Hungary Capital Budapest Currency Forint (HUF) Language Hungarian Population 9.98 million EU status member GDP 2006 $113.1 billion Employment 92.6% Exports $67.99 billion f.o.b. (2006 est.) Imports $69.75 f.o.b. (2006 est.)

Setting up business Number of days to start business 38 Cost (% of income per capita) 20.9% Nonwage labor cost (% of salary) 35.2% Total tax rate (% profits) 59.3%

 

Hungary

Hungary, a full member of the EU since 2004, has attracted a significant amount of foreign direct investment since the country started its transition from a centrally planned economy to a functioning market economy in 1989. Hungary has been a member of the OECD since 1996 and a full member of NATO since 1999.

Hungarian parliament

Export and investment growth

The foreign companies established in Hungary have helped create a very efficient and effective business environment. The economic development was accompanied by a major structural change. Since the mid-1990s, Hungary has boasted one of the highest growth rates in Central Europe (above 4% in several consecutive years), exceeding the pace at which the EU has been expanding. Hungarian GDP growth rate was 4.2% in 2005, and is estimated at 3.9% for 2006. The per capita GDP (at current prices) for Hungary is $8,803.

The structure of the economic growth promoted by investments and export will guarantee increasing growth in the coming years together with decreasing public indebtedness. Hungary’s export industry continued to increase in 2006: the volume of exports increased by 17%, and imports increased only by 13% compared to 2005. Three-quarters of Hungarian exports find their market in the enlarged EU.

Political Stability

Since 1989, political stability has supported the development of a business and investor-friendly environment. In the parliamentary elections of spring 2006 the incumbent government was reelected, who immediately prepared a transparent and credible roadmap for policy reforms and a coherent deficit reduction strategy. At the end of 2006, the Hungarian government started streamlining public administration, launching fundamental healthcare and education reforms, and restructuring the handful of state-owned companies.

Priority Sectors

Hungary’s EU membership made increasing EU funds available for environmental protection, education, and R&D. Tax incentives are available on a per case basis through a permit issued by the Ministry of Finance. The priority sectors defined by the Hungarian government produce high-value- added products and/or require high-level knowledge. These sectors have attracted high volumes of FDI during the past years, and continue to be the main accelerators of growth in Hungary. These sectors are: automotive, electronics, information technology, R&D, biotechnology and logistics.

A firm date for entry into the Euro has not yet been set

An attractive investment location

With over $60 billion in foreign direct investment, Hungary remains one of the most attractive production locations in Europe, thanks to fast upgrading technology standards, unbroken improvements in competitiveness and the rising added value of its exports. Hungary’s attractiveness as an investment location and thus the volume of foreign direct investments into Hungary has been significantly enhanced by the accession to the EU, which also resulted in the increasing volume of profit reinvestments within FDI. Even after privatization had practically come to an end in Hungary, FDI inflows show a balanced confidence of foreign investors in the country’s business environment and in good returns on investment.

A Regional hub

Hungary is situated at the intersection of four major transport corridors, and is the logistical crossroad between the mature European markets and the developing eastern production base. In harmony with this specific and inherent natural advantage of the country, transport infrastructural investments will continue and may reach E10–11 billion by 2010.

Hungary and the United States

Tradition and modernism in Budapest

America’s investment base in Hungary is among the largest in central Europe, with US foreign direct investment totalling $3.4 billion in 2005. The value of total assets of US affiliates in Hungary is $16.5 billion; and the number of their employees is over 51,000. Hungary’s exports to the US totaled $2.5 billion in 2004. Machinery and transport equipment represent the main commodity group of Hungarian exports to its biggest overseas trade partner, the US. US-based companies, ie General Electric, Alcoa, Flextronics, Visteon, SaraLee, Guardian Industries, ExxonMobil, Johnson & Johnson, National Instruments – just to name a few – have made substantial investments over the past years in Hungary and now these companies play a very important role in the Hungarian economy.

AMCHAM Hungary

Today, AmCham Hungary is the largest AmCham in CEE with 570 members representing 22 different nations, over 60% of total foreign direct investment in Hungary, and close to 44% of Hungary’s total annual export. Since its foundation, AmCham Hungary has also been a member of the US Chamber of Commerce, the largest business association in the world.

The mission of AmCham Hungary is: “To be the leading representative for US and international business in Hungary, and to promote the global competitiveness of the country.” AmCham Hungary fulfills this mission by creating and maintaining relations between the business community and government agencies in Hungary.

 

Contact Information

American Chamber of Commerce in Hungary
V Deak Ferenc u 10
H-1052 Budapest
Hungary
Tel: +36 1266 9880
E-mail: info@amcham.hu
Website: www.amcham.hu

 

Useful websites

www.amcham.hu	US Chamber of Commerce
www.usembassy.hu	US Embassy in Budapest
www.buyusa.gov/hungary	US Commercial Service
www.itdh.hu	Investment and Trade Development Agency
www.portal.ksh.hu	Hungarian Statistics Agency
www.magyarorszag.hu	Official government website

 

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