匈牙利投资指南 | 中国投资
文 | 匈牙利驻华大使馆
翻译 | 王晓波
编辑 | 张梅
设计 | 姜灵枝 李玉丹
制作 | 黄硕存
Hungarian investment environment
Author | Embassy of Hungary in China
Design | Jiang Lingzhi
Production | Huang Shuocun
Hungary has 1,000 years of history and a unique fusion of Eastern and Western cultures. The River Danube flows through Budapest, one of the most beautiful capitals in the world. The area of the country is 93 022 kilometers, and the population is 9.8 million. The country is a popular tourist destination, especially Budapest, but on the countryside the protected Puszta-regions, the Great Plain, the romantic Danube Bend with its historic sites and pretty baroque towns attract visitors in every season. Lake Balaton, the largest fresh water lake in Central Europe, is a perfect holiday resort.
Hungary is also a bustling business hub situated right at the very heart of Europe, all destinations are within easy reach. As a member of the European Union, companies coming to do business here join the EU market of more than 500 million people. Hungary is an open economy and particular emphasis is placed on encouraging foreign direct investment. Partnership with potential investors is considered a national priority and special attention is paid to the needs of companies already established in Hungary and to the further improvement of the business climate. Forty-five of the world’s 80 largest multinationals, and many of their SME suppliers have established a long-term presence in Hungary, benefiting from the highly skilled workforce, access to excellent universities, an advantageous location, qualified suppliers, and from an advanced business infrastructure. Investors do not simply regard Hungary as an ideal production location, but also as a remarkable “advanced manufacturing& innovation center” of Europe. This trend is in line with Hungary’s intention to further increase the number of investments generating high added value: in addition to the “Made in Hungary” type of projects, increasing emphasis is put on “Invented in Hungary” type of investments.
Hungary and China
Political and economic relations between Hungary and China have never been better. Hungary was among the first countries to establish diplomatic ties with China. High-level meetings are frequent: Hungary is the only country in the region that was visited by both the current and the former Chinese Prime Ministers as well as two former Presidents. In 2010, the Hungarian government decided that in addition to traditional European markets, Hungary would strengthen economic and trade relations with Eastern countries, and especially with China among them. This complements the “One Belt, One Road” initiative of China. Hungary is the first Belt and Road country in Europe that signed the Memorandum of Understanding with China on “Jointly Building the Silk Road Economic Belt and the 21st Century Maritime Silk Road” during the official visit of Foreign Minister Wang Yi in June 2015.
Of course, the economic and trade relations are some of the most important ties, like cooperation in the financial sector. Hungary and China have some achievements in that area: the Hungarian central bank was the first to sign SWAPLINE agreement with its counterpart, the People’s Bank of China in 2013. Two years later, the Central Bank of Hungary started its own „Renminbi Program”. In 2014, the state owned EXIM bank of Hungary and Export-Import Bank of China established the China-CEE Investment Fund; and the same year the regional center of Bank of China opened in Budapest, which center also serves as the first regional renminbi clearing center in Central and Eastern Europe. The BoC’s renminbi clearing center was the fifth in Europe, after such financial hubs as London, Luxemburg, Paris and Frankfurt.
Trade and investment relations of China and Hungary are also outstanding in the region. In the past years, Hungary was the largest exporter to China from the Central and Eastern European countries. According to the Chinese statistics, the trade turnover reached almost 10 billion USD in 2017, and the growing tendency remained in the first four months of 2018. Today, China is one of Hungary’s most important economic and trade partners overall, and its most important foreign trade partner outside the EU. The scale of Chinese investments into Hungary is by far the greatest in Central and Eastern Europe – 1/3 of all Chinese investment into the entire CEE region.
Most important Chinese investors present in Hungary include:
• Bank of China, financial sector,
• Huawei, telecommunication,
• ZTE, telecommunication,
• Chinasoft International Ltd, ICT,
• Hisense, electronics,
• BYD, automotive industry
Other Chinese companies also present in Hungary include:
• Wanhua, chemicals (BorsodChem acquisition)
• Midea, electronic appliances (KUKA acquisition)
• ChemChina, chemical industries (Pirelli and Syngenta acquisitions)
Business and investment climate in Hungary
Hungary has been a member of the European Union since 2004, and fellow member states are its most important trade and investment partners. The country has an open economy and a GDP of approximately 120 billion USD. The growth of the GDP was 4% in 2017. Currently, foreign firms control 66% of the manufacturing sector, 90% of the telecommunications sector, and 35% of the energy sector. The private sector currently produces about 80% of Hungary’s economic output. The banking system includes 36 banks, 11 specialized credit institutions and 49 co-operative credit institutions. Other than the publicly listed OTP Bank, the most important commercial banks are mostly subsidiaries or branch offices of major foreign banks. Hungary has a highly developed telecommunications system providing 100% physical coverage, and widespread 4G mobile coverage. The country has several famous and practice-oriented universities, each playing a notable role in the education of the highly qualified workforce, representing an important competitive advantage for the country. Hungary is particularly strong in engineering, medicine, economics, and science training.
The Hungarian economy is one of the most diversified in the world, but of course has some key areas. Automotive is one of Hungary’s core industries, employing approximately 140,000 people, producing 20% of total exports. Electronics, ICT, pharmaceuticals and medical technology are also increasingly important, as the country is shifting towards an R&D and innovation focus. The food industry is a traditionally important sector. The last two decades have shown that Hungary, with its skilled labor force, is an ideal country for the operation of shared service centers.
Laws and regulations
As an EU Member State, all EU regulations are directly applicable in Hungary, even without further domestic measures. If a Hungarian law is contrary to EU legislation, the EU rule takes precedence. As a whole, labor, environment, health, and safety laws are consistent with EU regulations. Hungary participates in the WTO as an EU Member State.
If someone intends to start a company, the registration of business associations is compulsory in Hungary. Firms must contract an attorney and register online with the Court of Registration. Registry courts must process applications to register limited liability and joint-enterprise companies within 15 workdays. If the Court fails to act within the given timeframe, the new company is automatically registered. Foreign individuals or companies can establish businesses in Hungary without restrictions.
When the company is registered, you should know about the legal regime of Hungary. For investors, the most relevant regulations stem from EU directives and the laws passed by Parliament to implement these. Laws in Parliament can be found on Parliament’s website (http://www.parlament.hu/parl_en.htm). Legislation, once passed, is published in a legal gazette and available online at www.magyarkozlony.hu. The government can issue decrees, which also have national scope, but they cannot be contrary to laws enacted by Parliament. Local municipalities can create local decrees, limited to the local jurisdiction.
A legally working business has duties, like financial reporting. Hungarian financial reporting standards are in line with the International Accounting Standards and the EU Fourth and Seventh Directives. The Accounting law requires all businesses to prepare consolidated financial statements on an annual basis, in accordance with international financial standards.
In any businesses life, some disputes, and legal issues might occur, which means, the business needs to go to court. The Hungarian legal system is based on continental European (German-French and Roman law) traditions. Contracts are enforced by ordinary courts or – if stipulated by contract – arbitration centers. Investors in Hungary can agree with their partners to turn to Hungarian or foreign arbitration courts.
For investors, the laws and regulations on foreign direct investment might be the most important legal documents. Hungarian law provides strong protections for property and investment. The Foreign Investment Act of 1988 is the main law protecting investors. It grants full protection to the investments and businesses of non-Hungarian resident investors and guarantees that non-Hungarian investors will be treated in the same manner as Hungarian ones. The Act also contains a repatriation guarantee under which foreign investors are free to remit profits and investment capital to their home country in the event of partial or complete termination of their enterprise. A substantial body of other laws also protects foreign investment, provides equal treatment under Hungarian laws, and enables profit repatriation. Institutions and procedures are in place to ensure compliance with legislation and competition rules and the laws do not differentiate between domestic and foreign investors, treating all investors equally.
Why to invest in Hungary
The central and favorable location of the country and high-quality infrastructure have made it an attractive destination for Foreign Direct Investment. Between 1989 and 2016, Hungary received approximately 80 billion USD in FDI, mainly in the banking, automotive, software development, and life sciences. Hungary actively encourages investments in manufacturing and high-value added sectors, including research and development centers, and service centers. The industrial strategy of the country targets biotechnology, information and communications technology, software development, the automotive and defense industries, and health tourism as priority sectors for growth. The easy accessibility of Hungary is often mentioned as one of its main advantages: it is at the crossroads of four main European transport corridors. Hungary has one of the highest motorway densities in Europe and has five international airports. The country’s location enables companies to have morning calls with Asian countries and afternoon calls with the USA, which makes Hungary a preferred location for shared service centers as well. The climate of the country lacks extremes and can be considered a typical continental influenced climate.
One of Hungary’s competitive advantages over other countries in the region is the government’s strong commitment to streamlining business processes and increasing the competitiveness of SMEs and large firms in Hungary. To promote investment, at the start of 2017, Hungary lowered corporate tax to 9% and labor tax to 22%, which are among the lowest rates in the EU. Besides reducing the corporate income tax to a 9% flat rate, Hungary introduced new forms of cash incentive measures in January 2017, to enhance corporate R&D activities and the realization of technology intensive investments.
In 2014, the Hungarian Investment Promotion Agency (HIPA) was established to encourage foreign companies to invest in Hungary and to support inbound FDI. HIPA offers company and sector-specific consultancy, recommends locations for investment, acts as a mediator between large international companies and Hungarian firms to facilitate supplier relationships, organizes supplier training, and maintains active contact with trade associations. Its services are available to all investors. For more information, see: https://hipa.hu/main.
Hungary offers wide-ranging incentives – both refundable and non-refundable – to facilitate foreign direct investments and reinvestments by local enterprises. The main types of incentives are cash subsidies, tax incentives, low-interest loans, and free or reduced price lands.
As a member of the European Union Hungary has access to EU funds for a number of development goals, such as asset acquisition, infrastructural development, new construction, renovation, service development, job creation and financing of human resources costs. The conditions for applying, the timing, and the total amount of the subsidy available vary from tender to tender. The aid intensity can be increased further based on the exact location of the investment (with the maximum of 50% of the total investment amount), in the case of small- and medium-sized enterprises and for training of disabled or disadvantaged workers, to mention some examples.
⬆Budapest cityscape at sunset