The Financial Times named Budapest the most attractive city for capital investment in Eastern Europe in 2014-2015. To make the whole Hungary even more attractive to investors, its government reduced the corporate income tax (CIT) to a flat 9% since January 2017, and thus Hungary offers now the lowest CIT rate among the 28 member states of the EU.
Hungary has a population of almost ten million people and a favourable geographical location between East and West and between North and South. The Danube connects it with Germany, Austria, Slovakia and Romania and the River Tizsa, with Serbia, Romania, Slovakia and Ukraine. Linguistically, Hungary is isolated. The Hungarian language’s only relatives in Europe are Finnish and Estonian.
The Hungarian government is committed to supporting businesses and investors through a wide range of incentives: tax advantages, low-interest loans and cheap land. The most developed industries in Hungary are automotive, electronics, pharmaceuticals, ICT, agriculture and food. For example, the automotive industry is represented by companies like General Motors, Suzuki, Audi and Mercedes Benz.
2017 was a successful year for the Hungarian economy and a period of real boom for the Hungarian industrial sector, it was instrumental for the GDP growth by 3,8%, which was higher than the EU average and second only to Poland.
There are over a hundred Finnish companies in Hungary and their combined investments have exceeded one billion euros. The largest companies are Nokia and Sanoma. Another Finnish success story in Hungary is Profile Vehicles which initially came to Hungary to make ambulances and successfully expanded their operations to other products.
Hungary has CEE’s most developed pharmaceutical sector. It is an ideal base for life-science companies that are planning further expansion to the Balkan states or to the more distant markets in Eastern Europe and Asia. In fact, Seppo Hoffrén Consultancy’s first project in Hungary was in the pharmaceutical sector. When the Finnish client entered the market, the favourable expert opinion expressed by a local research institute helped getting the attention of local distributors.