Hungary the right place for your investment. 9th October 2013

Transcription

1 Hungary the right place for your investment 9th October 2013

2 Business environment

3 Hungary Location: EU - a common market of more than 500 million people Ukraine, Russia and the Balkans - market of 210 million consumers Source: Eurostat, OECD Land: 93,030 km² Population: ~10 million GDP/capita, at PPP (2012): EUR 16,800/ USD 22,924

4 Overview EU GDP External trade and industry Employment and wages Inflation Budget balance EU-member since 2004 GDP growth (2013Q2): 0.5% Forecast (2013): +0.9% Export volume growth (2012): +1.7% Forecast (2013): 4.5% Average gross wage (2012)*: Unemployment rate (June-August 2013): 9.9% Inflation rate (first half of 2013): 2.3% Forecast (2013): 1.9% Government balance (2012): -1.9% Forecast (2013) : -2.7% (% of GDP) Source: HCSO, Draft Budget 2014 *Exchange rate: 1 = HUF 1055 BUDAPEST, HONVÉ D UTCA 20. TELEFON: (+36) FAX: (+36)

5 Most important aims of Hungarian economic policy Financial and fiscal stability Reducing public debt To raise the growth potential of the Hungarian economy To increase the level of labour market participation and employment Enhancing competitiveness

6 Recent governmental measures for competitiveness New labour code (effective from 1 July 2012 ) in favour of employers New act on vocational training in favour of business needs Strategic agreements between the government and top investors Job Protection Action Plan cutting contribution payable by employers for 5 prioritised employee groups

7 Competitive tax system Low corporate income tax: rate for the first HUF 500 million (~ USD 2.3 million) of the tax base is 10%; beyond HUF 500 million, it is 19% Flat personal income tax: 16% European countries Corporate income tax France 33.33% Spain 30.00% Germany 29.55% UK 24.00% Greece 26.00% Czech Republic 19.00% Slovakia 23.00% Poland 19.00% Hungary 10-19%

8 FDI in Hungary

9 Inward FDI stock Percentage of GDP (2012) Hungary Czech Republic Slovak Republic Poland Romania Slovenia Source: Eurostat, Hungarian National Bank, OECD

10 Inflow of foreign direct investment (2012) (million USD) 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Source: UNCTAD Hungary Czech Republic Poland Slovakia Romania Bulgaria

11 Main investment decisions in 2013 Coloplast, medical devices manufacturing OPEL, engine manufacturing ZF Lenksysteme, electric steering systems Hankook, tyre manufacturing Hewlett-Packard, IT Sauflon, contact lens manufacturing Procter & Gamble, personal care products manufacturing General Electric, establishment of an oil & gas branch Greif, shared service center Bridgestone, tyre manufacturing Jabil, electronics manufacturing Thai President Foods, instant noodle manufacturing Systemax, shared service centre Bosch, R&D facility 1055 BUDAPEST, HONVÉ D UTCA 20. TELEFON: (+36) FAX: (+36)

12 Taiwanese investment in Hungary: the success story of Foxconn 2003 production in Komárom, supplying first Nokia, now Huawei for telecommunication devices 2008 production in Székesfehérvár, contract manufacturing of electronic devices Employs 600+ people in Hungary

13 Benefit from a good balance of quality and cost of labour

14 High quality education Well trained, creative and flexible human capital World-renowned academic and university background with cutting-edge competence International experience Extended cooperation with business sector Source: Statistical Yearbook of Education, 2011/2012

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16 Take advantage of high-quality infrastructure

17 Excellent access to key markets At the cross roads of 4 main European transportation corridors Extensive road and railway transportation network Highly developed logistics and telecommunications infrastructure

18 Expanding motorway network Vienna, 1 hr Rotterdam, 12 hrs Prague, 5 hrs Munich, 6 hrs Hamburg, 8hrs Warsaw, 10 hrs Kyiv 12 hrs Bucharest, 10 hrs Constanza, 12 hrs Zagreb, 1 hr Trieste, 6 hrs Koper, 6 hrs

19 Road density km/km Source: IMD, World Competitiveness Yearbook, 2012

20 Ready-made industrial sites More than 210 industrial parks are available for manufacturing activity Green- and brownfield investments Good access to highways Excellent infrastructure services Turnkey solutions New technology and logistical parks Warehousing Customs arrangements Forwarding Administration (authority permits) Financial services Legal consulting Extra services Nyíregyháza, IP Tatabánya, IP

21 Available incentives

22 Available incentives * Preferred local governments are located in Northern Hungary, Great Hungarian Plain (North and South) and South Transdanubia. ** According to preferred and most preferred micro regions. *** Employment of min. 50 new students.

23 Free Enterprise Zones 903 communities provide several tax allowances for investors Development tax allowance Maximum 80% corporate tax relief for 10 years Only HUF 100 million (EUR 0.33 million)* investment is needed Social contribution allowance 0% in the first two years of employment instead of 27%. 12.5% in the third year of employment instead of 27%. Vocational training contribution allowance 0% in the first two years of employment instead of 1.5%. Note: calculations are based on 300 HUF/EUR rate

24 HITA Investment sites in Free Enterprise Zones Szécsény Bátonyterenye Fényeslitke Felsőzsolca Tiszalök Alsózsolca Mátészalka Nyírbogdány Fehérgyarmat Nyírbátor Csenger Mezőcsát Tiszafüred Berettyóújfalu Kunhegyes Létavértes Tiszaföldvár Mezőtúr Mezőberény Tab Kunszentmárton Sarkad Kaposmérő Mórahalom Kistelek Industrial Park Industrial Site Industrial Hall

25 Maximum aid intensity Eligible expenditure Adjusted aid ceiling Up to EUR 50M 100 % of regional ceiling For part between EUR M 50 % of regional ceiling For part exceeding EUR 100M 34 % of regional ceiling Please note that the current incentive system is valid till end of 2013, however it is expected to be effective till 30 June 2014!

26 Quality of life

27 Expats like Hungary International schools in Budapest British, American, German, French, Chinese, Japanese, Austrian etc. Private medical services Well-known across Europe Entertainment facilities Thermal baths, wellness, recreation centres throughout the country Public golf courses Rich cultural life Excellent food and wine

28 THANK YOU FOR YOUR ATTENTION! For further information please contact: Mrs. Eszter Hegedüs-Varga Head of Department Phone: eszter.varga@hita.hu