20% in case of micro- and small-sized enterprises.
SOURCE: HITA, 2013
(EEA) NATIONALS
2.0 WHY INVEST IN HUNGARY?
are able to increase the intensity of the
received subsidies by 10 or 20 percentage points. The maximum aid intensity
for the capital city, Budapest, is 10%
for large corporations.
The maximum available aid intensity
decreases if the investment is a large
investment (exceeding EUR 50 million):
IGH27
Investing Guide Hungary 2013
50% of the maximum aid intensity determined in the regional aid map is available
for that part of the investment between
EUR 50 and 100 million, while 34% of the
maximum aid intensity for that part of
the investment beyond EUR 100 million.
When calculating the maximum available
amount of regional incentives, all regional
incentives – including cash subsidies,
development tax incentive, etc. – need to
be taken into account.
Grant decisions must be made by
December 31, 2013 in order to receive
subsidies based on the current regional
aid intensity map.
BOTH REFUNDABLE AND NON-REFUNDABLE
INCENTIVES ARE AVAILABLE TO INVESTORS
COMING TO OR EXPANDING IN HUNGARY.
CASH SUBSIDIES
Non-refundable
cash subsidies
The main types of cash incentives
related to investments are focused
on implementing the investment (e.g.
purchasing assets, construction
work, etc.), creating new jobs and
training employees.
“VIP” investment
subsidy
The Hungarian Government provides
a negotiation-based “VIP” subsidy opportunity for investments greater than
EUR 10 million with a certain number of
newly created jobs, depending on the
purpose and location of the investment. If the investment is between
EUR 10 and 25 million, the Hungarian
authorities will investigate the possibility of subsidizing the project from
available EU Funds.
The main areas that attract support are
investments in manufacturing (greenfield, brownfield or capacity extension),
shared service centers, research and
development, and tourism projects.
In order to be eligible for the subsidy,
50-100 new jobs have to be created
by the investor in the case of manufacturing investments, depending on
the region where the investment takes
place. In the case of large investments
of more than EUR 50 million, 100-200
new jobs have to be created, depending on the place of the investment.
In the case of establishing or expanding SSCs, at least 100 new jobs have to
be created in general, and at least 200
new jobs in central Hungary.
In the case of R&D related investments
at least 10 new jobs have to be created
in connection with the R&D activity.
Subsidy applications can be submitted
to HITA in either Hungarian or English.
The terms and conditions of the VIP
subsidy are determined in the negotiation procedure between the investor
and the Hungarian authorities.
In order to obtain a subsidy as defined
by the current regulation, grant decisions must be made by December 31,
2013, which is based on the negotiated
subsidy agreement.
Manufacturing
investments
Since the introduction of the VIP subsidy
opportunity in 2004, 80 companies have
already received Hungarian Government
support. These companies had decided
to carry out investments with a value of
more than HUF 1,906 billion (cca. EUR
6.57 billion) and to create, altogether,
approximately 35,000 new jobs. The
Hungarian Government decided to grant
a total of HUF 160.5 billion (cca. EUR 553
million), paid in tranches, as the projects
progress. A large number of projects
have been located in Budapest, central
Transdanubia, northern Hungary and
the northern Great Plain. Furthermore,
investment volume has been especially
high in central Transdanubia and the
southern Great Plain due to some very
large investments.
Based on the negotiations initiated within
the last three years (2010 - 2012), there is
significant interest in the VIP negotiation
process, as 45 companies have submitted subsidy applications for a combined
investment value of HUF 1,413 billion
(cca. EUR 4.87 billion).
The most dominant sectors are car
manufacturing, green energy and
SSCs. The eligible costs for a manufacturing investment can be the purchase of the plot, construction costs
or rental fee for the building, infrastructural costs, the purchase of new equipment and machines, intangible assets,
etc. The investment period is determined by the investor, and usually does
not exceed five years. The commitment
period, starting after the completion of
the investment, is five years.
R&D Investments
The Hungarian Government places special importance on the development and support of R&D activity, both in terms of supporting
R&D investments (R&D property and asset costs or R&D-related salary costs), and R&D project-based costs (e.g. project-related salary costs, materials costs, etc.). Because of the world-class scientific knowledge available in Hungary, it is an attractive environment
for multinationals (e.g. telecommunications companies, the automotive sector, etc.), which often collaborate with Hungarian universities on R&D projects and expand their R&D capacities here.
The eligible costs for R&D investment can be the asset-related costs (purchase of the plot, new equipment and machines, intangible
assets) or 24 months’ salary and contributions for new employees employed within a three-year period.
(EEA) NATIONALS
2.0 WHY INVEST IN HUNGARY?
INNOVATION CENTERS
FOCUSING ON QUALITY AND
KNOWLEDGE TRANSFER
“
H
THE CORE FUNCTION OF INNOVATION CENTERS IS TO CREATE A
POSSIBILITY FOR SMES TO ACCESS INNOVATIVE TECHNOLOGIES
AND TO INCREASE THE ADDED VALUE OF THEIR ACTIVITIES
ungarian governments have
been advocating the primary importance of R&D within
the country’s economy for
several years now. Still,
R&D spending, and the pace of developments in the area, undoubtedly has room
for further improvement. Most importantly,
the government aimed to overtake the EU
average in terms of innovation by 2013, but
currently ranks 22nd on the latest European Innovation Scoreboard (EIS). There are,
however, positive signs, especially when it
comes to newly developed Innovation and
R&D centers.
“The core function of innovation centers is
to create a possibility for SMEs to access
innovative technologies, and to increase
the added value of their activities,” explains
Dr. Sándor Erdei, board member of the
Hungarian Innovation Association.
In 2011 Hungary spent HUF 336.5 billion
(1.2% of GDP) on R&D and innovation, the
highest amount in the past two decades.
The recently published National R&D and
Innovation Strategy, however, aims even
higher, and states that this ratio should be
increased to 1.8% of GDP by 2020. The
strategy notes that while increasing the
available resources is crucial, harmonizing government efforts with R&D policies
is just as important. “Hungarian governments deem the area of R&D a long-term
IGH29
Investing Guide Hungary 2013
investment into the future, and make any
specific steps concerning the industry in
light of the above,” the analytical section of
the strategy reads.
While government-level strategy focuses
on the future, exactly as it should, there
already exist great examples of proinnovation environments within Hungary.
Innovation centers, most of all, aim to
create small, prosperous islands with an
innovation-friendly environment, even
if the Hungarian economy as a whole
faces major challenges.
“Currently there are fewer than 10 innovation centers in the country that are working
at full force, and that may substantially
affect the entire sector’s output,” Erdei
says. “It is important to highlight, however,
that in many cases we are talking about
projects in their developmental phase, and
altogether it is not so much about quantity,
but rather quality. We expect that those
projects that are currently underway will
become important players in the area in
the near future, too,” he adds.
The National R&D and Innovation Strategy
also acknowledges the importance of
these innovation centers, and states that
a certain critical mass needs to be met in
order to use the country’s R&D potential
at full efficiency. Thus, the strategy targets
a major growth both in the number and
“
the output of these centers. The specific
objectives include the opening of 30 more
R&D innovation centers by 2020, and
ensuring that at least 30 of the existing
centers join the world’s innovation elite.
Supporting knowledge transfer is another important role of innovation centers,
both for SMEs and multinational companies, with a special focus on knowledge
transfer between the two. That aside, it
is crucial that these hubs cooperate with
other knowledge centers and universities
in their region, for such cooperation can
spawn a real competitive advantage for
all parties involved.
Another aim of the Hungarian R&D sector
is to change the ratio of state subsidized
and privately funded projects by increasing
the percentage share of the latter. Innovation centers also show a great example in
this field: while they are almost always developed using EU funding, currently about
80% of their maintenance costs are covered by multinational companies. Industry
experts expect that this ratio will decrease
in the coming years as more SMEs can be
channeled into these innovation-friendly
environments, providing them with the
opportunity to create self-funding cooperation themselves. Projects within the
JEREMIE program are also expected to
play a critical role in defining the pace and
growth potential of future developments.
Shared Service
Centers
More than 70 SSCs operate in Hungary
with around 30,000 employees. The
number of inquiries and the expansion
of already existing companies show
that Hungary is an attractive location.
Several companies looking to streamline their global operations through
BPO and SSCs (e.g. IBM, Vodafone,
BP, Morgan Stanley, etc.) have already
found attractive locations and a productive workforce in Hungary. In 2012
the following companies decided to invest or to expand their already existing
operations in Hungary: Avis, Raiffeisen
and Tetra Pak. The eligible costs for
incentives aimed at creation or expansion of SSCs are 24 months’ salary
and contribution for new employees
employed within a three-year-period.
KEY ARGUMENTS WHY
TO INVEST IN THE
HUNGARIAN SHARED
SERVICE SECTOR
• Availability of skilled labor
• Cost savings
• Cultural compatibility and
language skills
• Expertise in particular back-office
or service activities
• Technological and other
infrastructure
• Business security and strong
intellectual property regulation
2.0 WHY INVEST IN HUNGARY?
In Hungary there are
more than 70 Shared
Service Centers (SSC)
employing more than 30,000
employees, most of whom
are highly qualified young
professionals. Besides these
investments the Hungarian
Investment and Trade
Agency (HITA) had about 20
SSC projects in the pipeline
at the beginning of 2013.
he high number of shared
service centers indicates that
Budapest is still an attractive
location for such investments,”
HITA vice president Péter Faragó said, announcing the establishment
of a new SSC in January 2013. Technology product company Systemax’s EMEA
Pan-European Technology Products
Group will open its first SSC in a leased
facility in the Corvin Promenade (downtown
Budapest) in the spring of 2013. The facility
is expected to ramp up to approximately
200 employees by year-end. The new
center will provide administrative and back
office services and serve as the hub for
Systemax’s Central and Eastern European
sales and marketing operations.
“T
Choosing a location is an extremely complex procedure with an extensive review
of several cities, usually including most of
Budapest’s regional peers. HITA Director
of Investment Promotion Katalin Németh
pointed out that as there are only slight
differences in what the major cities of CEE
can offer, potential investors consider many
details beside the obvious key factors. Hungary’s outstanding mathematical tradition,
IGH31
Investing Guide Hungary 2013
SHARED
SERVICE
CENTERS
IN HUNGARY
for instance, was a major consideration,
when Morgan Stanley chose Budapest to
locate its Mathematical Modeling Center, to
provide analysis to support the company’s
global fixed income trading business, in
2005. In the case of Systemax, the local
expertise was a determining factor in its
choice of location. As the opinion of those
already here is of major importance to the
newcomers, HITA regularly organizes site
visits to existing service centers.
The main advantages of Hungary cited
by companies already here are a skilled
workforce with good language skills,
the developed infrastructure and central
location. Newcomers such as Systemax
evidently agree. “After a careful study
of where to locate our company, we
decided on Budapest due to the quality
of the workforce, the education level, the
excitement of people and the quality of
life in the city,” said Systemax chairman
and CEO Richard Leeds. “We have
found that cooperation with the authorities here was truly exceptional compared to other places that we looked at.”
Systemax managers also pointed out
that very few countries in Europe could
CHOOSING A LOCATION IS AN
EXTREMELY COMPLEX PROCEDURE
match the extent of the language skills
in Hungary, adding that in Budapest
there are plenty of people who speak
more than two languages, including
for instance, less common ones such
as Swedish or Norwegian. As most of
the employees are young graduates,
infrastructure and public transport access was also a key consideration. They
noted that the geographic location of
the country provides a perfect platform
for the company to start operations in
new locations in Eastern Europe. The
EMEA group currently serves customers in the UK, France, Italy, Netherlands,
Germany, Spain and Sweden, with a
local presence and remote customer
service in Ireland, Belgium, Austria and
Switzerland.
There are currently even more projects to
expand existing facilities than to open new
ones, Mrs. Németh said. SSCs typically
hire 20 to 50 new people at a time when
they add new activities to their existing
portfolio. Morgan Stanley, Citibank and
Diageo are among the biggest employers.
Mrs. Németh said that the most popular
locations besides downtown Budapest are
the Váci corridor, the Corvin promenade
and the Lechner Ödön alley. The majority of
the centers are in Budapest, but some are
located on the countryside, for instance in
Debrecen, Pécs and Miskolc.
“VIP” training subsidy
The Hungarian Government also offers what is known as the VIP subsidy
opportunity for training employees for
new positions. The subsidy is available to investors creating at least 50
new jobs. The maximum amount of
the training subsidy for creating 50 to
500 new jobs is EUR 1 and 2 million for
creating more than 500 new jobs. It is
provided for both general and special
training. The maximum aid intensity
is 60% in the case of general training
and 25% for targeted training. The aid
intensity can be increased further in
the case of small- and medium-sized
enterprises and for training of disabled
or disadvantaged workers. The training
subsidy is not a regional incentive, thus
it can be granted on top of the maximum regional aid intensity.
“VIP” job creation
subsidy
The Hungarian Government provides
a job creation subsidy for those investments entitled to VIP investment
subsidies and that create at least 250
new jobs in disadvantaged or leastdeveloped micro-regions. The maximum
available subsidy is EUR 3 million, depending on the location and the number
of new employees.
order to be eligible for the subsidy, the
number of vocational school students
with training agreements has to be increased by at least 50 compared to the
average number of trainees in the two
school years prior to the submission of
the subsidy request.
The maximum subsidy amount is EUR
8,000 per student, and the total subsidy
received cannot exceed EUR 2 million
per beneficiary.
Vocational training
Non-refundable cash
facility subsidy granted subsidies from the
by individual decision
research and technology innovation fund1
A subsidy opportunity is available
for establishing vocational training
facilities and the development of the
equipment for practical training. In
Subsidy opportunities are available from
the Hungarian national budget, primarily
aimed at R&D activities involving a broad
2.0 WHY INVEST IN HUNGARY?
50,000+
IGH33
Investing Guide Hungary 2013
REALIZING GROWTH
BY VOCATIONAL
EDUCATION
STUDENT
CONTRACTSS
IN 2012
ocational education, despite
popular belief, is embedded
in Hungarian business culture. In the early days of the
previous century, it was commonplace in Hungary for young wouldbe professionals to acquire hands-on experience at respected firms besides their
academic training. However, it seems
that up until the investments of mostly
German companies, such as Audi, Robert Bosch, Mercedes and Siemens, this
well-grounded and widespread practice
was not in the limelight in Hungary.
V
cooperation of companies, universities
and research institutions. The subsidies are available through a tendering
process.
Non-refundable
cash subsidies from
EU Funds2
A wide range of tender opportunities
is available from EU Funds, for which
investments of less than EUR 10 million
can also qualify. The conditions for the
EU tender application, the timing, and
the total amount of the subsidy available
vary from tender to tender. The tenders
reflect the importance given to supporting R&D activities, the creation of new
workplaces, environmental investments,
and technological investments (with
preference given to small- and mediumsized enterprises).
Cash subsidies from EU Funds for
2011-2013 are available through the
New Széchenyi Plan (Új Széchenyi Terv
in Hungarian, also known by its initials
ÚSzT), which was announced in January
2011. The plan focuses on the following
areas:
• Health industry
• Green economy
• Enterprise development
• Science – innovation
• Employment
• Transportation
Hungary’s aim is to utilize the EU tender
opportunities as much as possible due
to the fact that the current programming
period of the EU is valid until December
31, 2013. R&D activities and investment
activities (e.g. technology investments,
property investments) are also subsidized for large corporations; the available subsidy amount and conditions are
specified in the tender calls. Based on
the number of foreign direct investments
undertaken in the last couple of years
in Hungary, it has become more important to subsidize suppliers; therefore,
a special tender call for suppliers was
launched in 2012 with a maximum available subsidy amount of HUF 500 million
(cca. EUR 1.72 million) per project.
1,2
The tenders are published by the National Development Agency
(Nemzeti Fejlesztési Ügynökség or NFÜ) only in Hungarian:
http://nfu.gov.hu. All applications have to be submitted in Hungarian
and the subsidy contract is also in Hungarian.
But as it appears now, it is a good
thing that it was not. Straight after
launching their local operations, these
firms sought to create an education
system that resembled their native one,
which is almost identical to the Hungarian system of the early 1900’s that
mixed rigorous academic training with
professional on-site practice. These efforts are slowly gaining ground with the
assistance of the Hungarian national
and local governments, as well as that
of vocational schools that have realized the potential in this opportunity.
Of course, change cannot come fast,
but all examples show that companies,
schools, students and the government
now all understand the need to create
a German-style dual training system
that fully adapts to both present and
future business needs.
Today, the focal point of the Hungarian
vocational training system is the student
contract. While in 2005 there were only
a little over 21,000 student contracts in
the country, in 2012 more than 50,000
students had the opportunity to receive
their practical training at companies. These
students can make use of this new arrangement of spending half of their time in
classrooms and the other half at companies practicing what they have learned in
school. There are two distinctive advantages to this system. First, students receive
training that is academically relevant and
skills that are marketable; and second, it
provides students with direct employment
opportunities at companies that provide
training facilities for vocational education.
The government tries to foster the development of the vocational training system
by providing non-refundable subsidies for
the establishment and development of vocational training facilities at the companies’
sites. The aim would be to increase the
number of students with student contracts,
meaning that more students would obtain
perfectly up-to-date technology-based
training and would get to know the culture
and the functioning of a given company.
2.0 WHY INVEST IN HUNGARY?
TAX
INCENTIVES
Tax incentives are
available for companies’
future transactions.
Applications have to
be submitted to the
competent authority
in Hungary or to the
competent EU institution
before projects start.
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Investing Guide Hungary 2013
In any given tax year, the tax incentive
is available for up to 80% of the tax
payable, but in total up to the state
aid intensity ceiling. Applications for
tax incentives have to be submitted
to the Ministry for National Economy,
and the Hungarian Government has
the right to grant permission if the
aggregate eligible costs of the investment exceed EUR 100 million. If the
investment is below this threshold,
taxpayers only need to notify the
Ministry for National Economy before
starting the investment.
Tax incentives are available for investments if, among other conditions:
• The current value of the investment
is at least HUF 3 billion (cca. EUR 10
million); or
• The current value of the investment
is at least HUF 1 billion (cca. EUR
3.33 million) in certain designated
areas; and provided that:
• The investment results in the creation of new facilities or the extension
of existing facilities; or
• The investment results in substantially changed products or production
processes (excluding investments in
basic research, applied research and
experimental development); and
• In the four years following the year
in which the tax incentive is first used
against the tax base:
• The annual average number of
employees has increased by at
least 150 (excluding the number of
employees who are employed by a
foreign branch) compared with either the year before the investment
was made or the average number
of employees for the three years
preceding the investment (by 75 in
certain designated areas); or
• Annual wage costs have increased
by 600 times the minimum wage
(excluding the wage costs of the
employees who are employed by a
foreign branch) effective on the first
day of the tax year (by a multiple
of 300 in certain designated areas)
compared with either the annual
wage costs of the year before the in-
vestment was commenced or the average annual wage cost for the three
years preceding the investment.
Provided that the investment results
in the creation of new facilities or
the extension of existing facilities, or
substantially changed products or
production processes, the government may also grant tax incentives to
companies that invest in, e.g., environmental protection projects, broadband Internet services, R&D projects,
motion picture and video production,
etc. if the amount of the eligible costs
is at least HUF 100 million (cca. EUR
0.33 million).
Tax incentives are also available for
investments that create new jobs. In
the case of job creation projects, the
tax incentives are calculated based
on 24 months’ salary for new employees employed within a three-year
period. There are limitations neither
on the amount of the eligible costs
nor the number of newly created jobs.
Other tax incentives
TAX INCENTIVE RELATED TO R&D
Development tax
incentives
ach development tax incentive may be claimed for a 10year period (beginning after
completion of the development) in Corporate Income
Tax (“CIT”) returns within a maximum
period of 14 years from the original application for the incentive.
E
A CIT base allowance and Local Business Tax (“LBT”) base allowance apply to R&D activities if the taxpayer carries out
R&D activities itself. The direct costs of an entity’s own R&D, and also the value of purchased R&D services – if it was not incurred in connection with R&D services purchased from a Hungarian resident taxpayer, a private entrepreneur or a Hungarian
permanent establishment of a foreign company – are deductible from the tax base.
TAX ADVANTAGES FOR SHARED SERVICE CENTERS
Jobs created by SSCs may entitle the companies to obtain CIT and LBT incentives. For CIT purposes, SSCs may obtain a tax
allowance for job creation and in this case, depending on the location of the SSC, the amount of the allowance may be up to
12 months’ total salary expenses and contributions for newly hired employees. The LBT base may also be reduced by HUF 1
million (cca. EUR 3,333) per each additional employee in the year they are hired.
FILM, PERFORMING ARTS AND SPECTATOR SPORTS INCENTIVES
In Hungary companies are encouraged to subsidize film production, performing arts and spectator sports through the high
rate of tax savings available. As sponsors, companies are able to achieve tax savings up to 119% of the financial support they
provide for filmmakers, performing artists or sport clubs.
3.0 HOW DOES ONE INVEST IN HUNGARY?
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Investing Guide Hungary 2013
3.0
HOW DOES ONE
INVEST IN HUNGARY?
Establishing your business
T
he same rules for establishing a business in Hungary apply to foreign individuals and legal entities as to
Hungarian citizens and Hungarian entities. In the following table we have summarized the four main types
of business associations most commonly established in Hungary. Foreign businesses may also conduct
business activities in the form of a branch office or representative office established in Hungary.
LIMITED
PARTNERSHIP
(Betéti társaság or Bt)
LIMITED LIABILITY
COMPANY
(Korlátolt felelősségű
társaság or Kft)
PRIVATE COMPANY
LIMITED BY SHARES
(Zártkörűen működő
részvénytársaság or Zrt)
PUBLIC COMPANY
LIMITED BY SHARES
(Nyilvánosan működő
részvénytársaság or Nyrt)
MAIN
CHARACTERISTICS
• Business association
without legal personality;
• At least one member
with unlimited liability;
• At least one other member is only obliged to
provide a capital contribution (limited liability).
• Business association
with legal personality;
• Established with an initial capital contribution,
the amount of which is
predetermined by law;
• The members are only liable up to the amount of
their capital contribution
(limited liability).
• Business association
with legal personality;
• Established with share
capital consisting of
shares of a pre-determined number and
face value.
• Invitations to the public
to subscribe for shares
are prohibited.
• Business association
with legal personality;
• Established with share
capital consisting of
shares of a pre-determined number and
face value.
• The shares can only be
subscribed publicly.
FOR WHOM
RECOMMENDED
Founders who do not
have the minimum capital
required for a limited liability company.
Generally recommended
because of limited liability.
Founders who have the
required minimum capital
and intend to provide
different rights to the
members of the company
in the form of preference
shares (i.e. preferred dividends, preference related
to voting rights, etc).
Founders who do not
have the required
minimum capital or if the
company’s activity will be
costly.
MINIMUM NUMBER
OF FOUNDERS
Two
One
One
Two
MINIMUM AMOUNT
OF INITIAL CAPITAL
HUF 1/member
HUF 500,000
(cca. EUR 1,724)
HUF 5,000,000
(cca. EUR 17,241)
HUF 20,000,000
(cca. EUR 68,965)
3.0 HOW DOES ONE INVEST IN HUNGARY?
Accounting
requirements
tatutory accounting records
must be maintained in accordance with local GAAP.
Bookkeeping has to be
coordinated and reviewed,
and SFS has to be prepared by an
accountant certified and registered as
an auditor or a chartered accountant
at the Hungarian Ministry for National
Economy. They are responsible for
the Hungarian bookkeeping and for
compiling and supplying true and
reliable information, for maintaining
and ensuring that the data disclosed
S
Nominal
ledger
Prime Books/
Sub ledgers
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Investing Guide Hungary 2013
in the SFS conforms to legal provisions, provide a true and fair view
and are sufficiently documented in
compliance with Hungarian accounting principles; furthermore their name
and individual license number are included in the SFS. Documents can be
stored outside of Hungary. However, if
audited by the tax authorities, original
documents and records must be
made available within a minimum of
three working days. Documents must
be stored in a readable format in hard
copy for a minimum of eight years.
Hungarian companies must file their
local GAAP SFS and founder’s resolution (regarding profit distribution)
annually within five months of their
financial year-end. They must be filed
TYPE OF
ACCOUNTING
RECORD
REQUIRED
BY LOCAL
LAW
GAAP TO BE
USED
SPECIFIC
FORMAT
Nominal
ledger
Yes
Local
Journal book
Yes
Local
Trial balance
Yes
Local
Fixed asset
register
Yes
Local
No
Cash book
Yes
Local
Purchase day
book
Yes
Sales day
book
Other - VAT
sub ledger*
CURRENCY TO
BE USED
electronically (not XBRL) using the
mandatory pre-defined special pdf
file format that is uploaded onto the
website. Printed documents converted into an image file format (scanned)
will not be accepted. A special file
received from the Ministry of Justice
must also be filed in order to support the payment of the publication
fee. Non-compliance with the abovementioned accounting requirements
can trigger penalties and criminal law
consequences.
In the event of non-compliance with
the obligation to deposit and to publish the SFS – following penalties –
the tax number of the company will be
withdrawn and the company will be
declared terminated.
LANGUAGE TO
BE USED
FREQUENCY OF
UPDATE
REQUIRED FOR
TAX PURPOSES
Hungarian
Monthly/quarterly
(depending on
frequency of VAT
return)
Yes – for CIT
Hungarian
forint, Euro or
functional
Hungarian
Monthly/quarterly
(depending on
frequency of VAT
return)
No
Yes (specific
Hungarian
chart of ac- forint, Euro or
counts)
functional
Hungarian
Annually
Yes – for CIT
Hungarian
forint, Euro or
functional
Hungarian
Annually
Yes – for CIT
and VAT
No
Hungarian
forint, Euro or
functional
Hungarian
Continuous (to
reflect all events
affecting liquid
assets immediately)
Yes – for CIT
Local
No
Hungarian
forint, Euro or
functional
Hungarian
Monthly/quarterly
(depending on
frequency of VAT
return)
Yes – for CIT
Yes
Local
No
Hungarian
forint, Euro or
functional
Hungarian
Monthly/quarterly
(depending on
frequency of VAT
return)
Yes – for CIT
Yes
Local
No (to be
based on
performance
date)
Hungarian
forint
Hungarian
Monthly/quarterly
(depending on
frequency of VAT
return)
Yes – for VAT
Yes (specific
Hungarian
chart of ac- forint, Euro or
counts)
functional
No
Foreign currency
bookkeeping
A company can prepare its annual
financial statements in the convertible foreign currency specified in its
founding document, provided that at
least 25% of its (i) income, costs and
expenditures; and (ii) financial assets
and financial liabilities were earned
or incurred, as applicable, in that
convertible currency in both the current year and the previous year.
A company is in compliance with
the conditions if the total amount of
items listed in both points (i) and (ii)
is at least 25%. Point (ii) does not
include off-balance-sheet items.
Additionally, since 2010 all companies are permitted to prepare their
annual financial statements in Euros
(without the above limitation) if this is
specified in their accounting policies.
However, the accounting currency
cannot be changed for five years
after that.
Audit cycle
A company’s supreme body is
obliged to elect an auditor for a fixed
term of not more than five years.
Audits of annual financial statements
are not compulsory if both of the following conditions are satisfied:
• the company’s annual net sales
revenue (calculated for the financial
year) does not exceed an average
of HUF 200 million (cca. EUR 0.69
million) for the two financial years
preceding the financial year under
review; and
• the average number of company
employees for the two financial years
preceding the financial year under
review did not exceed 50 persons.
3.0 HOW DOES ONE INVEST IN HUNGARY?
Establishing a business
in Hungary step-by-step
STEP 1
Preparation of corporate documents
by a Hungarian attorney-at-law
(certain documents must be countersigned by a Hungarian attorney).
Time to complete: minimum one day.
Costs: Attorney fees range widely.
STEP 2
Opening of a bank account
Time to complete: one day.
Costs: depending on the bank.
STEP 3
Registering the company at the Hungarian Court of Registry and obtaining
a tax identification number. Time to
complete: in the case of companies
established using template constituting
documents – one working hour from
the issue of the company’s tax identification number (NB: this simplified registration procedure is not available for
public companies limited by shares),
otherwise the registration procedure
takes 15 working days. It should be
noted that the process could be more
time-consuming if the procedure is
suspended because the tax authority
needs more than one day to provide
the court with the tax identification
number. Costs, registration fees:
• for limited partnerships:
HUF 50,000 (cca: EUR 172);
• for limited liability companies and for
private companies limited by shares:
HUF 100,000 (cca. EUR 335)
• for public companies limited by
shares: HUF 600,000 (cca: EUR 2,069)
Simplified registration procedure:
• for limited liability companies and for
private companies limited by shares
HUF 50,000 (cca. EUR 172);
• for limited partnerships:
HUF 25,000 (cca. EUR 86)
Publication fees: uniformly HUF 5,000
(cca. EUR 17). In the case of the simplified registration procedure, publication is free of charge.
IGH41
Investing Guide
ide Hungary 2013
Hiring and employment
7.6
Labor costs
Compared with other EU countries, labor costs in Hungary are in the lower
third, as shown in the following table:
HOURLY LABOR COSTS (EUR)
EUR
HOURLY
LABOR
COST IN
HUNGARY
SOURCE: EUROSTAT – HOURLY LABOUR COSTS 2012
Unemployment
STEP 4
Registration with the Hungarian tax
authority, municipality, chamber of
commerce and the Hungarian statistical office. A representative of
the company or an authorized tax
expert can perform the administration
required for the registration. Time to
complete: one day.
Costs: free of charge.
The global economic crisis deeply affected the Hungarian labor market: due to
the fall in export orders and companies’ cost cutting measures, many employees
lost their jobs. To decrease the unemployment rate the Government introduced
certain measures to encourage employers to create new work places and to employ certain groups of employees. The unemployment rate in Q4 2012 was 10.4%,
a slight decrease compared with the previous quarter’s data (10.9%). One of the
most important goals announced by the Hungarian Government is to encourage
companies to create jobs.
UNEMPLOYMENT RATE (2012 Q3)
One-stop shop
Companies automatically receive tax identification and social security numbers at the
time they file their registration documents
with the Court of Registration. The Court of
Registration also forwards requests for VAT
and statistical registration to the relevant
authorities, at the company’s request (thus
steps 3 and 4 may be combined).
SOURCE: KSH, 2012
3.0 HOW DOES ONE INVEST IN HUNGARY?
Permanent Residence Permit in
Hungary under a special scheme
On December 11, 2012 the government amended legislation on foreigners entering Hungary in order to support
special investments in the country. The legislation, if certain conditions are met, will offer an advantageous structure for non-EU nationals to obtain Permanent Residence
Permits (or PRPs) for five years.
The PRP is a Schengen residence permit that allows free
movement within the European Economic Area. It is basically a Hungarian ID card issued to foreigners, although it
does not provide the holder with the right to vote in Hungarian elections.
The legislation change offers an opportunity to non-EU
nationals – or to companies with majority ownership by
non-EU nationals – to obtain a PRP, provided they invest
in Hungarian Government bonds for five years. The value
of the investment will be EUR 250,000, and the bonds will
be issued specially to serve this purpose.
Based on the new legislation, individuals who invest in
government bonds would be entitled to receive a residence permit issued for “other purposes”. Having this residence permit for a defined six months period opens the
right for its holder to apply for a PRP valid for five years.
The new system provides significant advantages compared to the usual process. Going through the regular immigration process, a PRP application would only be possible after having a residence permit issued for three years
for working purposes. This is only given if the individual
is in the possession of a valid work permit, which would
assume the existence of a Hungarian company who supports the application. Furthermore, before granting the
work permit, the authorities would also investigate whether the Hungarian or EU labor market would be harmed in
any way, meaning whether there is a Hungarian or EU national who would be qualified to fill in the job in question.
The new legislation does not restrict the PRP application
to having an employment relationship, the EUR 250,000
investment can be made by private individuals (although it
is still worth considering the opportunities that forming a
legal entity can also bring). Furthermore, there is no need
to have a regular residence permit for three years for employment purposes before being able to apply for the PRP.
IGH43
Investing Guide Hungary 2013
employment (i.e. during maternity
employ
leave). If the employer terminates an
employment during such periods,
employ
the notifi
not cation period shall start
immediately
after the given situation
immedi
ceases to exist (i.e. once maternity
leave has
h ended). There are certain
consequences
if the employer unlawconseq
fully terminates
employment (i.e. the
ter
employee
may
claim
compensation).
employ
In the c
case of ordinary termination of
employment, the termination period
employ
is at lea
least 30 days, but the length of
the term
termination period increases in
proportion to the number of years the
propor
employee has spent at the employer,
emplo
with 90
9 days as the maximum termination
natio period.
Labor Law
n employment relationship can only be
established through a written employment
contract, regardless of the anticipated duration of the employment. The employment
contract must specify the employee’s base
salary and the employee’s position. After the employment
contract has been signed, the employer must provide the
employee with a written description of his or her most
important rights and obligations within 15 days.
A
Effective as of January 1, 2013, the mandatory minimum
gross monthly wage is HUF 98,000 (cca. EUR 338), but
for workers employed in positions requiring a secondary
school diploma or advanced vocational training (or higher
education) it is HUF 114,000 (cca. EUR 393) per month.
Employers must pay additional premiums for shifts, night
work and overtime.
Standard working hours for full-time employment are
eight hours a day. The employer may set out a variable
work schedule within a certain period of time, which
allows an unequal allocation of working hours of given
employee. This period may last for four months or 16
weeks in general, but in specific cases i.e. seasonal work,
standby, it can reach six months or 26 weeks. A specific
provision in the collective bargaining agreement may
extend this period to 12 months or 52 weeks.
Employers may not order more than 250 hours of overtime a year, or more than 300 hours if a collective bargaining agreement is in place.
The minimum amount of paid leave is 20 days, which
increases with the employee’s age (the first increase is
when the employee reaches the age of 25). The maximum
amount of paid leave is 30 days, which applies to employees over 45. Minors and employees with children are
entitled to additional days. The paid leave days must be
granted in the year in which they are due; however, there
are options for forwarding the annual leave.
Employment may be terminated by mutual agreement, or
by termination with notification, or immediate termination.
Employers may not dismiss employees (except during the
probationary period) without sufficient justification that
clearly describes the reasons for the termination. The
option of immediate termination may be exercised if the
other party violates an employment obligation substan-
THIRD
COUNTRY
NATIONALS
The Hungarian entity is obliged
to submit a workforce demand
application form before a work
permit application can be submitted.
When the workforce demand
application has been accepted,
the work permit application can
be submitted. The permit must be
obtained before commencement of
the employment.
A Schengen visa has to be obtained
for the individual to enter Hungary.
The application should be submitted
with the work permit application
at the Hungarian embassy in the
individual’s home country.
After receiving the visa and entering
Hungary, the individual needs to go
to the Immigration Office to obtain
the residence permit and register
his/her Hungarian address.
tially and willfully or by gross negligence, or acts in a way that renders
the continuation of the employment
impossible. The reasons for termination with a notification period can
be related to the employee’s performance, to the employee’s conduct in
connection with the employment, or
to the employer’s operations.
Special rules apply to layoffs in which
numerous employees are dismissed
at the same time. There are specific
situations during which the employer cannot effectively terminate
Employees
are entitled to a severEm
ance
payment
if:
an
(a)
the
employer
terminates the
(a
employment
by
termination with
e
notifi
cation;
or
n
(b) the employer ceases
to
t exist without a legal
successor; or
(c)
( the employee terminates
the
t employment by immediate
termination.
te
Depending
on the number of years
Dep
the employee
has spent at the employe
er, the amount
of
the severance payment
a
can be between
one
and six months’
b
salary (in specific cases, e.g. when the
employee
employe would reach the relevant age
for retirement
within five years, it can be
retire
an even higher amount). However, the
employee
employe is only entitled to a severance payment
if he/she has worked for
pa
the employer
for
at least three years. No
emp
severance
payment
shall be paid, if (a) the
severan
employee qualifies as retired at the time
of the termination notification’s delivery or
when the employer ceases to exist without a legal successor; or (b) if the grounds
for termination are related to the employee’s conduct in connection with the
employment or related to the employee’s
skills (except for health issues).
3.0 HOW DOES ONE INVEST IN HUNGARY?
THE STATUTORY GROSS MINIMUM
WAGE FOR 2013 IS
REMUNERATION
The remuneration received for
work should refl ect the activity
carried out and the qualifi cation
required for the job. The statutory
gross minimum wage for 2013
is HUF 98,000 (cca. EUR 330)
per month. Employers must pay
additional wages for evening and
night shifts, weekend work and
overtime. Average monthly wages
vary by region, as shown in the
table below.
HUF 98,000
AVERAGE MONTHLY GROSS WAGE 2012 Q1-’3 (EUR)
Total
758
Southern Great Plain
600
Northern Great Plain
594
Nosrthern Hungary
621
Southern Transdanubia
629
Western Transdanubia
689
Central Transdanubia
699
Central Hungary
908
Budapest
962
Demographic capital,
education, language
Foreign
workers
In 2010/2011, more than 67,000
students graduated from Hungarian
universities and colleges with diplomas
and post-graduate degrees. The most
popular fields of study are economics,
law, IT, technical sciences, engineering, health and medical sciences and
human sciences.
Foreign nationals
can work in Hungary
under the terms
of a Hungarian
work contract or as
assignees. The legal
requirements for
staying and working
in Hungary applicable
to EEA (European
Economic Area) and
third country
nationals are different,
as outlined on page 41.
An increasing number of primary and
secondary schools teach English and
German as second languages. French,
Spanish and Chinese bilingual schools
are also available in Hungary.
IGH45
Investing Guide Hungary 2013
Job protection
action plan
To improve the situation of unqualified/
unskilled employees, jobseekers, the
young (under 25 years of age) and old
(above 55 years of age) employees,
and mothers with young children, the
Government set in place a 10-point
job protection action plan. With these
steps the Government would like to
reduce the employment costs relating
to these employee types. With employment of young or old people, unskilled
or long-term unemployed people or
mothers with young children, the employer can apply social tax allowances
(50 or 100 percent). The allowance
could be applied on the gross wage
but at the maximum on the first HUF
100,000 of the gross wage.
As part of the job protection action
plan the Government introduced two
new taxes for small- and medium-sized
enterprises. By choosing these methods of taxation, SMEs can reduce their
administration costs.
Tax allowance for
researchers
The Government introduced a new
allowance to help improve R&D. An
employer who employs researchers
(with at least a Ph.D.) can apply social
tax allowance (100%) on the gross
wage to a maximum of the first HUF
500,000 of the gross wage.
Free enterprises region
If an investor invests at least HUF 100
million in a government-designated
free enterprise region, the employer
can apply social tax allowance (100
and 50 percent) in the first three years,
per employee. The allowance can be
applied on the gross wage but to a
maximum of the first HUF 100,000 of
the gross wage.
3.0 HOW DOES ONE INVEST IN HUNGARY?
KEY TAX
RELATED ISSUES
Resident taxpayers are
subject to unlimited tax
liability. Non-residents
are subject to corporate
income taxation on
the income from their
Hungarian branch’s
business activities.
Corporate income tax
I
n general, Hungarian companies
are subject to corporate income
tax (“CIT”), which is based on
profit before tax and is subject to
certain modifications.
The most common deductions from
the tax base include:
• Losses carried forward
(see details below);
• Reversal of provisions;
• Deductions relating to research and
development (“R&D”) activity
(see details below);
• Depreciation based on rates prescribed in the CDTA;
• Reversal of impairment losses;
• Capital gains from the alienation
of registered shares;
• 50% of royalties received by
Hungarian entities
The most common additions to the tax
base include:
• Provisions for prospective obligations
and for future expenses;
• Depreciation based on accounting rules;
• Penalties and fines levied by the Hungarian tax authorities;
• Costs and expenses not incurred in the
interest of the company’s business activity;
• Interest expenses in excess of the allowable amount under the thin capitalization rules (see details below).
The CIT rate is 10% on the first HUF 500
million (cca. EUR 1.73 million) of the positive CIT base without any further preconditions and 19% on the CIT base above
this limit. If a company’s CIT base or the
pre-tax profit (whichever is higher) is less
than 2% of its total revenues reduced
by the cost of goods sold, the value of
mediated services and the income of
the foreign permanent establishments
(“minimum tax base”), the company can
choose to file a declaration presenting its
cost settlement and pay CIT in accordance with the general provisions or pay
CIT on its minimum tax base.
A special regime applies to income from
royalties, under which half of the general
tax rate may be applicable on royalties.
Thin capitalization rules may apply to
interest on any non-banking debt and
noninterest-bearing loans received from
related parties in excess of three times the
equity. Tax losses can be carried forward
indefinitely and their use is no longer subject to the Tax Authority’s approval. As of
2012, tax losses are deductible up to 50%
of the positive tax base.
Hungary has concluded double tax treaties with 79 countries, including all EU
member states, Brazil, Canada, China,
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Investing Guide Hungary 2013
Hong Kong, India, Japan, Mexico, South
Korea, Switzerland, the USA, and others. A
double tax treaty is also being negotiated
with Qatar, while those with India and the
USA are in the process of re-negotiation.
Dividends, interest and royalties are
exempt from withholding tax under the
domestic rules.
Capital gains realized by foreign persons
are exempt from CIT in Hungary. However,
this exemption does not apply to capital
gains related to stakes in Hungarian real
estate companies; in these cases, transfer
tax may also apply.
From January 1, 2012, there are further
incentives available for holding intellectual properties. Any gains on the sale (or
a capital increase that is not in cash) for
qualifying intellectual property would be
exempt from corporate income tax if the
seller reported the acquisition to the tax
authority and held the property for at least
one year. Alternatively, if such reporting
was not made, gains realized on a sale
would still be exempt if the taxable gain
is used to purchase qualifying intellectual
property within three years of the sale.
Local business tax
Entrepreneurs must pay the local business
tax (“LBT”) in the municipalities where their
activities are located.
LBT must be paid on the amount of adjusted annual turnover determined by law.
When calculating the LBT base, the annual turnover can be reduced by the cost
of goods sold, the costs of intermediated
services and subcontractors’ activities,
the costs of materials and the direct costs
of R&D. However, as of 2013 taxpayers
are only allowed to deduct from the LBT
base part of the cost of goods sold and
part of the value of intermediated services
as calculated based on brackets determined in relation to their annual sales
revenues. Royalty and interest income are
exempt from LBT. The local government
within whose jurisdiction the company
carries out its business activities determines the tax rate, but it cannot exceed
the maximum determined in the Local
Tax Act (2%). If a company carries out its
business activities within the jurisdiction
of more than one Hungarian local municipality, its LBT base has to be allocated
amongst the different municipalities. LBT
has to be paid even if the company had a
tax loss for CIT purposes. The LBT base
of a foreign permanent establishment of
a Hungarian company is included in the
Hungarian LBT base, however the LBT
base of a foreign permanent establishment of a Hungarian company is exempted from the Hungarian LBT.
Innovation contribution
Companies fitting the definition in the Accounting Act are subject to this contribution, except for small- and medium-sized
enterprises. The innovation contribution is
calculated on the LBT base, furthermore,
no innovation contribution is payable with
retroactive effect from 2012 on that part of
the tax base allocated to foreign permanent establishments. The tax rate is 0.3%.
Value added tax
As a general rule, Value Added Tax should
be charged on the following transactions:
• supplies of goods and services provided
for consideration in Hungary;
• intra-Community acquisitions of goods
in Hungary; and
• imports of goods.
Certain services are exempt from VAT, including but not limited to medical, cultural,
sporting, and educational services provided as public services; and financial and
insurance services. Intra-Community supplies of goods and services and exports
are also treated as exempt transactions.
Generally, the supply of a building or parts
of a building and the land on which it
stands and the rental of real estate are VAT
exempted. The supply of building plots
is, however, not VAT exempt. An option
is available to apply VAT on the supply or
rental of these real properties.
There are some special transactions that
may be out of the scope of Hungarian
VAT, provided that special conditions
are met. These are the acquisition of any
contributions in kind, the acquisition of
any assets by way of succession and the
transfer of a going concern.
Based on the general rule to be applied in
the case of business-to-business services,
the place of supply is where the customer
has established its business.
Personal income tax and social security rates applicable on employment income – 2013
EMPLOYEE
Personal income tax
Pension contribution
Health insurance and
unemployment contribution
EMPLOYER
Social tax
Training fund contribution
16%
10%
8.5%
27%
1.5%
The standard VAT rate in Hungary is 27%
(currently the highest in the EU). There
are also two reduced rates: 18% and 5%.
The 18% VAT rate is applicable to certain
dairy products and products made from
cereals, flour, starch and milk. The 18%
VAT rate should also be applied to commercial accommodation services and to
services that grant admission to musical
and dancing events. The 5% VAT rate
is applicable to certain pharmaceutical
products, audio books, printed books,
newspapers, district heating services and
certain live performance activities.
Related companies that have established business presences in Hungary
3.0 HOW DOES ONE INVEST IN HUNGARY?
are entitled to form a VAT group. The essence of a VAT group is that its members
act under a single VAT number in their
transactions (i.e. they issue invoices under a shared VAT number and submit a
single, joint tax return), and product and
service supplies between the members
do not qualify as business transactions
for VAT purposes.
The VAT act allows Hungarian taxpayers
to apply the domestic reverse-charge
mechanism to the following transactions:
• services related to immovable property
(e.g. construction, maintenance);
• sales of waste materials;
• sales of carbon quotas;
• sales of real estate and land if the application of VAT was chosen;
• sales of certain agricultural products (e.g.
maize, wheat, barley, rye, etc.);
Under the general rule, VAT returns have to
be submitted quarterly. However, in some
circumstances monthly or annual VAT
returns have to be prepared.
In the case of intra-Community transactions, the taxable person has to submit recapitulative statements (monthly
or quarterly). These statements can
only be submitted to the Hungarian tax
authority electronically.
From January 1, 2013 taxpayers registered in Hungary have to submit a
domestic recapitulative statement about
any transactions where the VAT amount
reaches or exceeds HUF 2 million (cca.
EUR 6,900), together with the basic data
of the related business partner. In respect of incoming invoices, those cases
also have be considered and included in
which the sum of the VAT on all transactions carried out by the same partner in
a given VAT period reaches or exceeds
HUF 2 million. If a domestic recapitulative statement has to be prepared (i.e.
there are transactions with a VAT amount
higher than the threshold), the VAT return
can only be submitted electronically.
If a taxpayer has a negative VAT balance
in a return period, this amount can be
recovered, provided the tax balance
reaches or exceeds an absolute value
of HUF 1 million (cca. EUR 3,450) for
monthly filers, HUF 250,000 (cca. EUR
860) for quarterly filers or HUF 50,000
(cca. EUR 170) for annual filers.
Environmental
protection product fee
Businesses engaged in manufacturing,
importing and intra-Community purchases
of certain products must pay an environmental protection product fee (“product
fee”). The following products are subject to
the product fee in 2013:
• certain petroleum products;
• tires;
• packaging materials (included as part of
the packaging);
• batteries;
• commercial printing paper; and
• electrical and electronic products.
The parties liable to pay the product fee
are the first domestic distributor or the user
for own purposes; in the case of domestically manufactured petroleum products,
the first buyer from the domestic distributor or the user for own purposes; and in the
case of toll manufacturing, the party that
orders the toll manufacturing. The product
fee is calculated on the basis of the weight
of the product multiplied by the fee rate.
The tax returns have to be filed quarterly,
and an advance payment has to be made
for the fourth quarter of the year. The
National Tax and Customs Authority will be
responsible for tasks related to the product
fee from the beginning of 2013.
In certain cases the product fee can
be reclaimed if the taxpayer meets the
requirements.
Transfer pricing
In Hungary transfer pricing rules apply.
Accordingly, if the prices applied in related-
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Investing Guide Hungary 2013
party transactions are not arm’s-length
prices, the tax authority is entitled to
modify a company’s CIT and special tax
base by the difference between the prices
applied and the arm’s-length prices.
Taxpayers are obliged to prepare transferpricing documentation on intragroup
transactions and also on transactions
carried out between Hungarian companies
and their foreign branches. The documentation has to be prepared for every
contract (transaction) between related parties (including in-kind contributions made
at the time entities are established).
As of 1 January 2012, it will not be required
to prepare transfer-pricing documentation for transactions between a resident
taxpayer’s permanent establishment and
related company if the resident taxpayer
under the provisions of an international
treaty adjusts the corporate tax base ensuring that it does not include the foreign
taxable income.
Rulings
The tax authority and the Ministry for
National Economy provide the following
types of ruling on submission of a formal
request:
• Non-binding rulings on the interpretation
of regulations, provided free of charge.
• Binding rulings may be requested by taxpayers and foreign entities regarding any
type of tax, provided the ruling has bearing
on the tax consequences of a future contract, transaction or chain of transactions,
and a detailed description is provided.
• Binding rulings may be requested regarding CIT, PIT, LBT and SME tax, provided
the ruling has bearing on the tax consequences of past and ongoing transactions.
• Super rulings (binding for three years,
even if there are subsequent changes to
the CIT law) are also available.
• Advance Pricing Agreements are available for the purpose of setting a transfer
price or price range with the tax authority.
• As of 2012, the Hungarian IP office is
authorized to classify whether a specific
future project can be treated as an R&D
project. This classification is binding for
any other authorities.
Other taxes
Several new taxes have come into effect
in the last few years. The bank tax is levied
on various financial institutions, including,
among others, credit institutions, financial enterprises, fund managers, etc. The
rates are different for the different types
of tax payers. The majority of the bank
levy is paid by the credit institutions and
the applicable tax rates are: 0.15% on the
first HUF 50 billion of the adjusted balance
sheet total, and 0.53% on balance sheet
total above HUF 50 billion.
Telecommunication service providers
are subject to a special tax with rates
of HUF 2 per minute for calls made and
HUF 2 per message sent. The monthly
ceiling of the tax payable is HUF 700
per phone number for private individuals and HUF 1,400 per phone number
for entities other than private individuals. In addition to corporate income
tax, energy suppliers and public utility
service providers are subject to another income tax, popularly known as
the “Robin Hood tax”. As of 2013, the
government increased its rate from 8%
to 31%, although, it is possible to claim
development tax incentive up to 50%
of the tax liability.
Insurance tax is levied on insurance companies. The rates are 15% on insurance
premiums for Casco insurance services
provided, and 10% on property and accident insurance services provided.
The buyer and first domestic distributor of
certain products are liable to pay a public
health product tax. The products which
fall under this tax are beverages, energy
drinks, cocoa powder with added sugar,
other pre-packed products with sugar,
Personal income tax
TAX AND SOCIAL SECURITY LIABILITIES
The aim of the Hungarian Government over the next few years is to simplify
administrative obligations and decrease the labor costs borne by employers.
Employers can provide their employees (and in certain cases the employee’s
close relatives) with fringe benefits (e.g. meal, vacation and recreation vouchers,
local travel passes, etc.). These benefits are taxed at preferential rates
compared with the taxation of employment income.
Benefits available to all employees of the employer can also be provided at
preferential tax rates.
Although there is no special expatriate tax regime in Hungary for assignees,
they can be provided with certain tax-free benefits.
EC Regulations 883/2004 or 1408/71 govern the social security coverage of
international assignees from EEA countries. Third-country nationals assigned
to Hungary become subject to Hungarian social security if the length of their
assignment exceeds two years, unless a bilateral social security agreement
stipulates otherwise
salty snacks, seasonings, flavored beer
and alcoholic beverages, and fruit jam. The
rates vary depending on tariff number and
salt, sugar, cocoa, methylxanthine, and
taurine content.
Payment service providers, credit institutions and special services intermediaries
are subject to the financial transaction
tax levied on payment services, e.g.
bank transfers and direct debits. The
amount payable is 0.2% of the amount
of the transaction but may not be more
than HUF 6,000 per transaction; however, all forms of cash withdrawal are
subject to a 0.3% tax rate.
In addition to the above listed main taxes,
Hungarian taxpaying entities are subject
to several smaller taxes, e.g. excise tax,
customs duties, stamp duties, registration
tax, community tax, tourism tax, sectorspecific taxes (energy tax, pharmaceutical
taxes), accident tax, etc., which are not
covered in this booklet.
4.0 ABOUT THE HUNGARIAN INVESTMENT AND TRADE AGENCY (HITA)
FOSTERING FOREIGN
INVESTMENT
Established in 2011, the Hungarian Investment and Trade Agency (HITA) is tasked
with boosting foreign investments and facilitating bilateral trade. Two years into the
job, HITA has helped numerous multinationals establish themselves in Hungary. The
agency has also worked on training Hungarian companies and cities beyond Budapest
to be ready to cooperate with foreign firms. The president of HITA Erzsébet Dobos
talks about recent achievements and also explains why she thinks Hungary performs
better in attracting foreign investments than its peers.
ABOUT THE HUNGARIAN INVESTMENT
AND TRADE AGENCY (HITA)
The Hungarian Government founded
the Hungarian Investment and Trade
Agency with the aim of promoting
foreign investment and bilateral trade,
as well as helping SME development
orientated towards EU integration.
HITA has representative offices in
six regional centers in Hungary and
a foreign network operating under
Hungary’s diplomatic services and
special assignments in more than 50
countries. HITA’s Investment Promotion Department’s main tasks are:
During the
pre-decision stage
• Tailored information packages
on the economy, industrial sectors,
incentives, business environment,
supplier network
• Assistance in location search
and evaluation
• Organization of site visits and
partner meetings
During implementation
• Supplier search
• Supplying information on
permitting procedures
• Assistance in applications
for VIP incentives
In operations
• Expansion assistance
• After care services
• Intermediary body between the
government and the companies
CONTACT DETAILS
Hungarian Investment and
Trade Agency
H-1055 Budapest, Honvéd u. 20.
Telephone: +36 1 872 6520
Fax: +36 1 872 6699
E-mail: [email protected]
Web: http://hita.hu
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Investing Guide Hungary 2013
A: HOW DO YOU SEE FOREIGN INVESTMENTS TO HUNGARY
IN 2012?
Q: In this period foreign investment to
Hungary can be divided into two groups:
reinvestment and the booming of the
automotive sector and shared service
centers. The volume of reinvestment shows
that companies already settled in Hungary
are satisfied with the economic and legal
environment and thus plan to develop
further. For the country, it means newly
created jobs and expansion. By expanding, automakers in Hungary such as Audi,
Daimler and GM attract further investments:
many suppliers have come here because
of them. Both for automakers and SSCs, a
highly skilled workforce able and willing to
work hard also plays an important role in
bringing investment here.
A: IN INVESTMENT TERMS, WHAT
IS HUNGARY’S EDGE OVER OTHER
COUNTRIES IN THE REGION?
Q: Most recently it was Systemax Technology that chose Hungary. The reasons they
listed are in general true for most other firms
that have invested here. Chief among them
is the highly skilled Hungarian workforce.
One major consideration for Systemax is
language command. “We could find people speaking two or even three languages,”
pointed out Pim Dale, CEO of Systemax
Group, at the press conference announcing
the investment. In the case of SSCs, language and other skills often overwrite the
rate of subsidies, which vary greatly based
on the region. That is, a firm is more likely
to opt for the central region and receive
less state subsidy than go to a region with
higher support but less chance of finding
the appropriate workforce.
A: WHAT DO YOU CONSIDER LAST
YEAR’S BIGGEST SUCCESS?
Q: The above example of Systemax is truly
a success story. Systemax EMEA will open
a new SSC in a rebuilt quarter of Budapest,
creating about 200 new jobs. The expansion of the AVIS SSC, Lego, Raiffeisen and
Agco are also good examples.
HITA is also proud of its Reinvest program.
Launched in 2012, the program maps out
the needs and problems of foreign investors in Hungary by organizing company
surveys and visits. Last year, we got in
touch with 26 firms from various sectors
including automotive, machinery, plastics,
logistics, R&D, and renewables. We have
learnt much of what they are concerned
about (uncertainty, demand shortage) and
what they need (more cooperation with
ministries and related bodies).
As part of investment promotion, HITA runs
supplier trainings. The aim of these programs is to familiarize domestic suppliers
with international practice and also prepare
them to become part of the MNC supplier chain. ‘Fit For Automotive”, an event
at which 15 domestic companies participated, helped local firms understand better
the workings of a French carmaker. We
KATALIN NÉMETH
Investment Promotion Director
+36 1 872 6530
[email protected]
ERZSÉBET DOBOS
PRESIDENT
+36 1 872 6500, [email protected]
TAMÁS KOKAS
have held numerous such training courses
in the food, electronics and machinery
industries as well.
A: WHAT PROGRAMS AND
EVENTS DO YOU PLAN TO
HOLD THIS YEAR?
Q: We will continue the Reinvest program,
which is an ongoing process. So is Investorfriendly Locations, a series we started
last year in cooperation with our domestic
regional network department. To preserve
our competitive edge and also improve
employment figures, potential investment locations need to be ready and well
prepared to receive investments from within
and outside the country’s borders. To date,
63 cities have created their own investorfriendly strategies.
HITA will also organize investment promotion seminars abroad involving Hungarian
diplomats. We will go on with targeted
company visits and supplier training. This
latter is of extreme importance as it gives
Hungarian SMEs, the biggest contributors
to the country’s GDP, a chance to grow on
both direct and indirect export markets.
Head of Department – Supplier programmes
+36 1 872 6548
[email protected]
ESZTER VARGA
Head of Department – Knowledge-based
Industries and Services
+36 1 872 6636
[email protected]
DOMONKOS LAKNER
Head of Department Manufacturing Industries and Energy
+36 1 872 6545
[email protected]
GYÖRGYI SOMFALVI-PETÉNYI
Head of Department - Incentives
+36 1 872 6515
[email protected]
5.0 WHY CHOOSE PWC?
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Investing Guide Hungary 2013
WHY CHOOSE PWC?
We operate responsibly, and we extend the same towards our stakeholders. Since our principal activity is audit,
We specialize in your industry.
creating transparency is both an integral part of our daily work and its main
principle. We care about our business and social environment, and we
make sure to communicate this to our stakeholders, e.g. clients and our
current and future employees. We approach corporate responsibility from
four perspectives which we call the four quadrants – community, environment, workplace and marketplace. By considering the wider impacts of our
actions and decisions in these four quadrants, we are able to make responsible and value-creating decisions. As a responsible business, we believe in
sustainable development and strive to put the above principles into practice
every day in all key areas of our operation: in corporate values, management
systems, and the services we provide. This is our common goal.
As auditors and advisors, we need to know
more about our clients than simply numbers,
in order to successfully work with them. We
need to know what factors are driving the industries in which our clients operate, and how
these factors influence the prospects of their
business. We therefore strive to continually
expand our industry expertise and experience.
Our experts have up-to-date and in-depth
knowledge, which enables us to understand
our clients’ problems and provide solutions
tailored to their specific needs.
Budapest and Győr
PHOTO: HVG / ÁKOS STILLER
619
Western Europe
We build trust. We believe that
trust-based relationships are key to
success in business. Therefore, our
goal for the last two decades has been
not only to assist our clients – whether
they are multinational corporations or
Hungarian privately owned businesses
– as advisors, but also to become their
long-term trusted partners in everyday
decision-making.
We create value. We know that
value is defined by our clients, not by us.
That is why we strive to not only offer
services, but to create solutions tailored
to our clients’ specific needs. Our global
professional network and decades of
expertise also guarantee that we always
choose the best solution for you.
We work as one team. Just as
with our clients, we aim to foster honest
dialogue and build long-term relationships between our employees. They turn
to each other with the same trust as our
clients turn to us. We can count on each
other, just as you can count on us.
We shape our environment,
rather than adapting to it.
Our opinion is equally important in the
business world as it is for our clients.
As a leading audit and advisory firm, it
is of special importance for us that we
not only react to the events that take
place around us, but take an active
role and become opinion leaders in the
Hungarian business community.
We listen to you. There is only
one thing that is more important than
our opinion, and that is our clients’
opinion. We listen to and follow the
issues and challenges our stakehold-
ers and other economic operators face
in their day-to-day operation. This is
essential for finding real solutions and
creating the value you are looking for.
We are proud of what we
represent. Through our work, we
make companies and, in the long run,
the whole business environment more
transparent. It is important for us both
as opinion leaders and advisors that
we assist in the development of ethical and sustainable business models.
We have grown to become a leading audit and advisory firm, because
we have been gathering experience
from all over the world ever since our
establishment in 1854. We combine
this knowledge with local expertise to
deliver the best services to our clients.
These are the achievements that we
are really proud of.
North America and
the Caribbean
60,853
44,885
people
people
Asia
37,805
people
people
Central and Eastern
Europe
South and Central
America
7,857
12,236
people
people
Middle East and
Africa
11,008
people
158 countries 776 cities 180,529 people world-wide.
Australasia and
Pacific Islands
5,885
people
Please visit our website at www.pwc.com/hu.
Investing Guide Hungary 2013 was prepared by PricewaterhouseCoopers Hungary Ltd. in cooperation
with the Hungarian Investment and Trade Agency. Additional content was provided by Absolut Media
Co. Ltd. as publisher.
Neither PricewaterhouseCoopers Hungary Ltd. nor the co-authors accept any responsibility for losses
arising from any action taken or not taken by anyone using this publication. It should not be regarded
as a basis for ascertaining tax liability in specific circumstances. Professional advice should always be
sought before acting on any information contained in this booklet.
© 2013 PricewaterhouseCoopers Hungary Ltd. All rights reserved. PwC refers to PricewaterhouseCoopers
Hungary Ltd. and may sometimes refer to the PwC network. Each member firm is a separate legal entity.
Please see http://www.pwc.com/structure for further details.