Hungarian Investment Climate Mr. János Berényi president
Who we are? Hungarian Investment and Trade Agency (HITA) was established by the Government on 1 January 2011 Governmental agency for investment promotion and trade development From 28 July 2014 new name: Hungarian Investment Promotion Agency (HIPA) Focusing exclusively on investment promotion in the future Headqurters in Budapest Foreign network Trade and investment counsellors
Key reasons to invest in Hungary Well-qualified, cost effective and flexible labour force Ideal location for distribution centers and for manufacturing activity Extensive supplier background for the new coming investors Highly developed logistical, transport and communication infrastructure Ready-made industrial parks Governmental incentives
Overview GDP GDP growth (2013): 1.1% Forecast (2014): 2.9% Export of goods Employment and wages Export volume growth (2013): 5.3% Forecast (2014): 5.8% Average gross wage (2013)*: 776.9; $1031.1 Unemployment rate (2014Q2): 8.0% Inflation Inflation rate (2014 forecast): 0.0% Budget balance Government balance (2013): -2.2% Forecast (2014) : -2.9% (% of GDP)
Expanding motorway network Prague, 5 hrs Munich, 6 hrs Hamburg, 8hrs Warsaw, 10 hrs Kyiv 12 hrs Vienna, 1 hr Rotterdam, 12 hrs Bucharest, 10 hrs Constanza, 12 hrs Zagreb, 1 hr Trieste, 6 hrs Koper, 6 hrs
Second highest FDI stock/capita in CEE 10 000 8 000 9383 8163 7903 6 000 5266 4687 4 000 3070 2 000 0 Czech Republic Hungary Slovakia Bulgaria Poland Romania
Stock of FDI in Hungary by country of origin (2012) United States 2.56% Belgium 2.57% United Kingdom 3.68% Switzerland 3.74% Other countries 20.97% Austria 11.59% Germany 24.71% Netherlands 12.41% Luxembourg 13.58% France 4.19% Source: HCSO
Stock of FDI in Hungary by sector (2012) Electricity, gas, stem and air conditiong supply 4.05% Construction 1.18% Manufacturing 20.11% Agriculture, hunting and forestry 0.59% Other 2.45% Services 71.62% Source: HCSO
Major manufacturing industries in Hungary Electronics Hungary is the largest electronics producer in Central and Eastern Europe Significant footprint of prestigious Chinese electronics firms (Huawei, ZTE) Automotive OEM s: Mercedes, Audi, Suzuki, GM The sector gives 18 percent of the total Hungarian export
Major knowledge-based industries and service sectors in Hungary Shared Service Centres Booming sector with around 80 SSCs already operating in the country Budapest is a proven location for SSCs Life sciences History of over 100 years in pharmaceutical manufacturing Approximately 250 research and educational institutes related to biotech ICT Outstanding cooperation between educational institutions and companies Growing number of data centers Logistics Strategic position in the heart of the continent Highly developed transport infrastructure
Main investment decisions in 2013 Coloplast (40,8 m EUR; 701 jobs) OPEL (60 m EUR) ZF Lenksysteme (80 m EUR) Hankook (303 m EUR; 950 jobs) Hewlett-Packard (175 jobs) Samsung (100 jobs) Procter & Gamble (59,5 m EUR; 150 jobs) Bridgestone (237 m EUR; 505 jobs) Systemax (200 jobs) Bosch (60 m EUR; 500 jobs) Flextronics (200 jobs) Takata (68,3 m EUR, 1001 jobs)
Budapest the BEST! Ranking City Country 1 Budapest Hungary 2 Wroclaw Poland 3 Katowice Poland 4 Plzen Czech Republic 5 Moscow Russia 6 Brno Czech Republic 7 Poznan Poland 8 Ostrava Czech Republic 9 Bratislava Slovakia 10 Prague Czech Republic Budapest - the most attractive city for capital investment in Eastern Europe in 2014-2015. Source: www.fdiintelligence.com, European Cities and Regions of the Future 2014/15
Regional aid intensity
Forms of incentives Cash grants Development tax allowance Job creation subsidy Training subsidy Job Protection Action Plan
SME incentive classification SIZE PERSON TURNOVER OR TOTAL ASSETS Small < 50 <= EUR 10M OR <= EUR 10M Medium < 250 <= EUR 50M OR <= EUR 43M Large >= 250 > EUR 50M OR > EUR 43M
Free Enterprise Zones Around 1,000 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%.
Hungarian Investment Projects (HIP) HIP A collection of approved private investment project offers. 33 projects - 1.4 billion EUR funding requirement Sectors: Agriculture and Food Industry Capital Goods Manufacturing Renewable Energy Medical, Recreational and Wellness Tourism Innovation Real Estate Overall project budgets ranging from EUR 1.5 million to EUR 1000 million. Source: HCSO
million EUR Value of trade in goods between Hungary and Slovenia (million EUR) 1 000 900 800 Import Export 700 600 500 400 300 200 100 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: HCSO
We are looking forward to a successful cooperation. Mr. János Berényi President Janos.berenyi@hipa.hu