As a booming economy in the middle of Europe with an attractively low corporate tax rate, Hungary offers some excellent opportunities for investment.
In our next country focus feature, we’re taking a deep dive into why this is, highlighting factors such as its growth in the tech market and access to worldwide free trade agreements.
Strategic location
Hungary is located in the heart of Europe, making it a gateway to both the western and eastern sides of the continent. With around 440 million consumers in the EU alone, this makes Hungary an incredibly attractive destination for businesses that want to tap into the market.
Favourable business environment
Hungary’s 9% corporate tax rate is among the lowest of the 27 nations in the EU. It has been used to attract major investment across a range of sectors, helping to lift economic growth and employment. The country also offers low operating costs compared to many of their European counterparts, especially in terms of labour and real estate prices.
Additionally, both the government in Hungary and the EU offer various incentives and subsidies for businesses looking to invest, including funds for training and research and development.
Strong economy
Over recent years, the country has made significant progress in reducing its debt levels, and its credit ratings have also improved. This stability helps to provide a sense of security for businesses looking to invest in the area.
Skilled workforce
In technical and engineering fields, Hungary’s talent is amongst the best in the world. There is a constant influx of fresh developers in the country as around 3,000 IT students graduate annually from the 70+ institutions that offer highly regarded IT and computing programmes. In fact, six of their universities have even been listed in the QS World University Rankings.
As of 2022, Hungary had a little over 80,000 professional developers, helping the country to sit in the top 30 of Coursera’s IT skills rankings. With a score index of 72% in technology and 78% in data science, it indicates that individuals are incredibly skilled.
Many of the country’s citizens are also fluent in multiple languages, making them valuable assets for companies that need employees who can communicate with customers and colleagues around the world.
Access to free trade agreements (FTAs)
Hungary benefits from a number of FTAs that have been negotiated with other countries and regions from around the world. Many of these facilitate the free movement of goods, services and people, or lower tariffs to increase access to different markets. Some of the FTAs that Hungary is a member of include:
- European Free Trade Association
- European Economic Area
- World Trade Organization
- Comprehensive Economic and Trade Agreement
- EU-Japan Economic Partnership Agreement
Growing tech ecosystem
Software development contributes significantly to Hungary’s economy, representing around 6% of GDP, with systems integration and application development accounting for roughly a quarter of the market.
A high proportion of investment has been placed on growing the technology sector in general, with a number of startups, incubators and accelerators in the country. Much of their focus has been on areas including artificial intelligence, fintech and cybersecurity.
Our view on Hungary
Taking into account Hungary’s business environment and growth in the tech space, we are keen to grow our footprint in the country by welcoming exciting vertical market software companies into the Vesta family.
We would love to speak to more business owners who are looking to pursue the next stage in their company’s journey. If you’d like to chat to our team, get in touch.
