Hungary is the ideal place if you want to set up your business in the EU. Advanced infrastructure, central location, and favorable taxation options make Hungary a friendly business environment, and many foreigners move here with their family so they can build a new life in the EU.
Foreigners in Hungary
Currently, more than 350,000 foreigners live and work in Hungary. In 2020, 60,000 new work permit applications were submitted, even though the pandemic contributed to an increase in unemployment. This clearly shows that talented workforce is always welcome, and businesses can still prosper, even though the labor market needs some time to catch up with the latest changes in demand.
Business trends in 2021
Around 540,000 companies operate in Hungary, out of which around 8%, or 42,000 have some kind of foreign control (e.g. a foreign business owner). The industries most represented among the activities of foreign-owned or affiliated companies include trade, real estate, consultancy, and construction.
Among companies that have a yearly revenue above HUF 100 million (EUR 270,000), 12% are foreign owned. While this seems a decrease from the 18% 8 years ago, in fact the number of such companies remained more or less the same, around 8,000, while the number of Hungarian companies with similar specifications almost doubled (increased from 35,000 to 62,000).
Among companies that have a yearly revenue above HUF 1 billion (EUR 2,700,000), 31% are foreign owned. While this again might seem a decrease compared to the 41% 8 years ago, this is just a decrease in proportion. In fact, the number of such companies increased from 2,700 to 3,200, but the number of Hungarian companies increased even more, from 3,900 to 7,300.
Another new trend is that a significant proportion of new companies grow considerably in the first 5 years of their operation. 1% of companies set up between 2013 and 2015 reached a yearly revenue above HUF 1 billion in less than 5 years. While this 1% may not seem much, such rapid growth had not been documented before.
Foreign business owners welcome
Regarding the nationality of foreign business owners in Hungary, there has been a shift over the last 8 years. Before that, Hungary was most chosen by German or Austrian investors. Recently Ukraine has taken the lead, while the proportion of investors from neighboring countries like Romania and Serbia has been also growing steadily parallelly to the decrease in the proportion of western countries.
At the same time, there are no restrictions on nationality when it comes to setting up in Hungary. Wherever you come from, you just need your passport to take care of the paperwork, and your company can be registered within 4-5 business days. Depending on international developments, citizens from some countries (the Middle East, most recently) may be subject to more scrutiny at the bank when opening their corporate bank account, but that may be balanced by submitting verifications of local connections and partnerships, such as preliminary office rental or labor agreements.
Set up a company now
Hungary continues to be a popular destination for foreign business owners thanks to the favorable conditions which let your EU business grow rapidly. Favorable taxation lets you focus your profit on development. Company setup is straightforward and quick, and there are no restrictions on nationality.
Are you interested? Get help from our expert team. Just fill in our form, tell us what you need, and let us support you starting a business in Hungary.