FDI in figures

Hungary benefitted from a change in the direction of the FDIs, which went from low value textile and food industry sectors to the production of luxury vehicles, high technology and the etablishment of renewable energy systems. Significant amounts of money have also been invested in 5 star tourism, in the big casinos in Bezenye and in the information techonologies sector.

The country was very severly affected by the financial crisis in 2008 and foreign direct investments have been dropping in Hungary since that year, especially because of the rise in labor costs and the appreciation of the forint.  The International Monetary Fund's support and other international organisations like the European Union should enable the country to keep a certain amount of monetary stability, which would reinstate the country's appeal in the coming years and return invetor confidence.

Why you should choose to invest in Hungary

Strong points

- Hungary is the most advanced country in Central Europe in terms of reforms;
- Its financial system is one of the most well developed in the region;
- Its infrastructures, its work force and the framework of its regulations are of high quality;
- Integration in the EU, reinforces its political and economic stability and the support of large international organisations reduces the effects of the crisis.

Weak points

- The situation of public finances is still in decline and the state debt is at a high level;
- Foreign accounts are largely and persistently unbalanced;
- If we are to consider its openness, the country is dependent on the economic situation of its main EU trade partners;
- The covering of financing needs depends partly on a volatile capital. Level of currency reserves is relatively low;
- The population has called for loans in foreign currency and the inflation which has followed the crisis has made these loans difficult to repay for the Hungarian borrowers;
- Banks have suffered great losses from the financial crisis due to debt repurchase and speculative investments;
- The currency has lost its value since the financial crisis.

Government measures to motivate or restrict FDI

Attracting foreign investment is a priority for the Hungarian government. The Ministry of Economic Affairs established the Hungarian Investment and Trade Development Agency (ITDH) in 1993, and this agency continues to help companies looking to make major investments in the country. ITDH has set up a “one-stop-shop” service for potential large investors to maintain a competitive environment and attract multinational companies.

In the context of the international crisis, the state has implemented measures to maintain the country's appeal: special loans and guarantees programs to compensate for the difficulties of banks in granting loans, the improvement of the administrative situation and the reduction of formalities and the facititated acquisition of building permits. Additionally, the exchange rate has made Hungary less expensive than before, whereas productivity which was already high, has remained at the same level. Because of this, a number of international companies have maintained their investments in the country and have outsourced entire departments such as accounting or call centres.

Bilateral investment conventions signed by Hungary

Consult the website of the European Union.

Procedures relative to foreign investment

Freedom of establishment

Guaranteed

Acquisition of holdings

Up to 100 percent foreign ownership is permitted with the exception of designated "strategic" holdings in some defense-related industries. The current government’s renewed privatization concept is opening some of the strategic holdings to private participation. Foreigners investing in financial institutions and insurance must officially notify the government but do not need advance authorization. Foreign financial institutions may operate branches and conduct cross-border financial services in Hungary, in keeping with OECD commitments. Currently, foreign firms control 2/3 of manufacturing, 90% of telecommunications and 60% of the energy sector.

Obligation to declare

For contact information at national customs authorities, please visit the European Union website or the Hungarian Customs Office.

Competent organization for the declaration

Hungarian Customs and Finance Guard

Requests for specific authorizations

To determine if a license is required for a particular product, check the TARIC.
Hungary, like many EU Member States, maintains its own list of goods subject to import licensing (arms, precious metals etc.)

Finding assistance for further information

Investment aid agency

Hungarian Investment and Trade Development Agency

Other useful resources