Hungary has become Europe’s investment magnet in the last few years, attracting more foreign investors with its wealth of opportunities and favorable taxes.
Figures for 2022
The new large-scale investment projects in Hungary were at an all-time high in 2022. The $7.1 billion invested in 92 projects will create more than 15,000 jobs. The United States is one of the largest investors. Divided by region, 48% of those projects are from Asia and 42% from Western countries. The remaining 10% are from domestic sources.
Why Hungary Attracts Investors
There are many reasons why investors choose Hungary, including the lowest corporate tax rate in the EU. That rate is 9% and the withholding tax is 0%. There are also benefits via HIPA (Hungarian Investment Promotion Agency). Large investments with 100 employees receive funding assistance and other incentives.
Investments by Americans
Americans are just one of the many nationalities investing in Hungary, and they are doing so to a significant extent. From 2014 to 2022, American companies invested $1.7 billion in the country. You will find bases for Pfizer, Proctor & Gamble, General Motors, General Electric, and many other American multinational companies.
Year after year, the U.S. is the second- or third-largest investor in Hungary. American investments in Hungary are especially common in electronics, automotive, and information and communication technologies. This lines up well with the Hungarian government’s goals. The country wants to encourage value-added research-based technologies, so it encourages technology and innovation investors.
We have already touched on some of the industries that are attracting foreign investors, but some require a closer look.
Hungary ranks fifth globally for high-tech manufacturing in industrial outputs. It ranks 10th worldwide for complex products and exports. The automotive industry is an example of this, as is specialized bedding, such as Naturtex. Yet another example is Platio Solar, with its solar paver that uses recycled waste.
Another significant opportunity is Hungary’s clean energy and power. With so much manufacturing, the country wants that manufacturing to be better for the planet. Hungary was one of the first countries to commit to carbon neutrality by 2050, committing in 2020. Even better, by 2030, 90% of the electricity will come from low-carbon sources.
Film and Television
Budapest is only second to London as the largest film production service hub in Europe. 2021 saw the total value of film projects increase by 30%. It then increased by another 20% in 2022, reaching $690 million.
Tourists visit Hungary from around the world. Budapest is the most-visited city thanks to its diverse experiences. This offers numerous opportunities for tourism-related businesses. Given the number of international investors, business tourism is especially common. More and more exhibitions and congresses are taking place in the country.
More than half the land mass of Hungary is used for agriculture. That sector makes up about 4% of the gross added value of the economy. 8.9% of the country’s exports were agricultural in 2021. You will find diverse agribusinesses such as those with GM-free poultry, foods, and wines made using natural ingredients from local sources.
The life sciences contribute 10% of the total added value within manufacturing. Pharmaceutical companies generated $3.9 billion in 2021. Of the top 10 pharma and biotech companies in the world, eight have bases in Hungary.
The Hungarian banking sector is growing, with many companies moving toward digitalization.
Popular Cities to Invest In
When most people think of Hungary, they imagine Budapest. While investing in Budapest is popular, the second-largest city, Debrecen, is also a popular investment choice. It is also a popular tourist destination. Veszprem is also becoming more popular for business, even hosting the Hungarian Motion Picture Festival several years in a row.
Foreigners choose to invest in Hungary, taking advantage of the country’s low corporate tax rate and importance in numerous sectors.
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