Hungary

Find out more about Hungary and some of its major investments.
Discover more about the investors and investment sectors within this West European country.

Economic History in Brief

Hungary is a country located in Central Europe with a population of around 9,797,561 people. It stretches across an area of 35,920sqm and is bordered by Ukraine, Austria, Romania, Serbia, Slovakia and Croatia. Hungary’s capital and largest city, Budapest, is classified as a top international city and an economic hub. It boasts a high standard of living and is an OECD high-income economy. 

After centuries of being inhabited by Romans, Celts, West Slavs, Germanic people, the Huns and Avars, Hungary’s foundation was laid in the late 9th century. By the 12th century Hungary became a middle power within the Western world and by the 15th century, the country reached a golden age. Although Hungary is yet again considered as a middle power in the 21st century, it has the 57th largest economy by nominal GDP in the world. It is the 35th biggest exporter of goods in the world and the 34th biggest importer. In 2004 Hungary joined the European Union and in 2007 it became part of the Schengen Area. It is a member of the Council of Europe, the World Bank, NATO, WTO, United Nations and the AIIB. Hungary also ranks 20th in the world when it comes to quality of life. 

Prior to World War II Hungary mainly relied on economic growth through land cultivation. After the war, the country aggressively pursued industrialization under communist rule. Although the company’s strategic location in the middle of Europe was ideal for foreign trade, the rapid industrialization pushed for a more self-sufficient economy. Because of this trend, Hungary was dominated by state-owned enterprises. After 1968 the pioneering ‘New Economic Mechanism’ was launched. This initiative overhauled the economic system, encouraged the private sector to grow and for the economy to be decentralized. From this point onward Hungarian trade started being less geographically restricted, and the range of exported products started growing exponentially. The ‘New Economic Mechanism’ soon gave Hungary the boost required to become one of the most economically healthy countries in the region. 

Investment Opportunities

Although growth has slowed in recent years, Hungary continues to hold significant investment value. Some of the main industries in the country are construction materials, mining, metallurgy, chemicals, pharmaceuticals, textiles, processed food and particularly vehicle manufacturing. Hungary is also a leading producer of equipment for the information technology sector, including mobile technology and information security, with exports of close to US$20 billion annually. Since 2017 it has enjoyed a competitive tax system involving a flat corporate income tax rate of 9%. 

Companies Investing in Hungary

As one of the forerunners in Central Europe in renewing investment relations with China in the early 2000s, Hungary has enjoyed significant investment from China. Around 75% is through the acquisition of Borsodchem, a Hungarian chemical company bought by Wanhua Group. In 2018 Chinese company Zhejiang Kaishan Compressor Co. agreed to build a HUF45 billion geothermal power plant in Hungary. Shortly after the announcement was made, it was also announced that talks about launching direct flights between Shanghai and Budapest.

 Indian conglomerate SRF announced in June 2018 that it would invest around EUR60 million to build a film factory in Hungary. South African Brewer SABMiller controls as much as 30% of the beer market share in Hungary and NEPI Rockcastle, a South African commercial property investor, bought one of the largest retail centres in Budapest. In total, South Africa has invested around US$350 million in Hungary. Not to be left behind, the United States remains the largest investor in Hungary outside of Europe. With a total investment of more than US$9 billion, 17,000 American companies employed 100,000 people in Hungary. Companies with strategic investment agreements include Alcoa, BorgWarner and IBM. Other investors include Huawei, Lenovo, Sevenstar Electronics, ZTE, Canyi, Xanga, Orient Solar, Comlink and BYD Electronics.

Investors with Interests in Hungary

Founder and managing partner of Future Perfect Ventures (FPV), Jalak Jobanputra is known for her interest in making technological investments in Hungary. 

Conclusion

Because of its favourable location, Hungary is not only accessible to the four main European transport corridors; it is situated at its crossroads and has one of the highest motorway densities as well as five international airports. Hungary’s competitive tax system includes main rates of 2% maximum local business tax, .3% innovation contribution, 27% general VAT, 18% reduced VAT (accommodation, internet and necessities like bread and milk), and even tax exemption for certain services. There is also a range of subsidies and incentives made available by the government with the aim of increasing competitiveness. Hungary has a highly qualified workforce of over 4.5 million people available at a reasonable cost. As a member state of the European Union, Hungary is harmonised with European law and an investor-friendly legal environment. With a relatively stable economy throughout the 21st century, Hungary continues to be one of the leading nations in attracting foreign direct investment (FDI) in Eastern Europe – despite slowed growth. 

More Companies in Europe

Prime Ventures

Prime Ventures

Prime Ventures is a public venture capital firm with interests in the European technological entrepreneurial market.
Read More
Permanent TSB logo

Permanent TSB Group Holdings

Permanent TSB Group Holdings is an Irish financial services provider. Read about the company’s history and learn more about its significant investments.
Read More
entrepreneur first logo

Entrepreneur First

Entrepreneur First is an international investment company interested in helping people build technology companies.
Read More
innogy innovation hub

Innovation Hub

Innovation Hub is a driver of new ideas, business models, and disruptive paradigm shifts in the fields of artificial intelligence, energy, cyber ventures, and more.
Read More

TRG Capital

Etienne vantKruys’ Token Research Group Capital is a Digital Assets Firm Changing the Way Investors See Decentralized Finance and Emerging Blockchain Tech.
Read More
JOIN Capital Logo

JOIN Capital

Etienne vantKruys’ Token Research Group Capital is a Digital Assets Firm Changing the Way Investors See Decentralized Finance and Emerging Blockchain Tech.
Read More
Invex Ventures

Index Ventures

Index Ventures is an international venture capital company that focuses on technology-aided companies.
Read More
investcorp

Investcorp

Investcorp is a global alternative investment company that caters to both private and institutional clients
Read More
robeco

Robeco

Robeco is a Dutch asset managing company headquartered in Rotterdam, Netherlands. As in December 2017, Robeco had AuM to the value of €191 billion under ...
Read More

Investors with Interest in Europe

Gil Smolinski Гиль Смолинский

Gil Smolinski

Gil Smolinski is an angel investor and business developer who has several decades of experience in the tech industry. He is the co-founder and managing ...
Read More
Chris Adelsbach

Chris Adelsbach

Chris Adelsbach is a UK-based entrepreneur, mentor, and investor. His portfolio of 175 companies focuses primarily on disruptive fintech.
Read More
Paul Heydon

Paul Heydon

Paul Heydon, an angel and seed round investor actively working within the gaming and augmented reality/ virtual reality and AI industries.
Read More
Pete Flint

Pete Flint

Pete Flint is a British internet entrepreneur in San Francisco. He is the founder and CEO of Trulia real estate
Read More
Baldo Sanso

Baldo Sanso

Baldo Sanso is an Italian-Venezuelan executive and investor. He serves as president of Tracia Hong Kong and is Director of the Swiss China Corporation.
Read More
Russell Buckley

Russell Buckley

Russell Buckley, an English investment specialist and avid investment blogger known for his fresh and founder-friendly approach to investment.
Read More
Jan Sessenhausen

Jan Sessenhausen

Jan Sessenhausen is a German early-growth venture capital investor. Sessenhausen is known for steering away from generic trends. Instead, his investment ideology explores companies that ...
Read More
tim schumacher

Tim Schumacher

Tim Schumacher is a German entrepreneur and angel investor. He is best known for co-founding Sedo Holding AG and for serving as CEO of the ...
Read More
Errol Damelin - Early Stage Investor

Errol Damelin

Errol Damelin is a South African entrepreneur and early-stage technology investor, who has previously been recognized as Digital Entrepreneur of the Year
Read More

More Countries from Europe

Flag Germany

Germany

Germany is considered one of the top three global investment locations, alongside the United States and China, and is rapidly developing a reputation as the ...
Read more
Spain Flag

Spain

Spain is one of the top European countries when it comes to foreign investment. Read about investment opportunities and government investment aid.
Read more
UK Flag

United Kingdom

The United Kingdom has one of the most open economies in the world. Despite its continuing flirtation with socialism and the often-burdensome weight of history, ...
Read more