Business Environment

Open economy

Hungary is an open economy and particular emphasis is placed on encouraging foreign investment. 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 2013), the highest ratio in the region.

Government’s measures

In order to improve the business climate, the Hungarian government:

  • Reduced the CORPORATE TAX RATE to the lowest level in the CEE region (10/19%)
  • Created a new, even more FLEXIBLE LABOUR CODE in favour of employers
  • Restructured TERTIARY EDUCATION in accordance with labour market expectations
  • Introduced a new act on VOCATIONAL TRAINING in favour of business needs
  • Created FREE ENTERPRISE ZONES with special tax and contribution allowances
  • Introduced the JOB PROTECTION ACTION PLAN to improve the situation of certain groups of employees by reducing employer costs
  • Entered into STRATEGIC AGREEMENTS with numerous companies

Source: HIPA