Why Hungary Is a Venture Capital Hotspot

15th October 2025

Hungary is a top choice for venture capital investments in Central and Eastern Europe in 2025. Investors are drawn to the government support and growing startup activity.

Hungary is also constantly improving its infrastructure and introducing policy incentives to appeal to more investors. Despite economic challenges, Hungary remains a venture capital hotspot for various reasons.

Recent Growth in VC/PE Activity

Hungary’s venture capital and private equity market saw a significant increase in 2024. Total capital invested rose by 357.2%, reaching €606 million. Much of that figure was thanks to a large buyout worth €483 million. But other deals also grew in size.

There was also a sharp increase in fundraising compared to 2023. Hungarian funds raised €227.7 million in 2024. That number is twice that of two years prior. It must be noted, however, that while deal value rose, the number of deals dropped by 52.5% since 2023.

Business Sectors That Intrigue Investors

Some sectors get more attention from investors.

Technology and consumer goods. These services lead in value and count.
Growth-stage firms. These companies already have customers and revenue. Still, they are getting bigger investments, often from foreign investors.
AI. Artificial intelligence is still getting some attention. Early-stage AI startups can still secure some funding. As expected, however, investment dropped by around 47% between 2023 and 2024.

Hungary Provides Support and Incentives

Hungary’s support and incentives are intended to stimulate the country’s economic growth. This growth is crucial in the sustainability, digital, and technology industries. The following strategies allow Hungary to continue attracting Foreign Direct Investment (FDI).

Government agencies and funds offer grants and seed funding for new companies.
Hungary has one of the lowest corporate tax rates in the EU. Companies pay only 9% tax on their profit.
Hungary’s government rules regarding economic growth reward research, innovation, and investment.

Big Projects and Foreign Investment

Big outside investors are pouring money into Hungary. These include:

CATL, a large Chinese battery maker, has built a factory near Debrecen. The investment was around €7.3 billion, and the factory produces 100 GWh of batteries every year. It also created around 9,000 jobs.
Sunwoda is building its first European EV battery plant in northeast Hungary. The total investment is around €1.5 billion, and over a thousand jobs will be created.
FiberHome set up a plant in Kisbér via its subsidiary Zettanet Kft. The company makes fiber-optic cable and has invested around €20 million. It also employs around 150 people.

These are just a handful of the ongoing investments in Hungary. Investments such as these reflect just how much of a draw the country is in 2025.

Hungary’s Natural Advantages

Hungary has several natural strengths as a country that help it attract investments.

Many young people in the country study science, technology, engineering, and math (STEM). In 2023, around 24% of Hungarian bachelor’s graduates were in STEM fields.
Hungary offers good options for technical and vocational education. Around two-thirds of the workforce has completed secondary, technical, or vocational schooling.
Universities and companies work together on research and technical training. This allows students to gain the practical skills that companies want.
Hungary is the center of Central Europe. This location gives Hungarian companies access to EU and non-EU markets.
The country has strong transport networks, including highways, rail lines, and major ports.
The capital, Budapest, boasts large logistics and warehouse parks.
Hungary is on several European transport corridors, including the Danube River route.
Wages in Hungary are lower than in many Western European countries.
Hungary’s labor cost is the 3^rd lowest in the EU for companies with at least 10 people.
Office space, industrial real estate, and land are more affordable compared to countries such as France and Germany.

Hungary Is a Solid Investment Option

Hungary stands out as an ideal investment destination for serious investors in 2025. Its competitive tax structure and appealing investment policies will continue to attract capital from around the world. Looking ahead, as the government reaffirms its commitment to innovation and technology, the VC market can only thrive.

Sources

https://www.deloitte.com/hu/en/services/consulting/perspectives/the-investors-guide-to-hungary-2025.html

https://practiceguides.chambers.com/practice-guides/investing-in-2025/hungary/trends-and-developments

https://www.ey.com/content/dam/ey-unified-site/ey-com/hu-hu/services/strategy-transactions/documents/ey-hvca-report-2024.pdf

https://www.pwc.com/hu/en/publications/assets/How-will-AI-impact-the-Hungarian-labour-market.pdf

https://therecursive.com/hungarys-ai-ecosystem-in-2024-investment-drops-by-half-compared-to-2023/

https://accace.com/corporate-income-tax-in-hungary/

https://taxfoundation.org/location/hungary/

https://www.ey.com/en_gl/technical/tax-alerts/hungary-enacts-local-legislation-on-beps-2-0-pillar-two

https://www.catl.com/en/news/983.html

https://jebridge.jp/en/2025/09/09/chinese-manufacturers-hungary/

https://hungarytoday.hu/chinas-fiberhome-to-set-up-its-largest-european-base-in-hungary/