Economic overview
Hungary’s economy beat the projections in 2019, posting one of the most noteworthy development rates in Europe during the time regardless of the negative outside condition. The nation was positioned first in the EU28 with GDP rising 5.1% in the initial nine months of the year. Global associations, the administration, and the national bank have increased their entire year conjectures to near 5%.
Financial development was upheld by an expansion in local interest, ventures and fares. Development will proceed in a reasonable structure with all parts contributing during 2020. In spite of the fact that the development pace of utilization is required to hinder it will stay one of the most significant factors in GDP development, as will advertise based administrations.
The country’s economical achievement is to a great extent credited to the solid execution of the vehicle and gadgets parts, which pulled in the most interests in 2019. Limit developments in these two territories helped modern development to approach 6% in 2019, amidst exchange pressures and the lull worldwide mechanical creation.
The yield of Hungary’s vehicle segment relies to a great extent upon the condition of the German economy, the nation’s biggest fare showcase with deals expected to reach €30bn, or 30% of the aggregate, in 2019. A droop sought after in the eurozone could hit vehicle creators and providers hard.
Main sectors of Industry
Automotive
The automotive sector is one of Hungary’s center enterprises and creates practically 21% of total exports. Over 600 organizations employ a total of 100,000 individuals are dynamic in the part. Four enormous car Original Equipment Manufacturers (“OEMs”) have creation offices in the nation: Suzuki, Audi, Opel, and Daimler. Sequential creation of Mercedes-Benz vehicles started in March 2012 in Kecskemét. The huge scope ventures by OEMs pulled in various hardware makers and different providers. Little and medium-sized nearby car organizations have likewise become steady and key accomplices of both privately based and Western European vehicle producers and Tier 1 providers.
Electronics
The sector is one of the biggest modern areas in Hungary, representing 22% of all out Hungarian assembling creation. The nation is the biggest electronics producer in the CEE area.
Pharmaceutical industry
Hungary’s pharmaceutical industry with its century-long custom is one of the most productive and fruitful parts of the Hungarian economy. With the most evolved pharmaceutical and biotechnology parts in Central and Eastern Europe, Hungary gives a perfect base to life science organizations arranging further development right now, towards the Balkan states, and the more far off business sectors in Eastern Europe and Asia.
ICT
The ICT part represents 10% of complete Hungarian GDP and it utilizes in excess of 100,000 individuals. Covering broadcast communications, IT re-appropriating, IT administrations, and programming and equipment creation, the Hungarian ICT showcase has developed quick over the most recent few years and leads the locale in PC gathering and correspondences gear fabricating.
Food Industry
Despite the fact that its offer in the yield of Hungarian industry has diminished over the previous decade, the nourishment preparing industry despite everything stays one of the most significant sub-segments of the economy. The nourishment business utilized 124,000 in 2011. Its fare incomes are fundamental to Hungary’s general exchange balance. Hungary is the main net exporter of agrarian and nourishment items in the CEE area. The business produces 6% of the nation’s fares. Most nourishment industry organizations (over 85%) are small scale endeavors that utilize less than 10 individuals. The portion of outside capital in the business is 47%.
Taxes for businesses in Hungary
Tax rate is 9% of the positive amount of the tax base. Business associations need to submit their CIT returns by May 31st following the tax year. For taxpayers with a different tax year, the filing deadline is the last day of the fifth month following their business year.
Taxpayers with Hungarian residence have to pay corporate tax on their worldwide income, while non-resident businesses only need to pay tax on the income from their Hungarian activities.
A company without any profit would still have to pay a corporate income tax on the income minimum as tax base.
Why invest in Hungary
1. Central location in Europe which makes it suitable for transport and logistics activities or for import and export businesses.
2. Well trained workforce: individuals have college/university degrees or have other qualifications in areas like manufacturing.
3. Business friendly environment
Hungary welcomes foreign direct investments and has a competitive policy for foreign investments. Although the country offers many business opportunities, some of the leading sectors in Hungary are:
– the automotive industry;
– the electronics sector;
– the services sector;
– the food and agriculture industry.
4. A favourable tax system – the corporate income tax is lower than in other European countries. The personal income tax has a flat rate of 16%.
5. Government incentives – either refundable or non-refundable.