Expanding a Business in Hungary
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Why Expand to Hungary?
Hungary has become economically stable and increases to grow. It hopes to take on the Euro as its currency in 2012. Job opportunities have increased, especially around Budapest, as a third of all business is carried out there. Hungary is the UK's largest export market in Central and Eastern Europe with sales worth £850 million each year.
What are the Attractions for UK Businesses?
The reputation of British companies is high in Hungary and the country offers main opportunities for growth in many sectors. With English being the international language of business, it helps UK investors interested in expanding a business in Hungary. Job opportunities, especially in Buda where one third of business occurs, are ever increasing. Another attraction to setting up a business in Hungary is the reasonably priced property and a lower cost of living than other European countries.
Aerospace - This growing sector provides good opportunities for UK companies in areas like research, joint product development, training, consulting, subcontracting and technology transfer.
Agriculture - Hungary's topography, fertile soil and the number of hours of sunshine make it possible to achieve outstanding results. The industry employs 83,000 people. Other priorities include improving the environment and the countryside, quality of life in rural areas and diversification of the rural economy. This influx of EU money may mean additional business opportunities for UK companies wishing to expand a business in Hungary.
Airport development - Substantial development work (worth EUR 261m - GBP 207m) at Ferihegy Budapest International Airport, which is operated by Hochtief. The most important investments at Ferihegy include construction of new air cargo facilities, a new maintenance hangar, a modern engine test run stand, a 4-star hotel and a business park with new offices ("Airport City"). Several regional airports are seeking operators. Business opportunities for different design works and supply are open through tenders.
Automotive - The automotive industry is well advanced in Hungary. There are outstanding opportunities for joint production with companies in the region to follow big OEMs. There are also specific new opportunities in supplying leading edge technology, know-how transfer and R&D co-operation. Biotechnology - is one of the fastest growing knowledge-based high-tech industries in Hungary. The main driving forces have been the launch of the new biotech knowledge centres. Hungary's Economy Ministry has drawn up an action plan, which is directed at ensuring a favourable regulatory environment for the operation and development of the pharma and biotech industries to increase competitiveness through the better use of funding available to the sector. The establishment of new means of public grants and capital sources have enabled spin-off activity and corporate development. As a result, numerous new spinoffs and start-ups have been formed. Strength lies mainly in molecular biology, diagnostics, drug development, genomics and bioinformatics. Opportunities exist for facilities design and management companies, contract research and clinical trials organisations, regulatory & compliance consultancies, finance & investment services.
Clothing, Footwear and Fashion This market has been steadily growing and is a very potential market. It covers all sorts of the sector, from high-end fashion, luxury brands to economy. Although the market is price sensitive, more and more people, especially the younger generations, are being fashion conscious.
Construction - Strong price competition and local regulations make this a tough market, but there are definite business opportunities on the construction products side and the emerging regeneration, green buildings and property development segments.
Education - Hungarys education reforms have been underway for some time. Ongoing projects include subject digitalisation, equipping classrooms, dissemination of competence based programmes and further training of teachers. Although the language training market in Hungary is competitive, there is always room for new and initiative methods to be introduced and English is the first choice foreign language for many Hungarians.
Food & Drink - In food purchasing decisions, quality, price and place of origin are the most important factors. There are business opportunities for British companies with health/wellness products, convenience food and ethnic food.
Healthcare - The Hungarian healthcare market provides opportunities for British companies in the medical equipment supplies, management consultancy, investment projects, and healthcare and hospital management services.
ICT - The Hungarian ICT sector is well-established, developed and competitive. Private business and consumer sales, especially multimedia and software, are driving the IT market, while mobile and broadband data/Internet networks are the main growth areas in the communications industry. UK technologies, specific components and manufacturing support products and services are also widely used in the electronics segment.
Power - There is an increasing trend towards establishing renewable energy plants, using biomass and wind resources. Most of the old generating plants were and are being refurbished or converted to biomass and gas fired burners. Further investment will be needed in upgrading the old, coal and oil fired blocks.
Railways The focus over the next few years is on developing railway infrastructure, including maintenance of track and upgrading electrification & the signalling systems.
Transport / Logistics - Business opportunities lie in construction and supply specific equipment including warehousing or security systems.
Water-Environment - Business opportunities for UK companies exist in providing innovative liquid and solid waste technologies, waste to energy solutions and cost effective package wastewater plants
The best locations in which expanding a business in Hungary may be particularly profitable are listed below:
Challenges Foreign Companies Face
After the Iron Curtain fell in 1989, and Hungary joining the EU, things have been looking up for foreign companies to set up a business in Hungary. It is vital to research your chosen area, your market sector and your target audience. Things don't always run smoothly in business so covering all angles. Research and a well thought out business plan can assist you on your way. Consider also licensing or incorporating a business in Hungary.
Organisations that can assist with Entering the Market
When expanding your business to Hungary, donít forget to protect your brand. We provide Trademark Registration Services in Hungary and in the entire European Union.
TopSource Worldwide offers a complete range of employer services that allows you to employ and pay people promptly, consistently and compliantly ó locally and internationally to suit your business needs. Our systems and processes are designed to work with your technology, and we bring decades of experience and a track record of success to our operations.
Need to register a company or setting up a company?
Do you need advice from an expert in your field, on the ground? Need help finding the best route to market for your product or service?
Simplified Global Payroll Managing payroll in multiple countries is complicated with different systems, deadlines, and languages in each country, lack of reporting, and constantly changing laws and regulations. Trying to manage global payroll via fax and email with excel spreadsheets leads to data security issues, fines, and penalties for non-compliance. Blue Marble has solved global payroll challenges with cloud-based technology, customized aggregated monthly reporting, and a hybrid service model in 150+ countries around the world.