INVEST in HUNGARY © Published on Behalf of the Hungarian Investment Promotion Agency, 2018 INVEST (HIPA) in HUNGARY HUNGARY SMART

Home , Northern Hungary

INVEST IN HUNGARY © Published on behalf of the Hungarian Investment Promotion Agency, 2018 INVEST (HIPA) IN HUNGARY HUNGARY SMART. AMBITIOUS.

COMPETITIVE. highly skilled workforce, access to world- services of the Hungarian Investment Dear Reader, class universities, an advantageous Promotion Agency (HIPA) ensure tailor- location, qualified suppliers, and from made offers and information packages for mart. Ambitious. Competitive. Three an advanced business infrastructure. you. You will also get access to necessary words are to describe why you can Investors do not simply regard Hungary as information about available investment Sconsider Hungary as an ideal location an ideal production location, but also as a sites, incentives, the labour market, for your growing business. Hungary is remarkable “advanced manufacturing & business environment, local suppliers and a bustling business hub situated right at innovation centre" of Europe. This trend is more. We support you in making strategic the very heart of Europe; physically and in line with Hungary’s intention to further investment decisions by providing accurate in historical, geographical, cultural and increase the number of investments information and relevant advice, and we economic terms, all destinations are within generating high added value: In addition also mediate between the government and easy reach. As a full European Union to the “Made in Hungary” type of projects, businesses based on your inputs to ensure member, companies coming to do business increasing emphasis is put on “Invented our common success. here join the EU market of more than in Hungary” type of investments. Besides 500 million people. Hungary is an open reducing the corporate income tax to a 9% Between 2014 and 2017 HIPA contributed economy and particular emphasis is placed flat rate, Hungary introduced new forms to nearly 300 successful investment on encouraging foreign direct investment. of cash incentive measures in January projects in Hungary, representing more Partnership with potential investors is 2017 to enhance corporate R&D activities than 58,000 newly created jobs and considered a national priority and special and the realization of technologyintensive approximately EUR 10 billion in investment attention is paid to the needs of companies investments. Not only Budapest, but volume. In 2018, HIPA was awarded by the already established in Hungary and to rural cities and regions are also becoming prestigious Site Seletion Magazine as the the further improvement of the business increasingly attractive to foreign investors Best IPA in Eastern Europe and Central climate. More than 40 of the world’s 80 in Hungary. The prominent universities in Asia based on its survey with 1000+ largest multinationals, and many of their the countryside serve as knowledge basis participants. SME suppliers, have established a long- for companies, the research institutions term presence here, benefiting from the are a testament to Hungary’s traditional Now, it’s your turn strengths in science and technology. The to explore the opportunities that Hungary one-stop-shop management consultancy can offer your business. Invest in Hungary 7

8 ABOUT HUNGARY 8 KEY FIGURES / 12 LIVING IN HUNGARY

16 GOVERNMENT’S MEASURES / 18 FOREIGN POLICY / 20 SAFETY AND STABILITY 16 BUSINESS ENVIRONMENT 22 BANKING SYSTEM / 24 TAXATION / 26 COMPANY ESTABLISHMENT

28 INFRASTRUCTURE 28 STRATEGIC LOCATION / 30 MOTORWAY NETWORK / 32 RAILWAY NETWORK 36 WATERWAYS AND PORTS / 38 AIR TRANSPORT 40 OFFICE MARKET / 42 TELECOMMUNICATION

44 MADE IN HUNGARY 4.0 / 46 DIGITAL NATION DEVELOPMENT PROGRAM 44 A NEW CHAPTER FOR INNOVATION 48 STARTUP ECOSYSTEM IN HUNGARY

50 HUMAN CAPITAL 50 LABOUR POOL STRUCTURE / 52 LEADING UNIVERSITIES 54 LANGUAGES / 56 VOCATIONAL EDUCATION

58 REFERENCES 58 WORLDWIDE RANKINGS / 60 COMPANIES

HUNGARIAN INVESTMENT 63 INVESTMENT SITES / 64 PROFESSIONAL ASSISTANCE / 66 SECTORS / 68 SUPPLIER 62 DEVELOPMENT / 70 M&A ADVISORY PROMOTION AGENCY (HIPA)

72 INCENTIVES 76 TAX INCENTIVES / 78 NON-REFUNDABLE CASH SUBSIDIES 88 TRAINING SUBSIDIES / 89 SUBSIDIES FROM EU FUNDS KEY FIGURES KEY HUNGARY ABOUT PARLIAMENTARY 93,023 km GOVERNMENT 9,797,561 POPULATION CURRENCY REPUBLIC FORM OF (HUF) (2017, HCSO) (2017, FORINT AREA 2 GMT +1HOUR GMT POPULATION: BUDAPEST TIME ZONE (2017, HCSO) (2017, 1,752,704 CAPITAL PRIORITY IN HUNGARY. NATIONAL IS A INVESTORS PARTNERSHIP WITH ECONOMY. LOCATION AND ITS OPEN COUNTRY’S STRATEGIC MAKE THE MOST THE OF CAN YOU WTO, NATO, IMF, ORGANISATIONS EU member since 2004 since member EU INTERNATIONAL MEMBERSHIP IN EU, UN, OECD,EU, UN, EC

(%) 40 60 50 20 30 70 10 of 2016), highest the ratio in the region. the in ratio of GDP (at end of GDP the amounted to 66% to amounted Inward FDI stock stock Inward FDI HUNGARY 66 INWARD FDI STOCK 2016 IN

REPUBLIC CZECH (PERCENTAGE GDP) OF in a beautiful city, Győr.” in abeautiful in success company. ofour Hungary, We in are at home workforce skilled site to contribute all the and industrial asan ofHungary conditions economic and political infrastructure, stable advanced the the of Hungary, central The location people. 12,000 than more employs It world. ofthe plants car production modern most ofthe one and factory engine biggest the become has Zrt. HUNGARIA AUDI Since then 25 ago. years Hungary in unit to establish aproduction decided ”We 62 SLOVAKIA of AUDI HUNGARIA Zrt. HUNGARIA of AUDI Managing Director Achim Heinfling 51 POLAND Invest in Hungary 41 SLOVENIA 32 9

Source: wiiw FDI Database Invest in Hungary 11

INVESTMENT Melanie Seymour ABOUT HUNGARY GRADE WITH Managing Director and Head of POSITIVE OUTLOOK KEY FIGURES BlackRock Budapest S&P, Fitch “We chose Budapest to open our first global Technology and Innovation centre because of the quality of talent – the core skill sets as well as the behaviours and mindsets that support or principles. 12 months on we have hired close to 300 people across 14 different functions that are already having impact within the broader BlackRock. We have attracted a diverse workforce including attracting Hungarians living abroad to come back home.”

Inward GDP GDP / capita GDP Average gross Budget FDI stock (PPS) (PPS) growth Inflation earnings balance 66% € 192,855 € 19,651 4.0% 2.4% € 961 -2.0% (of full-time employees) (of GDP) million (% of GDP)

(2016, MNB) (2016, HCSO) (2016, HCSO) (2017, HCSO) (2017, HCSO) (2017, HCSO) (2017, HCSO)

MNB = the Central Bank of Hungary HCSO = Hungarian Central Statistical Office RUIN PUBS An abandoned building Invest in Hungary 13 turned into a new wave, uniquely Hungarian bar, LIVING YOU CAN with creative thrift-shop décor and a huge dose of IN HUNGARY ENJOY AN Hungarian passion! EXCEPTIONAL QUALITY OF LIFE

Hungarian Parliament Building ranked BUDAPEST th Budapest is a vibrant capital city 10 with an outstanding cultural life in world's top 10 and magnificent historic spas: landmarks for 2018 a true metropolis that offers by TripAdvisor unforgettable experiences in every season. It is famed for its FRÖCCS breathtaking architecture and Quality Hungarian white or rosé wine photogenic river scenery. mixed with soda water: this is what we call fröccs, the official drink of spring, summer and autumn in Hungary.

HUNGARY ranked among the TOP 5 COUNTRIES in the BOCUSE D'OR HUNGARY competition This is a land with 1,000 years in 2017 of history and a unique fusion of GASTRO STORY Eastern and Western cultures. The dining scene in Budapest is livelier than This is a land where the River ever, practically you can find the cuisines of Danube flows through one of every culture in the capital, from high-end the most beautiful capitals in Michelin-star restaurants to no-frill eateries, the world. This is a land where small bistros and must-try food trucks. rejuvenating thermal springs run just below the surface. This is a land called Hungary! THERMAL WATER Hungary is blessed with an abundance of thermal water, and its bathing culture is supported by excellent facilities. The world’s largest thermal lake suitable for bathing is LIVING in the Western Hungarian town of Hévíz; the water temperature never drops below IN HUNGARY a friendly 79°F/26°C, so a dip is possible at any time of year!

INTERNATIONAL SCHOOLS Expatriates looking to stick with the curricula of their home countries can choose from a range of private international schools for their children. There are also many English, Ger- man or French public and private pre-schools for children aged from three to six. The school COUNTRYSIDE year starts in September and ends in June, Hungary’s diverse countryside has and school buses are usually available at pri- adventure on offer for lovers of outdoor vate schools. There are many opportunities to activities: 11,000 kilometres of hiking study in a foreign language at universities too. routes; more than 4,000 kilometres of cycle paths; 14 golf courses; 10 national parks; and Did you know that… many protected nature reserves for those …the kindergarten and the elementary in love with fresh air. The protected Puszta- school division of the International School of regions, the Great Plain, the romantic Danube Debrecen will start to operate in September Bend with its historic sites, and pretty 2019 and its upper school education starts baroque towns such as Eger attract visitors running from September 2020? in every season. Lake Balaton, the largest fresh water lake in Central Europe, is a perfect holiday resort. Invest in Hungary 17

…has modified its ABOUTBUSINESS HUNGARY ENVIRONMENT taxation and incentive BUSINESSGOVERNMENT’S ENVIRONMENT MEASURES system related to R&D activities to make Hungary the innovation hub of CEE.

…further improved the practice-based …is committed to dual education system further reduce taxes on built on industry employment. needs. IN ORDER TO IMPROVE THE BUSINESS CLIMATE, …has introduced its THE HUNGARIAN unique economic development plan GOVERNMENT… based on Industry 4.0 requirements. INVESTMENTS IN FOCUS INVESTMENTS …offers companies a strategic partnership, and provides them …has created the most with fast access to the competitive CIT in Government. the EU with 9% flat rate. …is helping companies …has introduced a to function reliably by new incentive scheme providing a clear agenda supporting on economic development technology intensive and FDI strategy. investments. Invest in Hungary 19

BUSINESS ENVIRONMENT HUNGARIAN FOREIGN POLICY INVESTMENT PROMOTION AGENCY EUR billion (HIPA) 2.78 With the support of the loan and guarantee Hungarian Investment EUR billion EUR8 billion portfolio Promotion Agency (HIPA), 101 foreign trade 96 export investment positive decisions were made surplus projects in the case of 96 investment projects in 2017. As a result, 17,021 new jobs will be created and foreign capital worth € 3.5 billion will come to the country. The strategic partnership programme of the Hungarian Government is also operated by HIPA, counting over 70 partners to date. HUNGARIAN EXPORT-IMPORT BANK 17,021 (EXIM) new jobs FOREIGN TRADE-FOCUSED FOREIGN POLICY Exim’s objective is – while assessing and channelling the needs of exporters – to n 2014 an institutional triangle was created to provide a coherent range support the foreign trade focused foreign policy of of lending, guarantee and Foreign trade is a Ithe Hungarian Government. The triangle covers the insurance products that cover priority in the day-to- fields of investment promotion, trade development the entire spectrum of export day tasks of Hungarian and export financing as well. Following these activity, from production diplomacy, supported changes, Hungarian foreign trade broke all previous through manufacturing to the by an extensive records in 2017, with exports valued at EUR 101 billion support of the sales process. and a foreign trade surplus of nearly EUR 8 billion. EXIM supported exports network of valued at approximately 117 local EUR 922.0 million in 2017. representations in The Hungarian state-owned 85 countries. bank disbursed new loans of EUR 1.09 billion, and had a combined loan and guarantee portfolio of EUR 2.78 billion at the end of 2017. Invest in Hungary 21

BUSINESS ENVIRONMENT SAFETY AND STABILITY POLITICAL STABILITY • foreign trade focused foreign policy • commitment on improving the SAFE HAVEN business climate Hungarian CYBER IN THE developers SECURITY ranked nr. 5 globally CARPATHIAN BASIN across all hacker rank Cyber security challenges protection of critical infrastructure is the most advanced Highly in CEE skilled extremely low programmers probability of and ethic earthquakes with hackers damaging protected from force extreme weather conditions

temperate continental climate Dale A. Martin

CEO https://blog.hackerrank.com/which-country-would-win-in-the-programming-olympics/ Siemens Zrt.

“For 130 years, Siemens has developed a strong footprint in Hungary and has contributed significantly to the economic and social development of the country with its expertise and manufacturing capabilities. We have committed, motivated and well- educated Hungarian colleagues, who ingeniously work for achieving excellent results on all levels in all fields – from skilled craftsmen to engineers, from business managers to software developers." Invest in Hungary 23

BUSINESS ENVIRONMENT BANKING SYSTEM EXIM + MEHIB

Tool for providing Hungary’s export economic-policy incentive credit agencies he Hungarian banking system includes Supporting Hungarian 35 banks, 11 specialised credit institu- exporting enterprises in facilitating Ttions and 13 co-operative credit institu- the retention of jobs, growth in tions. With regard to the dominant commercial employment and expansion of banks in Hungary, both local subsidiaries of 35 Regulated by the legislative Hungary’s export capacities Basic objective of facilitating major foreign financial institutions (e.g. Erste, BANKS frameworks of the OECD the sale of Hungarian goods and Raiffeisen, UniCredit, Intesa Sanpaolo, KBC) and the EU services in foreign markets and Hungarian-owned banks are represented. The largest commercial bank in Hungary is the publicly listed OTP Bank Plc.

ccording to the Central Bank of Hungary (MNB), the banking sector is stable in 11 Aterms of liquidity and capital adequacy, SPECIALISED moreover, it has a favourable profitability CREDIT outlook. The banking sector can be charac- INSTITUTIONS terised by intense competition, improving economic prospects, easing credit conditions and accelerating expansion in corporate lending as well. The total corporate loans outstanding rose by 10.4% in the last quarter of 2017 and the volume of new loan contracts expanded by The objective of the Hungarian Export- The state-owned Exim and MEHIB perform 30% in 2017. Though the ‘Funding for Growth 13 Import Bank (Exim) and the Hungarian the tasks of Hungary’s export credit Scheme’ was phased out in early 2017, SME Export Credit Insurance Plc. (MEHIB) is to agency, which are regulated by the leg- CO-OPERATIVE financing was ensured by market-based lending CREDIT serve Hungarian exporters through the islative frameworks of the OECD and the expanding by nearly 12% in 2017. Looking ahead, INSTITUTIONS provision of effective financing and insurance EU, with the basic objective of facilitating rising credit demand, a low yield environment facilities. Acting as a tool for providing the sale of Hungarian goods and services and continuously easing credit conditions can economic-policy incentive, the mission of in foreign markets. The Bank and the be expected for 2018, and hence the Central Exim and MEHIB is to support Hungarian Insurer, which operate within an integrated Bank of Hungary anticipates similar growth exporting enterprises in facilitating the framework, carry out their duties with dynamics in corporate lending. retention of jobs, growth in employment and a shared organisation and corporate an expansion of Hungary’s export capacities. identity, under the name of EXIM. Invest in Hungary 25

BUSINESS ENVIRONMENT PERSONAL INCOME TAX TAXATION & SOCIAL SECURITY SYSTEM

MINIMUM WAGE AVERAGE WAGE CORPORATE INCOME TAX VAT EUR* % EUR* % 9% 27/18/5/Exempt TOTAL LABOUR COSTS 540 121.0 1,163 121.0 Vocational training contribution 7 1.5 14 1.5 In 2017 a flat corporate income tax replaced The general VAT rate is 27%, reduced rates Social contribution tax 87 19.5 19.5 the former progressive system in Hungary. are 18% (e.g. bread, cereals, some dairy 187 The tax rate amounts to 9%. products, commercial accommodation GROSS SALARY 446 100.0 961 100.0 services) and 5% (e.g. meat, egg, fish, Personal income tax 67 15.0 144 15.0 journals, books, pharmaceuticals, medical Employees’ contributions 83 18.5 178 18.5 appliances, internet and district heating NET SALARY 297 66.5 639 66.5 OTHER DIRECT TAXES services). VAT-exempt services are mainly financial, banking, insurance, healtcare, education, sport, postal, certain investment- * Exchange rate: 1 EUR= 309.21 HUF Source: HCSO 2/0.3% related services, sale and rental of real estate. Local business tax is maximum 2%, the innovation contribution is 0.3%.

Yoshinobu Abe Managing Director, uring the period of 2017-2018, the social con- Magyar Suzuki tribution tax rate of 27% payable by the em- Dployers was reduced to 19.5% in two steps. ”Hungary has a favourable tax and financial The procedural rules of taxation have been signifi- environment as well as a suitable workforce. The cantly changed from 2018 in order to shorten the government’s measures and available EU funds Did you know that… tax procedures and strengthen the service provider facilitate R&D activities and foster the development of Hungary continuously improves status of the Hungarian tax authority. digital environments. In addition, reduced employer its taxation system to help driving As of 2018, both the conditions and the maximum contributions, supplier and investment promotion innovation and growth in various amounts for tax-free housing benefit encouraging projects, as well as a dual vocational training system industries? the mobility of employees have been considerably are all advantageous features.” improved as well. Invest in Hungary 27

BUSINESS ENVIRONMENT COMPANY ESTABLISHMENT

DRAFTING OPENING THE SUBMITTING THE DOCUMENTS BANK ACCOUNT THE APPLICATION REGISTRATION 1. 2. 3. 4. CONGRATULATIONS is necessary for FOR REGISTRATION TO THE with the tax administration ON YOUR company formation by HUNGARIAN COURT OF REGISTRY and the statistical office. NEW COMPANY! an attorney (the use of a The company is assigned a tax number legal representative and by the tax administration. The Court of the countersigning of Registry decides on the registration of certain documents by an the company within one business day attorney is mandatory in after the issuance of the tax number in company proceedings). case of simplified proceedings and within 15 business days after the receipt of the application in case of normal company registration proceedings. Attention must be paid to the fact, however, that in case the tax administration does not notify the NUMBER OF DAYS TO START A BUSINESS Court of Registry of the tax number within one business day, then the proceedings 7 7 9 12 12.5 37 have to be suspended, and therefore, the days days days days days days company registration proceedings may HUNGARY SLOVENIA CZECH REPUBLIC ROMANIA SLOVAK REPUBLIC POLAND require more time.

SOURCE: World Bank Group Doing Business 2018 Huelva STRATEGIC LOCATION INFRASTRUCTURE Sevilla Algeciras Bobadilla Antequera/ Córdoba Bilbao Madrid de San Juan Alcázar Bordeaux Almería Zaragoza Tarragona Cartagena Murcia Valencia Narbonne Toulouse CORRIDORS TEN-T CORE NETWORK NETWORK TRANSPORT TRANS-EUROPEAN Barcelona Fos-s.-m. Marseille/ Avignon Lyon Strasbourg Duisburg Turin Novara Nice Mainz La Spezia haven Wilhelms- Dortmund Stutgart Milan Osnabrück Genova Frankfurt Karlsruhe heim Mann- Bremerhaven Hannover Bremen Munich schweig Braun- Würzburg Bologna Verona Nuremberg Magdeburg Erfurt Hamburg Venice European Commission, REGULATION (EU) No 1316/2013 O.J. L348 - 20/12/2013 Padova Leipzig Ravenna Berlin Salzburg Regensburg Plzen Rostock Trieste Koper Prague Wels/Linz Swinoujscie Dresden Rijeka Ljubljana Szczecin Pardubice Wroclaw Brno Poznan Vienna Zagreb Ostrava Slavonski Brod Slavonski Braislava Győr Zilina Budapest Vukovar Igoumenitsa Kosice Debrecen Patras Timișoara Arad Craiova Vidin Limasol roads of three TEN-T corridors? lies…Hungary at the cross- that… know you Did Soia Thessaloniki Cluj-Napoca Calafat Invest in Hungary Athens/Piraeus Plovdiv Bucharest Ploieși Giurgiu Brașov Alexandroupolis Ruse Suceava Lekosia Iași Sulina Burgas Constanța 29

European Commission, REGULATION (EU) No 1316/2013 & 1315/2013 O.J. L348 - 20/12/2013 Source: EU Transport in Figures – Statistical Pocketbook 2017 MOTORWAY NETWORK MOTORWAY INFRASTRUCTURE 1000 1800 1400 1600 1200 (km) 800 400 600 200 HUNGARY 1884 T pest within only a few hours’ drive on motorway. on drive afew hours’ only within pest from Buda reached be can capitals 6 European Netherlands. the and density, Belgium after road third highest the and of Europe all in sities den motorway highest of the one has Hungary services. of their quality improve the dramatically ciency and added value - enabling them to effi high from remarkably benefit can nies OF MOTORWAYS IN CEE lished background in logistics, compa logistics, in background lished transport infrastructure and an estab hanks to Hungary’s highly developed POLAND 1559 REPUBLIC CZECH LENGTH 776 ROMANIA 747 BULGARIA 734 SLOVAKIA 463 - - - - -

SLOVENIA AUSTRIA Zagreb Vienna CROATIA M8 M9 M86 MOTORWAY NETWORK MOTORWAY M7 M15 Bra slava M1 COVERING THE ENTIRE ENTIRE COVERING THE SLOVAKIA M60 M9 M6 COUNTRY M0 M10 Budapest M9 M2 SERBIA M0 M9 M4 M3 M5 M8 M25 M43 M44 Invest in Hungary M30 M4 M35 M7: Budapest –SLO M7: Budapest –Pécs M6: Budapest –SRB M5: Budapest –RO/UKR/SK M3: Budapest M1: MOTORWAYS HUNGARY IN M3 ROMANIA Budapest –AUT Budapest Future development Existing M3 Záhony Vásárosnamény M49 Beregdaróc UKRAINE 31 Invest in Hungary 33

INFRASTRUCTURE YOU CAN RAILWAY NETWORK BENEFIT FROM HIGHLY DEVELOPED LOGISTICS AND

Bremerhaven TELECOMS Hamburg INFRASTRUCTURE Roerdam

Duisburg Moscow

Linz Munich Vienna Chortomlyk Salzburg Debrecen Budapest Trieste Arad Ploies ungary has direct connection to all sig- Koper Rijeka nificant harbours and terminals in Europe. Belgrade HSeveral main train lines connect Hungary Constanta with the main ports of Western Europe (e.g. Hamburg, Bremerhaven, Rotterdam), the Adri- atic (Koper, Rijeka, Trieste) and the Black Sea (Constanta) with regular block train services.

Piraeus RAILWAYS

Scheduled Non- Scheduled block trains scheduled barge service Invest in Hungary 35

INFRASTRUCTURE THE HUNGARIAN RAILWAY NETWORK RAILWAY NETWORK RFC lines in Hungary 2016

7,712 km HUNGARY

Highly developed nationAL railway network he railway network spans the entire country LEGEND and is an integral part of the international Stations Trailway network, thus providing easy access RFC 11: Amber RFC by international express trains from the neighbour- main line RFC 6: Mediterranean RFC ing regions and numerous other European coun- diversionary line tries. The total length of the Hungarian railway main line system is 7,712 km, of which 1,224 km (15.9%) is RFC7: Orient/East-Med RFC double-track, whilst the electrified railway network diversionary line has a total length of 3,083 km (40%). main line HUNGARY IS RANKED Nr. 6 BY RAILWAY LINE DENSITY IN EUROPE *Source: Eurostat Invest in Hungary 37

INFRASTRUCTURE DANUBE-RHINE-MAIN WATERWAYS AND PORTS CANAL

DANUBE-RHINE-MAIN TEN-T Core Danube ports: Komárom, Budapest CANAL TEN-T Comprehensive Danube ports: Győr-Gönyű, Dunaújváros, Paks, Baja, Mohács

Major inland ports are located in Győr-Gönyű, Komárom, Budapest, Dunaújváros, Paks, Baja and Mohács.

Amsterdam Roerdam Antwerp

Constanta

THROUGH THE CONTINENT ungary is landlocked but has access to the North Sea and the Black Sea via the river HDanube. The Danube-Rhine-Main Canal connects Rotterdam, Amsterdam, Antwerp and the industrial centres of Western Europe with the Black Sea, through the Danube–Black Sea Canal with Constanta. Invest in Hungary 39

Number of Direct Flights INFRASTRUCTURE from Budapest a Week AIR TRANSPORT / Flying Time in Hours to some major destinations

Amsterdam Berlin Doha Istanbul Munich Prague 38 / 2:10 40 / 1:30 14 / 5:20 28 / 2:05 31 / 1:15 43 / 1:25 Astana Brussels Dubai Kiev New York Rome 5x MORE THAN 2 / 5:15 39 / 2:00 9 / 5:20 11 / 1:40 4 / 9:45 25 / 1:50 Athens Cairo Dublin Lisbon Oslo Tel Aviv BEST AIRPORT 13 MILLION 11 / 2:00 4 / 3:05 13 / 3:20 11 / 3:55 10 / 2:30 21 / 3:15 IN THE EASTERN PASSENGERS Baku Chicago Frankfurt London Paris Toronto EUROPEAN IN 2017 2 / 3:45 2 / 10:15 49 / 1:45 91 / 2:50 42 / 2:20 10 / 9:40 REGION Beijing Copenhagen Helsinki Moscow Philadelphia Vienna (SKYTRAX, 2014, 2015, 4 / 9:55 8 / 1:50 37 / 2:20 21 / 2:30 7 / 10:30 21 / 0:45

2016, 2017, 2018) Zurich Note: Summer flight schedule 2018 21 / 1:40

125

DIRECT MORE THAN FLIGHTS FROM 125 CITIES DEBRECEN ARE DIRECTLY Munich 5 / 1:30 AVAILABLE London ungary is within two hours by air from most major European 9 / 2:55 capitals, and provides a key link between Europe and the Eindhoven Hrapidly expanding markets of the East. 3 / 2:20 Budapest Airport had 14.5% increase in passenger numbers and Paris 13.4% increase in cargo volumes in 2017, serving millions of busi- 2 / 2:40 nesses and passengers. More than 125 direct flights are operated Tel Aviv Debrecen 2 / 3:15 from Budapest to North-America, Middle East, China and almost all Győr-Pér Milan BUDAPEST European countries. 2 / 1:50 Malmö 2 / 1:55 EXPLORE Sármellék bud: 2020 THE COUNTRYSIDE Moscow As part of the current EUR 160 million bud: 2020 Development international 2 / 2:10 Program, Cargo City a 16,000 sqm new dedicated air cargo handling airports Pécs-Pogány Dortmund 4 2 / 2:05 facility will be handed over in Q2 2019, and will expand the hub’s Barcelona cargo handling capacity to 250,000 tons per year. 2 / 2:45 Basel 2 / 2:00 Doncaster 2 / 2:55 Larnaca 2 / 2:45 TOTAL SPACE OFFICE AVAILABLE OFFICE MARKET OFFICE INFRASTRUCTURE (CA.) (CA.) (EUR 16/sqm/month)(EUR region. the in A. Category in lowest rental prices of the one has Hungary database, According to Cushman&Wakefield's FOR A COMPETITIVE 250,460 250,460 RENTAL PRICE (EUR/sqm/month) sqm 20 30 10 16.00 I with BSCs. with popular are particularly locations close-to-city and lay-outs well as effective as properties, built newly in – currently solutions space Cost-conscious available. -7.3% sqm 250,460 with (2018 Q1) total office of the opportunities, have tenants Potential considerable US standards. and accepted German to internationally constructed were buildings most Western as its peers European greatly differ not from does terms of quality, Budapest is relatively stock new. In office capital’s the cities, toConsequently, Western many compared European by 2019. Budapest in is anticipated supply of new sqm 560,000 further while years, four last the in built was space office sqm 295,334 sites; some construction recently, very with Until dotted was city the Budapest the second largest office market in CEE. in market office largest second the Budapest making capital, Hungarian the in space office modern there is over of 3.41 sqm million n terms of offices, BUDAPEST RENTAL PRICE FOR CATEGORY „A"

BUCHAREST PRIMEIN LOCATION OFFICE BUILDING OFFICE

PRAGUE

WARSAW

FRANKFURT

LONDON

Source: Cushman&Wakefield M us for more information of the 250 available offices! available 250 of the information more us for the Investment Site Database of HIPA. Contact of HIPA. Site Contact Investment the Database listed in Hungary in offices and parks industrial sites, brownfield and 1150green- ore than these functions to Budapest." among the key factors contributing to Citi’s decision to bring infrastructure and competitive cost environment were multilingual talent pool, in addition to the well-developed skilled highly of availability the and specialties, IT other physics, mathematics, quantum engineering, technology as such skillsets, special require that jobs added value high of and 97 countries globally. The functions include a number EMEA in countries 54 in Citi-entities for Risk & Control and Finance, Technology, of areas Operations, various in services providing are employees 2,000 around currently where to Citi grow, key for sites strategic the of is one Budapest country. the in Center employers Service largest the of one is ours today and 2005 in Hungary Center in a Service “Citi was among the first international companies to establish Romania, Slovakia and Bulgaria Republic, Czech Hungary, Cluster for Head Vice President, Senior EllisJane Invest in Hungary 41 Invest in Hungary 43

INFRASTRUCTURE TELECOMMUNICATION THIRD FASTEST 4G MOBILE INTERNET IN THE WORLD (2017, OpenSignal)

HIGHLY DEVELOPED TELECOMMUNICATIONS SYSTEM E-GOVERNMENT SERVICES

GSM 900/1,800 MHz Widespread By 2019 at least On the By 2020 Adult education mobile frequencies 4G coverage 30 Mbps internet verge of all public services for training digital providing 100% all over network throughout should be electronic competence physical coverage the country the country 5G

Did you know that… 4G services …in connection with the vehicle test track in Zalaegerszeg, 5G services Hungary’s mobile communications market, will be launched in pilot mode in like that of its Central European coun- the near future? ungary has a highly developed tele- and mobile network providers in Hungary. terparts, is maturing. Services are avail- communications system – GSM The telecoms market, particularly the able from three operators, all of which are H900/1,800 MHz mobile frequen- mobile and broadband sectors, became majority or fully owned by European oper- cies providing 100% physical coverage, more dynamic after Hungary’s 2004 ators. Mobile data usage is increasingly and widespread 4G mobile coverage. The EU accession: membership saw an injec- popular: all three operators have launched telecoms market is fully liberalised: there tion of funding as well as increased regula- 4G services and a variety of mobile content are numerous internet service providers tory oversight. and applications is available. In order to 5G be competitive among EU countries, large development was announced regarding 5G coverage in Hungary. Invest in Hungary 45

SPECIFIC AND DETAILED A NEW CHAPTER FOR INNOVATION GOVERNMENT STRATEGIES MADE IN HUNGARY 4.0 TO SWITCH HUNGARY INTO HIGHER GEAR

Main topics of the Ányos Jedlik Plan include e.g. to have around Facilitating 4,000 ÁNYOS JEDLIK high value-add electric charging points all over HUNGARIAN the country until 2019. investments To support this initiative, E-MOBILITY PLAN tenders are available for cities over 15,000 inhabitants.

ungary gained a name as a cost competitive manufacturing base of Europe he “Ányos Jedlik” Hungarian E-Mobility and achieved great success in the economic period of "Made in Hungary 1.0". Cluster is an umbrella organisation of the HNowadays, companies do not simply regard Hungary as an ideal Trelevant stakeholders from different areas, production location but also as a remarkable advanced manufactur- such as: automotive companies, energy utilities, ing base. The Government aims to shift towards an innovation-focused universities, research institutions, NGOs, munici- economy, to switch into a higher gear by accelerating digital transformation. palities. They are committed to the development The new industrial revolution is creating a new type of competition in the economy. of electric mobility. In line with the global transformation, new forms of cash incentive measures have been introduced from January 1, 2017 to enhance the realization of technology- MAIN TOPICS intensive investments. OF THE ÁNYOS JEDLIK PLAN

Revising and expanding Supporting the the legal and Assessing the research-development taxation conditions relationship and innovation (‘R+D+I’) supporting electric between public activity relating to car use Expanding transport and the dissemination of the infrastructure e-mobility e-mobility, domestic of electric car use manufacturing with a significant potential of industrial development, facilitating the financing of projects Invest in Hungary 47

A NEW CHAPTER FOR INNOVATION CLICK ON HUNGARY! DIGITAL NATION DEVELOPMENT PROGRAM The government is implementing an info communication development program to create Digital Hungary

THE GOALS From 2019 at least OF THE 30 Mbps DEVELOPMENTS internet will be available Assessing in every household, and the relationship

100 Mbps between public internet in every transport and second household Hungary's fourth e-mobility generation (4G) mobile Internet coverage Improve will be complete by the the efficiency end of the year. The Digital of public The current rate is 95 % Workforce Program administration and compared to the 59 % places emphasis on the the management EU average training of a workforce of day-to-day with a high level of digital affairs professional qualifications The Industry within the scheme of 4.0 program vocational training supports digital Adult education, transformation in retraining all sectors of the and continuation Hungarian training economy Invest in Hungary 49

A NEW CHAPTER FOR INNOVATION startup ecosystem in hungary Startup Safary in Budapest

Startup Safary is an international franchise of events. It organises open days for startup ecosystems, when startups, VCs, accelerators, incubators, co-working spaces and other community hotspots open SKYSCANNER their doors to anyone interested. Thanks to the well-connected If someone wants to buy air tickets organizers, the open-minded (or make room reservations, leaders at large companies and the rent cars) today, Skyscanner has successful Hungarian startups, become an essential tool of the Budapest as a location is becoming process. Their mobile application increasingly popular: in 2017 is developed by a Hungarian team Budapest attracted the highest in a Budapest office. At the end number of visitors in Europe. of 2016, Skyscanner was sold for USD 1.74 billion to Ctrip of China, one of the major players on the market.

A Hungarian startup AImotive Commsignia was selected for Startup of the Year The company is a global provider of The company aims to make in 2017 vision-first self-driving technology roads safer, reduce congestion, at CESAwards TRESORIT by utilizing artificial intelligence, optimise traffic flows and minimise simulation and supporting hardware emissions. Commsignia’s ‘Vehicle- Turbine.AI The super-safe file sharing software architectures for a safe autonomous to-Everything’ technology, enables now has 100,000 individual users experience. 2018 started with cars to communicate with each Turbine takes trial and error and more than 10,000 corporate their truly great Hungarian other as well as with roadside experiment out of the laboratories, users, including Apple from 2017. startup success: AImotive injected infrastructure to prevent accidents and moves it onto their servers that The Hungarian startup has a USD 38 million capital from and catch all the green lights. can run millions of experiments in growing customer base in Europe renowned financial investors. a matter of minutes. Their services and in the North American region. help deliver effective treatments to The company is already working on cancer patients faster by combining its new product that will allow even the most accurate model of human more companies to access its cloud cells with tumor-specific data. encryption technology. Invest in Hungary 51

HUMAN CAPITAL YOU CAN LABOUR POOL STRUCTURE NO. OF INSTITUTIONS RELY ON GLOBALLY 65 ACKNOWLEDGED (2016/2017) HUMAN CAPITAL AT Source: HCSO A COMPETITIVE COST

STUDENTS IN TERTIARY EDUCATION

OTHER SERVICES TEACHER TRAINING & EDUCATION LABOUR POOL STRUCTURE HEALTH & WELFARE 6.4% 2.7% 12.0% 10.6% ARTS AGRICULTURE & HUMANITIES 4.1% 8.4%

SERVICES MANUFACTURING CONSTRUCTION AGRICULTURE OTHER 15.0%

Source: HCSO, 2017 17.4% 63.6% 22.3% 6.8% 5.0% 2.2% BUSINESS & ADMINISTRATION he Hungarian labour force is well qualified and 9.8% ENGINEERING, 13.7% cost effective, which increases the country’s MANUFACTURING AND Tinternational competitiveness. The country has CONSTRUCTION several famous and practice-oriented universities, SOCIAL SCIENCES each playing a notable role in the education of the & LAW MATHEMATICS, COMPUTING Source: HCSO, 2016 workforce. A large number of high quality research & NATURAL SCIENCES institutions are testament to Hungary’s traditional strengths in science and technology. Invest in Hungary 53

HUMAN CAPITAL 6 UNIVERSITIES LEADING UNIVERSITIES in Hungary appear in the QS World University of Szeged University Rankings® 2018 (which is one of the most widely read university (Southern Great Plain) comparisons listing the world’s top 959 universities).

Eötvös Loránd University (Budapest)

Total number of students 250,707 of which 190,098 are full-time University of Debrecen MAJOR (Tertiary education in Hungary (Northern Great Plain) HUNGARIAN 2016/2017) UNIVERSITIES BUDAPEST • Budapest Business School • Budapest University of Technology and Economics • Corvinus University of Budapest Budapest University • Semmelweis University BOLOGNA PROCESS of Technology and • Óbuda University Economics MISKOLC GYŐR Following the Bologna Process, which aims TATABÁNYA University of Miskolc (Budapest) Széchenyi István GÖDÖLLŐ to achieve pan-European comparability in University Edutus College SOPRON Szent István NYÍREGYHÁZA the standards and quality of higher education SZÉKES- University University of Nyíregyháza University FEHÉRVÁR qualifications, universities in Hungary offer of Sopron Corvinus University Kodolányi János three levels of degree: (Budapest) College DEBRECEN 1. BACHELOR > 2. MASTER > 3. DOCTORATE University of Debrecen Bachelor’s programs typically last three SZOMBATHELY EGER, GYÖNGYÖS to four years, master’s programs one or Eötvös Loránd Eszterházy Károly University University two, and doctorate programs three years. In some subjects, it is possible to complete a University of Pécs single five or six year course, combining the VESZPRÉM (Southern Transdanubia) University bachelor’s and master’s degrees. of Pannonia KECSKEMÉT, SZOLNOK John von Neumann (Source: www.topuniversities.com) University

KAPOSVÁR SZEGED Kaposvár University University of Szeged PÉCS University of Pécs Invest in Hungary 55

PART OF ERASMUS 200 INTERNATIONAL STUDY PROGRAM HUMAN CAPITAL BILINGUAL PRIMARY & SECONDARY Since Hungary’s entry into the EU, there has been a EDUCATIONAL INSTITUTIONS LANGUAGES growing number of native language speakers at our igh level language skills are indispensable for universities, and an increasing number of Hungarians service industry players. Young Hungarians study abroad. Since 1997, Hungary has been part of Hunderstand, that in order to get ahead in today’s Erasmus, the EU’s largest and most successful mobility Europe, linguistic skills are essential. program. Hungary is also an active participant in the Life Long Learning program, which helps to provide In the school year 2015/2016, 559,272 Hungar- international internships for students. ian primary school students and 495,701 secondary school students were learning foreign languages, According to services sector employers Hungarian mostly English and German. Hungary has approxi- graduates are motivated, loyal, and talented individu- mately 200 bilingual primary and secondary educa- als with considerable problem solving skills. tional institutions, where over 40,000 young Hungar- ians study mainly in English, German, French, Italian, In the academic year 2016/2017, over 50,000 full-time Spanish, Russian, and Chinese. students learnt 36 different foreign languages in universities or colleges. The most common languages taught at universities are English, German, French, Spanish, and Russian, but more exotic languages such Erik Slooten as Swedish, Norwegian, Finnish, Dutch, Japanese, Managing Director, CEO Chinese, Portuguese, and Arabic are also taught. All IT Services Hungary Kft. tertiary education degrees include at least one foreign language certificate and computer skills. “Building and running a successful and sustainably growing enterprise is facilitated by a variety of factors from a firm financial and legal environment through a growth-friendly tax system till the abundant supply of skilled work force. You’ll find all of those factors in Hungary, but you’ll find something on top of those too. Ambition. The ambition of a young generation from Budapest The EF English Proficiency to Debrecen and from Szeged to Pécs (locations of Index 2017 (%) ITSH service centers) to know more and achieve more 70 in their professional lives. Ambition can be a driver 58.61 in every industry, but it is like oxygen for an industry 60 that exists in permanent innovation: the ICT industry. 50 Innovation is fueled by ambition. By the ambition of 40 people, young and experienced professionals. This 30 mentality is ubiquitous in the Hungarian STEM sector and – along with the unique geopolitical position of the 20 country – can serve as the foundation of Hungary’s 10 leading role in the economy of Central Europe.” Proficiency English EF Source: 2017 Index, CZECH SLOVAK REPUBLIC REPUBLIC BULGARIA HUNGARY Invest in Hungary 57

HUMAN CAPITAL SIEMENS TRAINING CENTRE Supporting the professional development of next VOCATIONAL EDUCATION In the school year 2016/2017, generations is an important part of Siemens’ cor- the number of students who were porate culture. The company started its vocational engaged in vocational dual training program about 20 years ago and opened VOCATIONAL TRAINING training was around the Siemens Training Centre in Hungary in 2012. The 53,000. training system was set up following the example IN THE SERVICE OF THE of the successful training programme of professionals in Germany, while also considering the local HUNGARIAN ECONOMY market conditions and educational system – making Siemens one of the first ones to provide professional training opportunities for talented apprentices.

In the academic year ACTIONS TAKEN 2017/2018, the number AND RESULTS ACHIEVED of students engaged in dual education at • The training structure is oriented by professional tertiary level amounted framework-related decisions to around • More transparent, more meaningful accredited (OKJ) training courses which facilitate wider employability 1,500. • A practice-oriented system of examination which sets comprehensive knowledge as a requirement, which is simpler than before and is of shorter duration • Technical school scholarships promote mastering shortage occupations • Conditions for practical training have improved (development tenders) and training opportunities OPEL KNOWLEDGE CENTRE have increased (more corporate workshops) Opel's training centre established with a EUR 1.7 million – that is, half a billion HUF – investment ensures a simultaneous professional training of approximately OBJECTIVES 100 students. Furthermore, additional 70-80 students 1. To serve the needs of the economy: to train more participating in the dual training will take part in certain skilled workers and technicians partial trainings in the Szentgotthárd-based centre. 2. Strengthening the dual training: practice-oriented The study workshops in the new training centre have knowledge, reduction of drop-outs due to "work" been designed to train automatic and mechatronic 3. Increasing the attractiveness (prestige) of vocational technicians, machinebased cutting technicians and training: Encouraging more students to choose electricians. In the same place the practical training vocational training in the future base has been set up for the Szombathely-based dual 4. Improving the vocational training system: improving mechanical engineer training where the students can the quality, effectiveness and efficiency of the training master engineering skills. Invest in Hungary 59

REFERENCES Hungary WE ARE ranked WORLDWIDE RANKINGS 5th PROUD BASED ON VALUE OF NEW JOBS CREATED according to IBM Global OF OUR Location Trends 2017 REFERENCES

Debrecen, Kecskemét and Székesfehérvár among the European investment locations of the future, according to fDi Magazine

fDi Magazine, investment issue of the Finan- cial Times Group with high prestige in investor circles, has published again its bi-yearly "European Cities and Regions of the Future", in he Hungarian investment environment which it gathers and ranks the most important has received a prestigious international investment locations of Europe according to Trecognition: based on the remarkable IBM pre-defined criteria. It is a gladsome tendency HAS BEEN AWARDED BY SITE Global Location Trends 2017 report, from among the that in addition to Budapest and the Central SELECTION MAGAZINE three most important categories, in two Hungary Hungary region that were selected to the latest WITH THE TOP IPA AWARD ranked among the world's top 10. According to the edition, three other cities have been recom- FOR EASTERN EUROPE report, thanks to foreign direct investments (FDI), mended to the focus of the investors as new AND CENTRAL ASIA 18,900 new jobs are being created in Hungary based players: Debrecen, Kecskemét and Székesfe- IN 2018. on 2016 investor decisions, which is the 9th best hérvár. result in the world per inhabitants. However, what is As it can be concluded from the results, the even more important that Hungary ranked 5th based Hungarian investment environment awaits on value of new jobs created, ahead of countries, in new investors and re-investors alike with con- addition to the competitors in the region, such as sistently high service standards. Switzerland, Japan or Sweden. Invest in Hungary 61

THEY HAVE ALREADY REFERENCES Minas Agelidis COMPANIES CHOSEN US General Manager IN 2017 Coca-Cola HBC Hungary

"Excellent people in an excellent business destination - this is what Hungary means to our company. We are committed to Hungary since 1968 having invested HUF 120 billion only in the last two decades in our production capabilities. The production, transportation and sales of our drinks – including our employees– provide jobs for nearly 13,000 people and two-thirds of the raw materials used for the production of beverages are provided by local suppliers. We export products to 25 countries so Hungary has become a major regional hub in the Coca-Cola HBC group. And we are determined to go even further…" Invest in Hungary 63

HUNGARIAN INVESTMENT HIPA PROMOTION AGENCY (HIPA) INVESTMENT SITES

IPA operates an internal database of investment sites in Hungary. One of the most comprehen- 120 Hsive resources of its kind, the HIPA database is INDUSTRIAL part of the information package for potential investors. The Investment Sites Database, which lists more PARK than 1150 green- and brownfield sites, industrial parks and offices throughout Hungary, simplifies the task of matching investors’ needs to potential locations. Searchable by size, location, available infrastructure and incentives, the database is an excellent starting 250 point for any prospective investor. OFFICES

ungarian Investment Promotion Agency (HIPA) is the national investment promotion 800 Horganisation of Hungary governed by the GREEN- AND Ministry of Foreign Affairs and Trade. We contribute to the economic development of the BROWNFIELD SITES country by promoting Hungary as an ideal location for investments and by providing management consultancy services to investors and prospective investors. In the framework of our policy advisory activities we mediate between business and government and collect company feedback in order to prepare policy proposals to further improve the business environment. We are also responsible for Grzegorz Buchal the government incentives for investments and Managing Director work as the managing body of the VIP cash subsidy Opel Szentgotthárd system based on individual government decisions. We provide management consultancy services in the “HIPA is supporting us in each and every aspect. fields of location selection, supplier development and I have never seen so enthusiastic people who are mergers and acquisitions in a one-stop-shop service making so many things to support businesses in model on a free of charge basis. Hungary.” Invest in Hungary 65

HIPA PROFESSIONAL ASSISTANCE

HOW DO WE SUPPORT YOUR INVESTMENT PROJECT?

BEFORE AFTER YOU MAKE A DECISION YOU HAVE CHOSEN WE OFFER YOU…. HUNGARY

….one-stop-shop ….tailor-made incentive …. location search We are open to your We support your management offers and information & evaluation feedback and offer mediation further expansion consultancy services packages on the + between government and plans. to address your business environment, site visits. and business based business needs. labour market, tax on your inputs. regulations, etc.

PLEASE CONTACT US ….meetings with ….reference visits ….assistance with Address: 1055 Budapest, Honvéd utca 20. HR & real estate agencies, at companies that are your incentive Customer service: [email protected] law firms and already established application. Telephone: +36 1 872 6520 other consultants in Hungary. Web: www.hipa.hu based on your needs. Invest in Hungary 67

HIPA SECTORS Did you know that… …Hungary has close proximity and easy access to Western and Eastern

European markets? LOGISTICS

Did you know that… ...Hungary has become a major player in the CEE region in the fields Did you know that… on autonomous driving related R&D …100% GMO-free ingredients are available FOOD AUTOMOTIVE activities and e-mobility? in Hungary? INDUSTRY

Did you know that… ...key industry players like Samsung SDI, Did you know that… SK Innovation or GS Yuasa have chosen …Hungary has 100 years of pharma LIFE Hungary as their European manufacturing innovation and expertise? SCIENCES

ELECTRONICS hub for EV batteries?

Did you know that… Did you know that… ...Hungary provides favourable business ...you can rely on globally acknowledged environment for innovative companies in ICT Hungarian talents at a reasonable cost? medical technology? MEDICAL TECHNOLOGY

Did you know that… ...Hungary has significant growth potential in renewable energy utilization based on huge untapped renewable Did you know that… ENERGY resources? RENEWABLE ...apart from Budapest, cities with

BSC significant university background have also potential? Invest in Hungary 69

HIPA SUPPLIER DEVELOPMENT

FOR INTEGRATORS / SUPPLIERS

OUR SERVICES B2B, CERTIFIED SUPPLIER PUBLICATIONS, FOR SUPPLIER FORUM DATABASE MARKET = = INFORMATION INTEGRATORS Personal encounter Online, interactive = between potential certified supplier Information about suppliers database and virtual the current Hungarian and producers marketplace supplier base

SUPPLIER PARTNERSHIP DEVELOPMENT LISTS AGREEMENT OF ACTUAL = = SUPPLIERS Filtering Cooperations and = SUPPLIER LISTS common projects to Training for the by company develop Hungarian Hungarian suppliers, requests suppliers and potential suppliers FOR SUPPLIERS

UNIVERSITY AND EDUCATION, EXHIBITIONS R&D COOPERATION TRAINING = = = Appearance on Supporting Professional trainings Hungarian and educational and R&D in several fields international cooperation between (efficiency trainings, exhibitions and universities and benchmarking fairs suppliers techniques, automotive standards) Invest in Hungary 71

HIPA M&A advisory In case of any interest in the projects, HIPA can assist the investors in organizing meetings with project owners, give more detailed information on the selected sector and the specific project. Besides the pre-audited project portfolio, HIPA is also ready to identify potential target companies to satisfy buy-side M&A requests of investors.

HIPA also facilitates the successful preparation and presentation of the projects, by constant consultation with the project owners and he Hungarian Investment Promotion organization of specialized investment courses. Agency aims to link the potential Tfinancial and strategic investors with For further information, business plans and Hungarian projects in need of investment. contacts to the projects owners, please contact HIPA handles a continuously growing our colleagues: [email protected] database, which currently consists of more than 50 investment projects the following industrial sectors in total value of around EUR 1 billion

agriculture and food industry

manufacturing

green industry

innovation

real estate development.

This collection offers high quality, prescreened, legally transparent and ready to launch investment opportunities for potential investors available at our deal-sharing platform of www.investhipa.hu. Invest in Hungary 73

INCENTIVES WE CAN OFFER OVERVIEW INCENTIVES

The maximum aid intensity is 50% in Northern Hungary, Northern Great Plain, Southern Great + Plain and Southern Transdanubia; 25% in Western TAX Transdanubia; 35% in the Central Transdanubia incentives region; and 0%, 20% or 35% in the Central Hungarian + region. Parts of Central Hungary are ineligible to receive any funding because they are much CASH closer to the EU average in development terms. subsidies + CENTRAL HUNGARY, Budapest LAND free / reduced 0 / 20 / 35% + Miskolc NORTHERN LOANS 35 % HUNGARY low-interest 25 % Győr Debrecen CENTRAL NORTHERN TRANSDANUBIA GREAT PLAIN WESTERN Székesfehérvár 50 % TRANS- DANUBIA Different preferential SOUTHERN terms for eligibility SOUTHERN GREAT PLAIN TAX ALLOWANCES TRANSDANUBIA ne of Hungary’s competitive advan- Szeged tages over other countries in the There is a wide range of tax allowances THE MAXIMUM AVAILABLE Pécs region is the Government’s strong for new investments and R&D. Hungary AMOUNTS OF REGIONAL O INCENTIVES ARE BASED ON A commitment to streamlining business pro- provides tax exemption on holding REGIONAL AID INTENSITY MAP. cesses and increasing the competitiveness structures, capital gains on shares Different preferential terms for eligibility of SMEs and large firms in Hungary. To help and intellectual property under certain achieve this, we offer wide-ranging incen- conditions are tax free, and a 50% tax tives – both refundable and non-refundable allowance is applicable on royalty The maximum available aid intensity decreases – to facilitate foreign direct investments and incomes. There is no withholding tax if the investment is a large investment (i.e. reinvestments by local enterprises. The main on dividends, interest and royalty exceeds EUR 50 million): 50% of the maximum types of incentives are cash subsidies (either paid by a Hungarian company to a aid intensity determined in the regional aid from the Hungarian Government or from EU foreign company. Hungary has a wide map is available for that part of the investment Funds), tax incentives, low-interest loans, international treaty network with more between EUR 50 million and EUR 100 million, and free or reduced price lands. than 80 double tax treaties. with 34% of the maximum aid intensity for that part of the investment beyond EUR 100 million. Invest in Hungary 75

INCENTIVES OVERVIEW

46 34 When calculating the maximum available amount of regional incentives, all regional REGIONAL AID INTENSITY MAP incentives – including cash subsidies, IN CENTRAL HUNGARY FOR THE development tax allowance, etc. – must be PERIOD 2014-2020 taken into account. Invest in Hungary 77

INCENTIVES TAX INCENTIVES

WE CAN OFFER DEVELOPMENT TAX INCENTIVES

ach development tax allowance may be TYPE claimed for a 13-year period (beginning tax allowance for post-investment period Eonce the development is completed) in Corporate Income Tax (“CIT”) returns AMOUNT OF SUBSIDY within a maximum period of 16 years from exemption for 80% of the corporate tax the original application for the incentive. payable for 13 years following installation. In any given tax year, the tax incentive is available for up to 80% of the tax payable, CONDITIONS but in total up to the state aid intensity ceiling. investment volume minimum HUF 3 B (EUR 11.3 M), minimum 50 new jobs OR Applications for tax incentives must be HUF 1 B (EUR 3.7 M) investment volume submitted to the Ministry of Finance, and the and 25 new jobs in preferred regions Hungarian Government has the right to grant permission if the aggregate eligible costs of APPLICATION the investment exceed EUR 100 million. If the depending on investment volume request or investment is below this threshold, taxpayers application needs to be submitted need only notify the Ministry of Finance before starting the investment. PROVIDER OF INCENTIVE Ministry of Finance Invest in Hungary 79

INCENTIVES NON-REFUNDABLE CASH SUBSIDIES

WE CAN OFFER SUBSIDY BASED ON INDIVIDUAL GOVERNMENT DECISION

he Hungarian Government considers asset, technology-intensive (e.g. purchasing assets, construction work, etc.) job creation, and R&D investments as priorities in Tthe field of investment promotion by providing VIP cash subsidy for such projects. A VIP cash subsidy (subsidy based on individual government decision) may be granted under current legislation based on Government Decree No. 210/2014. (VIII.27.) on the utilisation of investment incentive targeted appropriations.

The amount of the subsidy is influenced by the number of jobs created by the implementation of the investment, and the development of the region where the investment will be implemented. Invest in Hungary 81

INCENTIVES VIP CASH SUBSIDY NON-REFUNDABLE CASH SUBSIDIES ELIGIBILITY FOR ASSET INVESTMENT

WE CAN OFFER SUBSIDIES BASED ON ASSET INVESTMENT

In order to be authorized for a VIP cash Bihar, Heves, Borsod-Abaúj-Zemplén) the compared to its previously performed subsidy, investors shall create at least 50 investment should reach at least EUR 10 activities as a result of the investment. new jobs in all regions of Hungary which can million in volume, creating 50 new jobs. Eligible costs for an asset investment include be subsidized, in case of investments aiming In developed counties (Győr-Moson-Sopron, the purchase of the plot, construction at the creation or the expansion of Regional Komárom-Esztergom, Fejér, Pest) the costs or building rental fee (during the Shared Service Centres. investment should reach at least EUR 20 implementation period), infrastructural In case of any type of investment in the most million in volume, creating 100 new jobs. costs, the purchase of new equipment preferred counties (Nógrád, Szabolcs-Szat- Please note that investments implemented and machines, intangible assets, etc. már-Bereg, Békés) the investment should by large enterprises can only be subsidized The investment period is determined by reach at least EUR 5 million in volume, in Central Hungarian region, if the invest- the investor, yet is usually less than five creating 50 new jobs. ment is located in an area which can be years. The monitoring period, starting In preferred counties (Vas, Zala, Veszprém, subsidized and the investor sets up a new from the completion of the investment, Somogy, Baranya, Tolna, Bács-Kiskun, establishment or expands the activity of the is five years in the case of large companies Csongrád, Jász-Nagykun-Szolnok, Hajdú- company with a fundamentally new activity and three years in the case of SMEs. Invest in Hungary 83

INCENTIVES NON-REFUNDABLE CASH SUBSIDIES

VIP CASH SUBSIDY ELIGIBILITY FOR JOB CREATION INVESTMENT

≥100 new employees

≥50 new employees WE CAN OFFER SUBSIDIES BASED ON JOB CREATION

The eligibility criteria for a VIP cash subsidy cost of the investment shall reach at least ment is located in an area which can be subsi- on a job creation basis are as follows: in case EUR 10 million. dized and the investor sets up a new establish- of investments aimed at the creation or In Fejér, Komárom-Esztergom and Győr- ment or expands the activity of the company the expansion of Regional Shared Service Moson-Sopron counties or in the areas of with a fundamentally new activity compared to Centres, investors shall create at least 50 new Central Hungarian region which can be its previously performed activities as a result of jobs, in all regions of Hungary which can be subsidized, the condition of eligibility is the the investment. subsidized. creation of at least 100 new jobs and the The eligible costs are 24 months of salary and In the region of Northern Hungary, eligible cost of the investment shall be at contribution towards the newly hired within Northern Great Plain, Southern Great Plain least EUR 10 million. a three-year-period. These costs must reach a and Southern Transdanubia and in Vas, Please note that investments implemented minimum volume of EUR 10 million (except in the Veszprém and Zala counties, investors shall by large enterprises can only be subsidized case of investments aimed at the creation or the create at least 50 new jobs and the eligible in Central Hungarian region, if the invest- expansion of Regional Business Service Centres). Invest in Hungary 85

INCENTIVES VIP CASH SUBSIDY NON-REFUNDABLE CASH SUBSIDIES ELIGIBILITY FOR TECHNOLOGY- INTENSIVE INVESTMENT

20 million eur

WE CAN OFFER SUBSIDIES BASED ON TECHNOLOGY-INTENSIVE INVESTMENT

The role of the Hungarian economy has started The aim of the new form of VIP cash grant is to support capacity expansion and to move from “Made in Hungary” towards technology-intensive investments without the undertaking of creating new jobs. “Invented in Hungary” with the aim of becoming Those companies who already have 250 employees in Hungary and consider the innovation center of Europe. From the technology-intensive investment have the opportunity to benefit from VIP cash grant beginning of 2017, favorable changes have been up to 3/4 of the maximum regional aid intensity of the region (20%/25%/35%/50%). introduced in the non-refundable VIP cash grant system in compliance with the requirements of The eligibility criteria for a VIP cash subsidy based on technology-intensive invest- investors with the purpose of supporting R&D and ment is to invest at least EUR 20 million and to achieve 30% increase of revenue technology-intensive investments. and/or wage costs within a four-year-long period. Invest in Hungary 87

INCENTIVES VIP CASH SUBSIDY NON-REFUNDABLE CASH SUBSIDIES ELIGIBILITY FOR R&D PROJECTS

3 million eur

25 new employees

WE CAN OFFER SUBSIDIES FOR R&D PROJECTS

One of the main objectives of the post-financed cash grant In order to be authorized for a VIP cash subsidy, investors shall reach at least system is the promotion of R&D activity (industrial research and EUR 3 million of R&D project(s)* related expenditure during a minimum one experimental development) of large enterprises and the creation of and maximum three-year-long period and increase the R&D headcount by R&D centers in Hungary in accordance with the aim of increasing 25 employees. Eligible costs may be the costs of the R&D project(s) to the emphasis on “Invented in Hungary” type of investments. This extent and for the period of the project(s), such as personnel related costs, provides opportunity to grant aid for R&D projects everywhere in depreciation of the assets or material related costs. the country up to the maximum aid intensity of 25%.

*based on the qualification of Hungarian Intellectual Property Office Invest in Hungary 89

INCENTIVES INCENTIVES TRAINING SUBSIDIES SUBSIDIES FROM EU FUNDS

SUBSIDIES FROM EU FUNDS

WE CAN OFFER wide range of tender calls are development, job creation and financing of TRAINING SUBSIDY available from EU Funds for human resources costs. The conditions for A which investments of less than applying, the timing, and the total amount he Hungarian Government also offers a VIP subsidy opportunity for the EUR 10 million can also qualify. As of the subsidy available vary from tender training of employees. The subsidy is available to investors creating at a member of the European Union Hungary to tender. The first relevant tenders for the Tleast 50 new jobs. This subsidy is provided for trainings with maximum aid has access to EU funds for a number current seven financial years in the forms intensity of 50%. The aid intensity can be increased further in the case of small- of development goals, such as asset of both refundable and non-refundable and medium-sized enterprises and for training of disabled or disadvantaged acquisition, infrastructural development, incentives were announced in the autumn workers. Please note that this subsidy may be granted in all regions of Hungary. new construction, renovation, service of 2014.