INVEST OINN © Published on behalf of N the Hungarian Investment INVEST I Promotion Agency, 2016 (HIPA) HUNGARY Indeed, Hungary is a bustling business The Hungarian Investment Promotion Dear Reader, hub situated right at the very heart of Agency (HIPA) is committed to promoting Europe; physically and in historical, Hungary as a prime investment location fter the historic political changes geographical, cultural and economic and a reliable business partner. HIPA of 1989-90, Hungary’s business terms, all destinations are within easy published this brochure to introduce Aenvironment is now close to maturity. reach. As a full European Union member, the Hungarian business arena, its many With GDP growth reaching 2.9% and 7.5% businesses settling here join the EU investment opportunities, and the main year-on-year industrial growth in 2015, market of more than 500 million people. incentives the government offers to attract the economy has weathered the global FDI. The booklet provides an overview recession and it is one the most dynamic Hungary’s geography is a natural gift, one of the legal environment, available costs, economies in Central Europe. that have learnt to use well skills, infrastructure and real estate, through their indomitable resourcefulness, introduces key industrial and service Over the last 25 years, scores of inter- flexibility and creativity. sectors, and showcases success stories national companies have based their from multinationals that have moved key manufacturing and service operations, The country offers tangible investment processes to the heart of Europe. and in some cases, European HQs and benefits to all businesses: SMEs wishing to R&D centres in Hungary, bringing in get closer to multinational buyers; global more than € 84 billion in FDI. Forty-five firms seeking safe, reliable operational Now, it’s your turn. of the world’s 80 largest multinationals, and distribution centres or shared services Just click to explore the opportunities that and many of their SME suppliers, have facilities; high-tech enterprises looking Hungary can offer your business. established a long-term presence here, to outsource clinical research, software benefiting from the advantageous development or other R&D activities; and location, a safe legal environment, an manufacturers that require access to the advanced business infrastructure, and markets of Eastern and Southeast Europe.

Róbert Ésik, President, HIPA a committed labour force. 8 ABOUT HUNGARY

12 INFRASTRUCTURE 12 ON LAND, WATER & AIR / 14 LOGISTICS / 16 TELECOMMUNICATION 18 PAN-EUROPEAN CORRIDORS

20 BUSINESS ENVIRONMENT 20 OPEN ECONOMY / 22 GOVERNMENT’S MEASURES / 24 COMPETITIVE TAX SYSTEM 26 BANKING SYSTEM / 28 COMPANY ESTABLISHMENT / 30 HUMAN CAPITAL 32 LEADING UNIVERSITIES / 34 VOCATIONAL EDUCATION

38 REFERENCES 38 FDI RANKING / 40 COMPANIES

44 QUALITY OF LIFE

HUNGARIAN INVESTMENT 48 50 PROFESSIONAL ASSISTANCE PROMOTION AGENCY (HIPA) 52 SECTORS / 54 INVESTMENT SITES / 56 SUPPLIER DEVELOPMENT 58 HUNGARIAN INVESTMENT PROJECTS (HIP)

60 INCENTIVES 64 TAX INCENTIVES / 66 NON-REFUNDABLE CASH SUBSIDIES 72 TRAINING SUBSIDIES / 73 SUBSIDIES FROM EU FUNDS Invest in Hungary 9

ABOUT HUNGARY YOU CAN KEY FIGURES MAKE THE MOST OF THE COUNTRY’S STRATEGIC LOCATION: LABOUR POOL STRUCTURE EASY ACCESS TO BOTH WESTERN AND EASTERN POPULATION EUROPEAN MARKETS 9,855,571 SERVICES MANUFACTURING CONSTRUCTION AGRICULTURE OTHER 64.8% 21.4% 6.5% 4.8% 2.7% Source: HCSO, 2014

STUDENTS IN TERTIARY EDUCATION

GDP GDP TEACHER TRAINING OTHER SERVICES GROWTH RATE PER CAPITA & EDUCATION 2.9% € 11,000 HEALTH 2015, HCSO 2015, Eurostat & SOCIAL SERVICES ARTS & HUMANITIES 7% 8% AGRICULTURE 11% & VETERINARY 9% 3% CURRENCY €1 FORINT = 309.9 HUF TECHNICAL (2015) (HUF) ENGINEERING 20% 35.5% SOCIAL SCIENCES, 7% BUSINESS & LAW

CORPORATE VAT PROFIT TAX STANDARD MATHEMATICS, COMPUTING 10% / 19% 0-27% & NATURAL SCIENCES Source: EEMMISource: Invest in Hungary 11

ABOUT HUNGARY “We decided to establish a production unit in Hungary 23 years ago. Since then AUDI KEY FIGURES MOTOR Ltd. has become the biggest engine factory and one of the most modern car production plants of the world. It employs 11,411 people. The central location of Hungary, the advanced infrastructure, the stable political and economic conditions of Hungary as an industrial site and skilled workforce all contribute to the success of our company. We are at home in Hungary." Peter Kössler, Chairman of the Board of Man- agement, AUDI HUNGARIA MOTOR Ltd.

GDP growth 2.9% (2015, HCSO)

Unemployment Average GDP GDP / capita Inward FDI Industrial Budget rate gross earnings (PPS) (PPS) Inflation stock production balance growth: 6.8% € 800 € 183,989 18,648 -0.1% 78% -1.9% (of full-time billion (% of GDP) 7.5% (% of GDP) employees)

(2015, HCSO) (2015, HCSO) (2014, HCSO*) (2014, HCSO) (2015, HCSO) (2014, MNB**) (2015, HCSO) (2015, HCSO)

*HCSO = Hungarian Central Statistical Office **MNB = The National Bank of Hungary Invest in Hungary 13

INFRASTRUCTURE YOU CAN ON LAND, WATER & AIR BENEFIT FROM HIGHLY DEVELOPED LOGISTICS AND TELECOMS The country’s main international airport is in ; the city of , Győr (Pér), INFRASTRUCTURE Pécs and the of Sármellék at Lake Balaton also operate international airports.

The fact that Hungary has the third highest The country has also an extensive railway road density in Europe after Belgium and network of 7,542 km. Scheduled block trains the Netherlands is a significant competitive run to Europe’s main seaports. Záhony, the advantage. The total length of the Hungar- Hungarian border city plays a significant ian national public road network is close to role in the East-West rail transport: this 32,000 km including more than 1,680 km The -Rhine-Main Canal and the is where the European standard gauge of expressways. Danube–Black Sea Canal connect Hungary railway network meets the eastern broad to Rotterdam and Constanta via Western gauge system, and the transfer takes Europe’s industrial heartland. approximately 19 to 22 days to China. LOGISTICS INFRASTRUCTURE H and its long-established logistics industry. infrastructure transport superb from Hungary’s outstanding efficiency and added value derived from the benefit can Companies SEE. CIS and CEE, are nearby, of markets growing ports are as the European of Europe. Major access toeasy parts all System) enabling Traffic Management corridors, ERTMS (European two Rail and Pan-European (TEN-T) of four crossroads at the is located and Transport Pan-European Network of the part regional distribution centre. Hungary is an integral a as important it increasingly –makes region

the major transport junctions in the CEE of role well its –as one as as continent the ungary’s strategic position in the heart of

THEY ARE AMONG THOSE WHO HAVE ALREADY CHOSEN US DB SCHENKER DB LAGERMAX GEFCO CARGO-PARTNER VERSTEIJNEN LOGISTICS VERSTEIJNEN

/ GEODIS Coca-Cola HBC Hungary Minas Agelidis to even further…” go mined we are And deter group. Coca-Cola the Hellenic in hub regional a major become has Hungary so tries to 23 coun products We export by suppliers. local are provided beverages of production for the used raw two-thirds the of materials and people 13,000 for nearly employees– jobs provide our – including production, transportation and sales of our drinks The capabilities. production our in decades two last the in only billion 110 invested HUF than more since 1968 having We to are committed Hungary company. to our means -this Hungary is what tion “Excellent people in an excellent business destina

/ LOGWIN

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DHL /

GONDRAND / DACHSER , General Manager , General

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Invest in Hungary /

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GEBRÜDER WEISS GEBRÜDER / DAMCO KUEHNE+NAGEL / /PROLOGIS

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Invest in Hungary 17

INFRASTRUCTURE TELECOMMUNICATION

100% 3G & 4G coverage services Did you know that… ungary has a highly developed tele- viders and mobile network providers in Hungary’s mobile communications market, …the famous online presentation tool, Prezi is communications system – GSM Hungary. The telecoms market, particu- like that of its Central European counter- a Hungarian invention and has already more H900/1,800 MHz mobile frequen- larly the mobile and broadband sectors, parts, is maturing. Services are available from than 50 million users worldwide? cies providing 100% physical coverage, became more dynamic after Hungary’s three operators, all of which are majority or and widespread 3G mobile coverage. 2004 EU accession: membership saw an fully owned by Western European opera- The telecoms market is fully liberalised: injection of funding as well as increased tors. Mobile data usage is increasingly there are numerous internet service pro- regulatory oversight. popular: all three operators have launched 3G & 4G services and a variety of mobile content and applications is available. Invest in Hungary 19

INFRASTRUCTURE PAN-EUROPEAN CORRIDORS

MOTORWAYS IN HUNGARY COMMERCIAL CORRIDORS V M1: Budapest – AUT AND INFRASTRUCTURE IV M3: Budapest – RO/UKR/SK IN HUNGARY VII M5: Budapest – SRB M6: Budapest – Pécs IV M7: Budapest – SLO

V VII X

PAN-EUROPEAN CORRIDORS CROSSING HUNGARY

IV: Dresden – Prague – Vienna – – Győr – Budapest – Arad – Bucharest – Sofia – Thessaloniki – Istanbul V: Venice – Trieste – Ljubljana – Maribor – Budapest – Uzhhorod – Lviv – Kiev VII: Vienna – Bratislava – Budapest – Belgrade – the Black Sea X: Salzburg – Ljubljana – Zagreb – Beograd – Niš – Skopje – Veles – Thessaloniki

LEGEND Did you know that…? existing planned …Hungary lies at the cross- roads of four Pan-European transportation corridors? Invest in Hungary 21

BUSINESS ENVIRONMENT OPEN ECONOMY ungary is an open economy and particular emphasis is placed on encouraging foreign Hinvestment. Partnership with potential investors is considered a national priority; special attention is paid to the needs of companies already settled in Hungary and to the further improvement of the business climate. Inward FDI stock amounted to 78% of GDP (at the end of 2014), the highest ratio in the region.

YOU CAN 78% 65% COUNT ON THE 57% 41% GOVERNMENT’S 40% COMMITMENT 27% Inward FDI stock TO FURTHER in 2014 IMPROVE THE (percentage of GDP) HUNGARY CZECH POLAND SLOVENIA Source: wiiw FDI BUSINESS CLIMATE REPUBLIC Database

Invest in Hungary 23

...has reduced the ABOUTBUSINESS HUNGARY ENVIRONMENT CORPORATE TAX RATE to the lowest level BUSINESSGOVERNMENT’S ENVIRONMENT MEASURES in the CEE region.

…introduced a new act ...has reduced the on a practice based PERSONAL DUAL TRAINING IN ORDER INCOME TAX in favour of business TO IMPROVE THE to 15%. needs. BUSINESS CLIMATE, THE HUNGARIAN …created one of GOVERNMENT… the most competitive FLEXIBLE LABOUR CODEs in Europe (in favour of employers).

...has entered into

INVESTMENTS IN FOCUS INVESTMENTS STRATEGIC PARTNERSHIP AGREEMENTS with numerous companies, giving fast access to the government via workshops and regular consultations. …has introduced …has doubled a FOREIGN-TRADE the amount of FOCUSED foreign policy financial support for to attract FDI. R&D ACTIVITIES in the 2016-2020 period. Invest in Hungary 25

BUSINESS ENVIRONMENT COMPETITIVE TAX SYSTEM

CORPORATE TAX VAT PERSONAL INCOME TAX 10/19% 27/18/5/0% & SOCIAL SECURITY SYSTEM The general corporate income tax rate The general VAT rate is 27%, reduced rates is progressive in Hungary. The tax base are 18% (e.g. bread, milk, accommodation up to HUF 500 million (cca. € 1,620,000) services) and 5% (e.g. journals, books, is taxed at 10%; above this amount the medicines and central heating). rate is 19%. VAT-exempt services are mainly banking MINIMUM WAGE AVERAGE WAGE** services, insurance, investment-related services, sale and rental of real estate. OTHER DIRECT TAXES EUR* % EUR % TOTAL WAGE COSTS 457 128.5 1027 128.5 2/0.3% Vocational training contribution 5 1.5 12 1.5 Local business tax is maximum 2%, Social contribution tax 96 27.0 216 27.0 the innovation contribution is 0.3%. GROSS SALARY 356 100.0 800 100.0 Personal income tax 53 15.0 120 15.0 Employees’ contributions 66 18.5 148 18.5 NET SALARY 237 66.5 532 66.5

* Exchange rate: 1 € = 311.59 HUF ** Exchange rate: 1 € = 309.9 HUF Source: HCSO Invest in Hungary 27

BUSINESS ENVIRONMENT BANKING SYSTEM EXIMBANK + MEHIB

Tool for providing Hungary’s export economic-policy incentive credit agencies he banking system includes 39 banks, Supporting Hungarian 9 specialised credit institutions and exporting enterprises in facilitating T82 co-operative credit institutions. the retention of jobs, growth in Other than the publicly listed OTP Bank employment and expansion of Plc the most important commercial banks 39 Regulated by the legislative Hungary’s export capacities Basic objective of facilitating are subsidiaries or branch offices of major BANKS frameworks of the OECD the sale of Hungarian goods and foreign banks. and the EU services in foreign markets

Since the beginning of the financial crisis the Hungarian Government has found a number of solutions aimed at boosting lending; the rate of public guarantees provided by the State is high by interna- 9 tional standards. As part of its Economy SPECIALISED Boosting Bank Guarantee Programme, CREDIT primarily with a view to promoting the INSTITUTIONS activity of the production sector, the MFB (Hungarian Development Bank) provides bank guarantees for company HUF facilities/loans – especially working capital loans – with a term of more than one year in the interest of improving their competi- The objective of the Hungarian Export-Import The state-owned Eximbank and MEHIB tiveness and promoting lending. Small- and 82 Bank Plc. (Eximbank) and the Hungarian perform the tasks of Hungary’s export medium-sized businesses constitute the Export Credit Insurance Plc. (MEHIB) is to credit agency, which are regulated by the CO-OPERATIVE primary target group of the Bank Guarantee CREDIT serve Hungarian exporters through the legislative frameworks of the OECD and the Programme and also that of a recently INSTITUTIONS provision of effective financing and insurance EU, with the basic objective of facilitating introduced zero interest bearing National facilities. Acting as a tool for providing the sale of Hungarian goods and services Bank refinancing programme, the Funding economic-policy incentive, the mission of in foreign markets. The Bank and the for Growth Scheme. Eximbank and MEHIB is to support Hungarian Insurer, which operate within an integrated exporting enterprises in facilitating the framework, carry out their duties with 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 29

BUSINESS ENVIRONMENT COMPANY ESTABLISHMENT

DRAFTING OPENING THE SUBMITTING THE DOCUMENTS BANK ACCOUNT THE APPLICATION REGISTRATION 1. 2. 3. 4. CONGRATULATIONS is necessary for company FOR REGISTRATION TO THE with the tax administration ON YOUR formation by an attorney HUNGARIAN COURT OF REGISTRY and the statistical office NEW COMPANY! (the use of a legal repre- sentative and the coun- The company is assigned a tax tersigning of certain doc- number by the tax administration. uments by an attorney is The Court of Registry decides on the mandatory in company registration of the company within proceedings). one business day after the issuance of the tax number in 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 NUMBER OF DAYS TO START A BUSINESS to the fact, however, that in case the tax administration does not notify the 5 6 8.5 18.5 19.5 30 Court of Registry of the tax number days days days days days days within one business day, then the HUNGARY SLOVENIA ROMANIA SLOVAKIA CZECH REPUBLIC POLAND proceedings have to be suspended, and therefore, the company registration SOURCE: World Economic Forum: proceedings may require more time. The Global Competitiveness Report 2014-2015 Invest in Hungary 31

BUSINESS ENVIRONMENT HUMAN CAPITAL RELY ON GLOBALLY From 2016 the statuory ACKNOWLEDGED gross minimum wage in HUMAN CAPITAL AT Hungary is cca €356 A REASONABLE COST = 111,000 HUF per month.

The average earnings was around cca €800 = 247,787 HUF per month in 2015.

250 212 200 NO. OF INSTITUTIONS WAGE ADJUSTED Undergraduates (BA/BSc) LABOUR 150 and Postgraduates (MA/MSc) 67 PRODUCTIVITY (2014/2015) apparent labour 100 271,480 Source: HCSO productivity by he Hungarian labour force is well qualified and average personal 50 of which 203,576 are full-time costs, Manufacturing cost effective, which increases the country’s Industry, 2012 (%) (Tertiary education in Hungary Source: Eurostat international competitiveness. The country has (source: EUROSTAT)

2014/2015) T Italy Spain several famous and practice-oriented universities, Latvia France Greece Cyprus Poland Croatia Austria Estonia Finland Sweden Belgium Slovakia Bulgaria Slovenia Portugal Romania Denmark Germany each playing a notable role in the education of Lithuania Luxemburg Netherlands Hungary

the workforce. A large number of high quality Republic Czech United Kingdom United research institutions are testament to Hungary’s traditional strengths in science and technology. Invest in Hungary 33

BUSINESS ENVIRONMENT 4 UNIVERSITIES LEADING UNIVERSITIES in Hungary appear in the respected OTHER MAJOR UNIVERSITIES QS World University Rankings (which claim to be the most widely read university comparison of the world’s • Budapest University of Technology top 800 universities). and Economics • Central European University University of • Pázmány Péter Catholic University () • Semmelweis University (the oldest medical school in the country) • Szent István University, Gödöllő • University of Miskolc SOUTHERN • University of Kaposvár • University of Pécs Eötvös Loránd University (Budapest) • Széchenyi István University, Győr • University of West Hungary • University of Pannonia, Veszprém

BOLOGNA PROCESS University of Debrecen Following the Bologna Process, which aims () to achieve pan-European comparability in the standards and quality of higher education qualifications, universities in Hungary offer three levels of degree: 1. BACHELOR 2. MASTER 3. DOCTORATE

Corvinus University Bachelor’s programs typically last three to four years, master’s programs one or (Budapest) two, and doctorate programs three years. In some subjects, it is possible to complete a single five or six year course, combining the bachelor’s and master’s degrees. (Source: www.topuniversities.com) Invest in Hungary 35

BUSINESS ENVIRONMENT SIEMENS TRAINING CENTRE Siemens' own internal training system which trains VOCATIONAL EDUCATION labour supply not only for itself – there are qualified and recognised experts working for other compa- nies who were trained by Siemens – was established VOCATIONAL TRAINING in Hungary in 2012. Every year Siemens invests approximately EUR 167 million in the programme IN THE SERVICE OF THE to continue to supply the labour market with the highest level professionals who receive a host of rec- HUNGARIAN ECONOMY ognitions and awards.

ACTIONS TAKEN AND RESULTS ACHIEVED

• The training structure is oriented by professional framework-related decisions • More transparent, more meaningful accredited (OKJ) training courses which facilitate wider employability • 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 have increased (more corporate workshops) OPEL KNOWLEDGE CENTRE Opel's training centre established with a EUR 1.7 million – that is, half a billion HUF – investment ensures a OBJECTIVES simultaneous professional training of approximately 1. To serve the needs of the economy: to train more 100 students. Furthermore, additional 100 students skilled workers and technicians participating in the dual training will take part in certain 2. Strengthening the dual training: practice-oriented partial trainings in the Szentgotthárd-based centre. The knowledge, reduction of drop-outs due to "work" study workshops in the new training centre have been 3. Increasing the attractiveness (prestige) of vocational designed to train automation technicians, machine- training: Encouraging more students to choose based cutting technicians and electricians. In the same vocational training in the future place the practical training base has been set up for the 4. Improving the vocational training system: improving -based dual mechanical engineer training the quality, effectiveness and efficiency of the training where the students can master engineering skills. Invest in Hungary 37

Did you know that… …possibly the world’s best-known toy, the multi-coloured Rubik cube puzzle was invented by Hungarian Ernő Rubik? 39 GLOBAL BEST TO INVEST

TOTAL PROJECTS PER CAPITA REFERENCES WE ARE 1. Hungary 1. Hungary FDI RANKING 2. Czech Republic 2. Czech Republic PROUD 3. Poland 3. Macedonia 4. Slovak Republic 4. Slovak Republic 5. Greece 5. Liechtenstein OF OUR 6. Romania 6. Greece 7. Macedonia 7. Poland 8. Serbia 8. Serbia REFERENCES 9. Bulgaria 9. Latvia 10. Croatia 10. Bulgaria

HUNGARY IS THE MOST ATTRACTIVE INVESTMENT LOCATION IN THE REGION very two years, the fDI magazine first time another Hungarian town achieved a announces its ranking entitled "European ranking: "Győr ranked ninth among the “Top 10 ECities & Regions of the Future" which aims Small European Cities of the Future 2016/17 – ungary's achievements have proven Selection magazine, focusing on foreign to collect and rank the most important invest- Business Friendliness”. In addition, the Central the efforts of the government to direct investment, on the best investment ment sites. This year, in addition to Budapest, Hungary region ended up among the top 10 Hturn Hungary into a leading target targets. In that comparison which is called Hungarian rural locations also have been placed in as many as two categories: it is the fourth for investments in the region by improving Global Best To Invest ranking, Hungary is at on the magazine's list of the top ten. Accord- among the “Top 10 Mid-Sized European Regions competitiveness, establishing an investor- the head of both the absolute league table ing to the ranking Budapest is still among the of the Future 2016/17 – Business Friendliness”, friendly system of institutions and infra- and the list based on per capita foreign most attractive cities on the list of the top ten while Transdanubia region reached tenth on this structure and by actively encouraging direct investment for the Eastern European cities in Eastern Europe and is on the list of ranking. Among the “Top 10 Eastern European investments. This has been confirmed by region. (Source: www.siteselection.com.) the top ten most important European cities in Regions of the Future 2016/17”, on the whole, a review published in the prestigious Site three subcategories as well. Further significant Central Hungary ranks seventh, which is an success is that, in addition to Budapest, for the important achievement. Invest in Hungary 41

REFERENCES THEY ARE AMONG THOSE COMPANIES WHO HAVE ALREADY CHOSEN HUNGARY TESCO A DR. OETKER OL -C TEVA KI JABIL COLOPLAST OCA K IBIDEN ZF DHL LEGO C T N

CITIBANK NOKIA SUZU GENERAL MOTORS OO OF K EMIRATES NATIONAL INSTRUMENTS AU E TAKATA PROCTER&GAMBLE EK L EMSE GS R HANK ON LT CROS HI IBM EY

TA TATA S BR EL B.BR MI G AF ZO

AUDI LP

NL ERICSSON NONE LE EN KINSON

R- SYSTEM AX AG ENKE OD

TA SANOFI DA UN DE AC

DAIM LE R V +N CH EM FLEXTRONICS N S

NTINEN APOLLO TYRES OR SI UNILEVER A

BRIDGEST ONE ON DIC KNOR CO SAMS DB S

RG BOSCH

HENKEL CT DENSO NESTLÉ GENERAL ELECTRIC KUEHNE BE MO GEBRÜDER WEISS When you actually start to investigate, Budapest is very well known for shared services. We didn’t want ZOLTEK to go into a greenfield site where we would be new and might struggle to find people. And what we find when coming to Budapest is that everybody knows about shared services, which made the whole transition a lot easier for us… Great language skills, great ethical work, and the attitude of the workforce is also great.” Simon Taylor, President of Systemax European Technology Products Group. Have you heard that… …CNN ranked the Great Market Hall of Budapest as the most amazing city market in Europe? RUIN PUBS An abandoned building Invest in Hungary 45 turned into a new wave, uniquely Hungarian bar, QUALITY YOU CAN with creative thrift-shop décor and a huge dose of OF LIFE ENJOY AN Hungarian passion! EXCEPTIONAL QUALITY OF LIFE BUDAPEST IS THE 2. BEST CITY ON EARTH (Condé Nast Traveler, 2015)

BUDAPEST This is a land with 1,000 years of history and a unique fusion of Eastern and Western cultures. This is a land where the River Danube flows through one of the most beautiful capitals in the world. LIVE ESCAPE GAMES This is a land where rejuvenating thermal Budapest has become a superpower springs run just below the surface. This is in live escape games. The city is full a land called Hungary! of abandoned basements – perfect FRÖCCS scenes for a group of friends to test their Quality Hungarian white or rosé wine problem solving and teamwork skills. mixed with soda water: This is what we call fröccs, the official drink of spring, summer and autumn in Budapest. THERMAL WATER Hungary is blessed with an abundance of 46 Invest in Hungary thermal water, and its bathing culture is supported by excellent facilities. The world’s largest thermal lake suitable for bathing is QUALITY in the Western Hungarian town of Hévíz; the water temperature never drops below OF LIFE a friendly 79°F/26°C, so a dip is possible at any time of year!

COUNTRYSIDE Hungary’s diverse countryside has adventure on offer for lovers of outdoor activities: 11,000 kilometres of hiking routes; more than 2,500 kilometres of INTERNATIONAL SCHOOLS cycle paths; 17 golf courses; ten national Expatriates looking to stick with the curricula of parks; and many protected nature reserves their home countries can choose from a range of for those in love with fresh air. The protected private international schools for their children. Puszta-regions, the Great Plain, the romantic There are also many English, German or French Danube Bend with its historic sites, and public and private pre-schools for children aged pretty baroque such as attract from three to six. The school year starts in Sep- visitors in every season. Lake Balaton, the tember and ends in June, and school buses are largest fresh water lake in Central Europe, is usually available at private schools. There are a perfect holiday resort. many opportunities to study in a foreign lan- guage at universities too. Invest in Hungary 49

HUNGARIAN INVESTMENT WE CAN PROMOTION AGENCY (HIPA) PROVIDE PROFESSIONAL ASSISTANCE 111 LOCAL REPRESENTATIONS

76 COUNTRIES

he Hungarian Investment Promotion Agency (HIPA) is a national investment Tpromotion organisation governed by the Ministry of Foreign Affairs and Trade. It provides professional consulting services to IPA operates in close cooperation interested companies free of charge in a one- with diplomats abroad promoting stop-shop service model, supporting them Hforeign trade activities, helping to Several Hungarian automotive in selecting a business location, providing strengthen Hungary’s foreign trade relations OEMs use our services, such as tailor-made incentive offers and information at 111 local representations in 76 countries. AUDI / BOSCH / OPEL / SUZUKI / on state subsidy issues, identifying TAKATA / THYSSENKRUPP. investment possibilities and dealing with You can find the detailed contact list on public authorities. www.hipa.hu. Invest in Hungary 51

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 consultancy offers and information & evaluation feedback and mediate further expansion services to address your packages on the + between government and plans. business needs. business environment, site visits. and business based on labour market, tax 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 53

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

European markets? LOGISTICS

Did you know that… …4 OEMs have already chosen us (Audi, General Motors, Mercedes, Suzuki) Did you know that… and 43 out of the Top 100 global OEM parts …100% GMO-free ingredients are available AUTOMOTIVE suppliers are available in Hungary? in Hungary? FOOD INDUSTRY

Did you know that… Did you know that… …Hungary has one of the most productive …Hungary has a strong pharmaceutical LIFE electronics industries in the CEE region? industry with a century-old tradition? SCIENCES ELECTRONICS

Did you know that… Did you know that… …100 years of widely acknowledged …you can rely on globally acknowledged ICT innovation is available in Hungary? human capital at a reasonable cost? MEDICAL TECHNOLOGY

Did you know that… Did you know that… ...Hungary has ideal geothermal gradient ...above the most common European

(1.5 times higher than the world average)? ENERGY languages exotic languages (such as RENEWABLE

SSC Swedish, Norwegian, Finnish, Dutch, Japanese, Chinese, Portuguese and Arabic) are also available? Invest in Hungary 55

IPA operates an internal database of industrial HIPA parks, investment sites, and industrial halls INVESTMENT SITES Hin Hungary. One of the most comprehensive resources of its kind, the HIPA database is part of the information package for potential investors. MORE THAN LOOKING FOR 110 100 480 INVESTMENT SITE? INDUSTRIAL OFFICES GREEN- AND HIPA WILL SUPPORT PARKS BROWNFIELD ARE WAITING FOR SITES YOU! YOUR INVESTMENT

The Investment Sites Database, which lists nearly 700 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 point for any prospective investor. Invest in Hungary 57

HIPA SUPPLIER DEVELOPMENT

FOR OEMs / 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

“From our sole European factory in Hungary, we are sup- UNIVERSITY AND EDUCATION, EXHIBITIONS plying high quality tires to the European markets meeting R&D COOPERATION TRAINING = all expectations of our very demanding customers. = = Appearance on The keys to success are our highly skilled engineers Supporting Professional trainings Hungarian and and able workers, the favourable location and the educational and R&D in several fields international excellent cooperation with all government bodies." cooperation between (efficiency trainings, exhibitions and Sangil Lee, Managing Director of Hankook Tire universities and benchmarking fairs Hungary Ltd. suppliers techniques, automotive standards) Invest in Hungary 59

(HIP) HUNGARIAN INVESTMENT PROJECTS 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 certain project.

HIPA also facilitates the project owners for successful preparation and presentation of their projects, by constant consultation and specialized education courses.

For further information, business plans and contacts to the projects owners, please get in touch with our HIP team: [email protected]

he Hungarian Investment Promotion Agency aims to link the potential Tfinancial and strategic investors with Hungarian projects in need of investment. HIPA handles a continuously growing database, which currently consists of 47 investment projects from several industrial sectors:

• agriculture and food industry • manufacturing • green industry • innovation • real estate.

This collection offers high quality, pre- screened, legally transparent and ready to- launch investment opportunities for poten- tial investors. The average project budgets range from € 1.5 million to € 150 million. Invest in Hungary 61

INCENTIVES WE CAN OFFER OVERVIEW INCENTIVES

The maximum aid intensity is 50% in Northern Hungary, Northern Great Plain, Southern Great + Plain and ; 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 + LAND CENTRAL HUNGARY, Budapest free / reduced 0 / 20 / 35% + Miskolc NORTHERN LOANS % HUNGARY low-interest 35 25 % Győr Debrecen CENTRAL NORTHERN TRANSDANUBIA GREAT PLAIN Székesfehérvár 50 % WESTERN TRANS- DANUBIA SOUTHERN TAX ALLOWANCES SOUTHERN GREAT PLAIN TRANSDANUBIA ne of Hungary’s competitive advan- Szeged THE MAXIMUM AVAILABLE tages over other countries in the There is a wide range of tax allowances AMOUNTS OF REGIONAL Pécs INCENTIVES ARE BASED ON A Oregion is the Government’s strong for new investments and R&D. Hungary REGIONAL AID INTENSITY MAP. commitment to streamlining business pro- provides tax exemption on holding cesses and increasing the competitiveness structures, capital gains on shares 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 if – to facilitate foreign direct investments and incomes. There is no withholding tax the investment is a large investment (i.e. exceeds reinvestments by local enterprises. The main on dividends, interest and royalty € 50 million): 50% of the maximum aid intensity types of incentives are cash subsidies (either paid by a Hungarian company to a determined in the regional aid map is available for from the Hungarian Government or from EU foreign company. Hungary has a wide that part of the investment between € 50 million and Funds), tax incentives, low-interest loans, international treaty network with more € 100 million, with 34% of the maximum aid intensity and free or reduced price lands. than 80 double tax treaties. for that part of the investment beyond € 100 million. Invest in Hungary 63

INCENTIVES OVERVIEW

73 6 51 82 30 1 21 Gyál 41 61 2 Alsónémedi 22 Gyömrő 42 62 Szigetszentmiklós 27 43 36 64 3 Aporka 23 Halásztelek 43 Nagybörzsöny 63 26 40 34 4 Aszód 24 Hévízgyörk 44 Nagykáta 64 63 84 5 Bag 25 45 Nagykőrös 65 Táborfalva 86 79 6 Bernecebaráti 26 Ipolydamásd 46 66 Tápióbicske 56 % % 35 7 Cegléd 27 Ipolytölgyes 47 Nyársapát 67 Tápiógyörgye 20 32 57 17 19 85 8 Csemő 28 Jászkarajenő 48 Ócsa 68 Tápióság 80 29 9 Dabas 29 Kartal 49 Örkény 69 Tápiószele 25 4 54 10 24 10 30 Kemence 50 Pécel 70 Tápiószentmárton 53 55 5 18 11 Dömsöd 31 Kiskunlacháza 51 Perőcsény 71 Tápiószőlős 75 59 20 12 32 Kisnémedi 52 Péteri 72 Tatárszentgyörgy 81 13 33 Kocsér 53 73 Tésa 46 14 Érd 34 Kóspallag 54 Pilisjászfalu 74 Törtel 50 15 35 Kőröstetétlen 55 Pilisvörösvár 75 Tura 60 1338 16 Felsőpakony 36 Letkés 56 Püspökhatvan 76 Újhartyán 22 44 83 17 Galgagyörk 37 Lórév 57 Püspökszilágy 77 Újszilvás 52 68 15 78 18 Galgahévíz 38 Maglód 58 Ráckeve 78 Üllő 14 23 62 21 66 12 16 42 69 19 Galgamácsa 39 Makád 59 Solymár 79 Vác 2 70 67 20 Gödöllő 40 Márianosztra 60 Szentmártonkáta 80 Váckisújfalu 48 71 77 3 76 7 1 81 Valkó 31 9 When calculating the maximum available 58 41 82 Vámosmikola amount of regional incentives, all regional 83 Vecsés 37 61 49 8 74 incentives – including cash subsidies, 47 35 84 Verőce 39 11 development tax allowance, etc. – must be 72 65 28 85 45 taken into account. 33 86 Zebegény

REGIONAL AID INTENSITY MAP IN CENTRAL HUNGARY FOR THE PERIOD 2014-2020 Invest in Hungary 65

INCENTIVES TAX INCENTIVES

WE CAN OFFER DEVELOPMENT TAX INCENTIVES TYPE tax allowance for post-investment period ach development tax allowance may be claimed for a 10-year period AMOUNT OF SUBSIDY E(beginning once the development exemption for 80% of the corporate tax is completed) in Corporate Income Tax payable for 10 years following installation, (“CIT”) returns within a maximum period up to HUF 500 M turnover the corporate of 14 years from the original application tax rate is 10%, above HUF 500 M the for the incentive. In any given tax year, tax rate is 19% the tax incentive is available for up to 80% of the tax payable, but in total up to the CONDITIONS state aid intensity ceiling. investment volume minimum HUF 3 B (€ 11.3 M), minimum 150 new jobs OR HUF 1 B Applications for tax incentives must be (€ 3.7 M) investment volume and 75 new submitted to the Ministry for National jobs in preferred regions Economy, and the Hungarian Government DID YOU KNOW? has the right to grant permission if the APPLICATION in 2014, Hungarian GDP growth (3.6%) was aggregate eligible costs of the investment depending on investment volume request or the second highest in the EU? exceed € 100 million. If the investment application needs to be submitted is below this threshold, taxpayers need only notify the Ministry for National PROVIDER OF INCENTIVE Economy before starting the investment. Ministry for National Economy Invest in Hungary 67

INCENTIVES NON-REFUNDABLE CASH SUBSIDIES

WE CAN OFFER SUBSIDY BASED ON INDIVIDUAL GOVERNMENT DECISION he main types of cash incentives The Hungarian Government makes a VIP related to investments are focused subsidy opportunity available for investments Ton asset investment (e.g. purchas- greater than € 5, 10 or 20 million that create ing assets, construction work, etc.), cre- a certain number of new jobs, depending on ating new jobs, and training employees. the purpose and location of the investment. The conditions of the VIP subsidy are deter- A VIP cash subsidy (subsidy based on mined in a negotiation procedure between individual government decision) may be the investor and the Hungarian authorities. granted under current legislation based on Subsidy applications can be submitted to Government Decree No. 210/2014. (VIII.27.) HIPA, in English or in Hungarian. The main on the utilisation of investment incentive areas that attract support are asset investment targeted appropriations. (greenfield, brownfield or capacity extension) and investments aimed at job creation. Invest in Hungary 69

INCENTIVES VIP CASH SUBSIDY NON-REFUNDABLE CASH SUBSIDIES ELIGIBILITY FOR ASSET INVESTMENT ≥20 million EUR

≥100 Budapest new employees Miskolc

Győr ≥10 Debrecen million EUR

Székes- fehérvár ≥50 new employees or Szeged ≥5 Pécs million EUR WE CAN OFFER ≥100 new employees SUBSIDIES BASED ON ASSET INVESTMENT

In order to be authorized for a VIP cash 50 new jobs and the eligible cost of the new jobs and the eligible cost of the invest- Eligible costs for an asset investment include subsidy, investors shall create at least 50 investment shall be at least € 10 million. ment shall be at least € 20 million in Fejér, the purchase of the plot, construction costs new jobs in all regions of Hungary which can Should investors set up a new establishment Komárom- and Győr-Moson- or building rental fee (during the imple- be subsidized, in case of investments aiming or expand their activity with a fundamen- counties or in Central Hungarian mentation period), infrastructural costs, the at the creation or the expansion of Regional tally new activity compared to its previously regions which can be subsidized. purchase of new equipment and machines, Shared Service Centres. performed activities as a result of the invest- Please note that investments implemented intangible assets, etc. The investment period In the case of any other type of asset invest- ment in Northern Hungary, the Northern by large enterprises can only be subsidized is determined by the investor, yet is usually ment, the system of criteria consists of two Great Plains, Southern Great Plains and in Central Hungarian region, if the invest- less than five years. The monitoring period, factors: the number of the newly-created Southern Transdanubia or in Vas, Veszprém ment is located in an area which can be starting from the completion of the invest- jobs and the volume of the investment. In the and counties, the condition of eligibility subsidized and the investor sets up a new ment, is five years in the case of large com- region of Northern Hungary, Northern Great is the creation of at least 100 new jobs and establishment or expands the activity of the panies and three years in the case of SMEs. Plain, Southern Great Plain and Southern a minimum investment volume of € 5 million. company with a fundamentally new activity Transdanubia or in Vas, Veszprém and In order to be eligible for the VIP cash compared to its previously performed Zala counties, investors shall create at least subsidy, investors shall create at least 100 activities as a result of the investment. Invest in Hungary 71

INCENTIVES NEW NON-REFUNDABLE CASH SUBSIDIES JOB!!!

VIP CASH SUBSIDY ≥10 ELIGIBILITY FOR JOB CREATION million EUR INVESTMENT ≥100 new employees Budapest Miskolc

Győr Debrecen ≥10 million EUR Székes- fehérvár ≥50 new employees

Szeged WE CAN OFFER Pécs SUBSIDIES BASED ON JOB CREATION

The eligibility criteria for a VIP cash subsidy cost of the investment shall reach at least located in an area which can be subsidized and the on a job creation basis are as follows: in case € 10 million. investor sets up a new establishment or expands of investments aimed at the creation or In Fejér, Komárom-Esztergom and Győr- the activity of the company with a fundamentally the expansion of Regional Shared Service Moson-Sopron counties or in the areas of new activity compared to its previously performed Centres, investors shall create at least 50 new Central Hungarian region which can be activities as a result of the investment. jobs, in all regions of Hungary which can be subsidized, the condition of eligibility is the The eligible costs are 24 months of salary and con- subsidized. creation of at least 100 new jobs and the tribution towards the newly hired within a three- In the region of Northern Hungary, eligible cost of the investment shall be at year-period. These costs must reach a minimum Northern Great Plain, Southern Great Plain least € 10 million. volume of € 10 million (except in the case of invest- and Southern Transdanubia and in Vas, Please note that investments implemented ments aimed at the creation or the expansion of Veszprém and Zala counties, investors shall by large enterprises can only be subsidized in Regional Shared Service Centres). create at least 50 new jobs and the eligible Central Hungarian region, if the investment is Invest in Hungary 73

INCENTIVES INCENTIVES TRAINING SUBSIDIES SUBSIDIES FROM EU FUNDS NEW position!!!

50-250 251-500 501-750 751+ new jobs new jobs new jobs new jobs = = = =

EUR 0.5 million EUR 1 million EUR 1.5 million EUR 2 million maximum maximum maximum maximum WE CAN OFFER TRAINING SUBSIDY SUBSIDIES FROM EU FUNDS he Hungarian Government also of € 2 million. Furthermore, the amount wide range of tender calls development, job creation and financing of offers a VIP subsidy opportunity of the subsidy per capita cannot exceed are available from EU Funds human resources costs. The conditions for Tfor the training of employees. The the amount of € 3,000. This subsidy is A for which investments of less applying, the timing, and the total amount subsidy is available to investors creating at provided for trainings with maximum aid than € 10 million can also qualify. As of the subsidy available vary from tender least 50 new jobs: for 50 to 250 new jobs intensity of 50%. The aid intensity can be a member of the European Union Hungary to tender. The first relevant tenders for the created, the maximum training subsidy increased further in the case of small- and has access to EU funds for a number current seven financial years in the forms is € 0.5 million, for 251 to 500 new jobs medium-sized enterprises and for training of development goals, such as asset of both refundable and non-refundable created, the maximum training subsidy is € of disabled or disadvantaged workers. acquisition, infrastructural development, incentives were announced in the autumn 1 million; for 501 to 750 new jobs created, the Please note that this subsidy may be granted new construction, renovation, service of 2014. maximum training subsidy is € 1.5 million in all regions of Hungary. more than 751 new jobs, it is a maximum