A strategic location in the heart of Europe
One of the main reasons as to why you should start a business in Hungary is probably its strategic position: thanks to its locus in Central/Eastern Europe, Hungary provides a flexible timezone and easy transborder transportation.
TIMEZONE. Its position also allows companies to carry out morning calls with Asian countries and afternoon calls with the USA, making Hungary a great place for transnational and international enterprises wishing to open a new business or expand an existing one outside the confines of its territory, which is imperative given the largely globalized world we live in.
TRANSPORTATION. It can be easily and quickly accessed from countries surrounding it by various means of transport. It has one of the highest motorway densities in Europe as it is located on the crossroads of the 4 main European transport corridors. This together with top-notch transportation infrastructure is highly convenient for investors: thanks to the flexible and efficient transborder transportation they can successfully, cheaply and quickly move and distribute goods. It also has five international airports besides the Ferenc Liszt International Airport, all of which offer low-cost flight connections with major European airports.
EU MEMBER. Hungary has been an EU member since 2004. This has brought many advantages, such as free trades with neighboring EU members without any restrictions such as quotas or tariffs.
A growing economy
Over the last decade the Hungarian economy has experienced substantial economic growth as the GDP and GNP have been steadily increasing. Although at the moment it is frictioned due to the ongoing pandemic crisis, there is large positive optimism for its future fate as experts are confident that the economy will be afloat by next year, which is much faster than what other EU countries are expecting.
Starting up a business in Hungary is quite smooth as it generally takes up to 5 working days for all the legal paperwork to be properly submitted. Lawyers are responsible for taking care of these procedures.
Registration can be even quicker as it usually takes 1 administrative day, which means that after signing to confirm the company establishment, you are provided the certificate issued by the Company Register with a national and European VAT number.
Hungary is considered to have one of the most desirable and favorable direct tax legislations in Europe. This is because it has a flat tax of 15% on personal income of individuals, corporate profits are taxed at 9% (which is the lowest in all of Europe). On top we have to consider a local tax of 2% on turnover, minus cost of sold goods.
EDUCATED AND COST-COMPETITIVE WORKFORCE. Hungary enjoys a largely bilingual and well educated labor force, which is mostly employed in tertiary service sectors as well as being involved in the emerging quaternary specialised service sectors. This makes Hungary a post-industrialist country and classifies it as a developed country.
As well as being very qualified and proficient, the Hungarian workforce is cost-competitive and it can successfully integrate within the European production chain.
This can be profoundly beneficial for the near future as well, since more and more countries are implementing anti-globalization and protectionist policies, whereas TNC’S (Transnational Corporations) are wishing to bring back their factories from the Far East to locations closer to their headquarters. As a result of its central location and low-cost of labor, Hungary can certainly be a desirable destination for those very TNC’s that are wishing to relocate their factories.
LABOUR REGULATIONS. Moreover, the constitution on labor can be attributed as highly beneficial for the entrepreneurs wishing to start up an enterprise as its labor code is broadly homogenous to the European Union countries under the new set of regulations (Act I of Labor code 2012), a framework that aims to loosen formalities of employment issues.
EMPLOYMENT RATES. For these and many other reasons, employment rates in Hungary are extremely high (69.3%), exceeding the average of both OECD countries (68,4) and EU countries. This statistic is mutually beneficial both for the employer and employee: companies are constantly looking for new employees, which means that people seeking jobs can easily get hired but at the same time it can create a constraint in the availability.
Very livable country
Hungary has been voted multiple times as one of the most livable countries in the world. This could be largely attributed to the fact that it is characterized by a dynamic balance between history and modernity as well as a colourful cultural background. It is also really affordable with respects to food, accomodation and various services when compared to its Western European countries.
Hungary offers a convivial atmosphere and attractions that spark anyone’s interests: vintage stores, beer gardens, one-of-a-kind hipster coffee places, century-old cafes and artist cafes (like the well known New York Cafe), the high note skybar (voted an excellent site by TripAdvisor) or the AquaWorld, the largest aqua park in Central European region.
The capital of Hungary, Budapest, is one of the most pulchritudinous capitals. Despite being still undervalued by people as it is often mistakenly assumed not as vibrant and dynamic as other European capitals, it is multicultural and rich in fun opportunities.
The Hungarian culture is largely based on its stunning and diverse architecture, which blends tradition and history in magnificent pieces of work like the Buda Castle or the Gellert thermal bath. Along with many historical buildings, Hungary also includes various contemporary ones, such as new architectural projects that have the most cutting-edge designing and use of glass and concrete. Both the modern and the historic aspects of the country accompany each other to give a dynamic feel.
Having said this, it comes as no surprise that Hungary is such a popular destination for tourists who are immensely fascinated by the magnificent landscapes, cost of living and quality of life, so much so that many of them decide to move and open businesses in this great country with so much to offer!
ITL Group can be the guide for the opening of your business or office in Hungary. Reach out to us today to find out how we can help!