Hungary is famous for its cultural heritage and architecture. It is a highly remarkable business center in the European Union. It is considered the heart of Europe and has had high industrial evolution over the past few years. The capital of Hungary, Budapest, is highly recommended as a business center.
The government also provides supportive policies to determine a healthy business environment. Loans are easily granted but take extensive research by the government.
|Benefits of Doing Business in Hungary||The Drawbacks of Doing Business in Hungary|
|Gender equality||A Strict dress code|
|English as the main businesses language||High working hours.|
Advantages of Doing Business in Hungary
- Geographic Location
Hungary resides in the heart of Europe. It is one of the most prominent provinces known as a business center in the European nation.
It connects almost all the countries of the European Union and opens the gate for business leaders and traders to all EU countries. Hungary has been part of the Schengen zone since 2008.
The market of around 500 million people is in link with the country, making it an outstanding business center.
- Ready to Start a Business Site
Cheap and ready business parks are available in Hungary to start a business instantly. However, there are some cons to ready-made infrastructure facilities. Most foreign companies start their business with completely prepared sites.
Company registration and bank account can be done individually with proper procedure. However, proper guidance is required to follow by an authorized power.
Hungary is fully equipped with technology. Internet access and online processes make the country work at a faster rate. Every small startup to a prominent industry is managed and easily accessible through the internet world. This makes collaboration and community service engagement effortless.
The telecommunications industry is highly effective in the country. This leads to high access to the technical world and expands opportunities in the various possible sectors.
- High Education
The education system in Hungary is skilled-centered and practical. This produces elevated skillsets and deep-thinking minds. 90% of students in Hungary speak in English. This makes foreign business leaders more affluent in working with the workforce.
Workforce quality is highly remarkable. Industry sectors in pharmaceutical, engineering, research work, IT, and physics are booming due to qualified and competent workers.
Two-third of the workforce mainly participates in technical, educational, and research programs. The Hungarian workforce is hardworking and believes in strong professional services.
The population in Hungary is 2 million and helps connect countries, which makes high demand for production. Large consumer quality of the country gains a large number of imports.
Around 250 million people are within 1000km of the country. Moreover, the markets around Hungary have a large population of about 500 million. There is low public debt in the country. The average salary of an individual is 945 EUR. This leads to high purchasing power and access to luxury goods.
- Stable and Investment-Friendly Economy
The economic graph of Hungary is stable and does not experience an enormous fall down. This makes investors attracted to the country.
Hungary successfully plants seeds of trust and profitable investment outcomes among investors and marketers. GDP shows an elevation of 3.7% in 2017 from 1.9% in 2016. Around 2.3% growth is expected in 2018-2022. This indicates the economy’s growing strength and makes it easy to invest in the Hungarian market.
Investment growth in Hungary is increased to about 20%. The GDP rate of Hungary is about 16 thousand crores USD.
- Tax-Friendly Policy for Startups
The KATA tax system reduces tax payments for small startups. The KATA tax system means small taxpayers. This policy started in 2015 and ensures that small business startups receive the equivalent opportunity for development. A low taxation system captivates more marketers and investors to invest in the business sector and industry.
The corporate tax is flat at 9%. There is no residential tax or to any non-citizen individual. This policy brings more foreign investors and currency to the country.
- Judiciary System
The Judicial system is highly effective and controls the crime rate in the country. This creates a healthy environment of working and growth in all sectors.
Moreover, criminal activities lead to strict retribution. Laws should be stringently followed by business owners to avoid any insolvency.
Disadvantages of Doing Business in Hungary
- Solving Insolvency and Enforcement of Contracts
The insolvency takes up to 2 years. Also, the compensation of loss takes half of the monetary power. The court time is much higher to solve insolvency according to the norms of OECD. Contract enforcement takes up to 1 year to get legal and functional.
- Trade Across the Border
The time taken by imports and exports is much greater. It takes about 17 days to complete the export procedure and about 19 days to complete the import procedure. This procedure includes only legal documentation and permission from the government.
- Hierarchy System
It’s compulsory to have more native members in the company for better growth and development. This leads to an unhealthy business environment and creates an emotional rivalry among co-workers.
- Payment of Taxes
Tax submission can take a huge amount of time and energy. It takes up to 277 days for payment procedures. Moreover, the KATA tax policy does not hold for private liability sectors and businesses with more than 10,000 EUR turnover.
- Permission for Construction and Electricity
The World Bank ranks Hungary among the bottom 50 countries to easily access electricity connections. It takes about 252 days to complete the total procedure with the connection and wiring process. The construction permission requires around 102 days and 28 procedures.
Moreover, innumerable inspection is handled by different government departments, making the process lengthy and time-consuming. Subscription accounts for pre-half payment for, and registration also requires extra charges.
According to the legal rights index, Hungary lacks credit and is a weak indicator of private-sector capacity. Around 20% of the credits are marked by the private sector.