ABOUT HUNGARY

Amongst all the countries in Europe, Hungary is a landlocked country located in Central Europe, known for its rich history, vibrant cultural heritage, thermal baths, and a dynamic economy with a strong focus on manufacturing and innovation. It is traversed by the Danube River, which plays a significant role in its geography and trade. The capital of Hungary is Budapest, which is its largest and most populated city, serving as the country’s primary economic, cultural, and political hub, renowned for its architectural beauty and position as a major European tourist destination. According to the report of the World Bank, Hungary has been classified as a High-Income Nation, characterized by a developed market economy with increasing integration into global value chains. The currency of Hungary is the Hungarian Forint (HUF). As of today’s exchange rates (June 2025), 1 Hungarian Forint is approximately 0.22 Indian Rupees. The population of Hungary is estimated to be around 9.6 million in 2024. Its neighbouring countries are Slovakia to the north, Ukraine and Romania to the east, Serbia and Croatia to the south, and Slovenia and Austria to the west. The official language of the country is Hungarian. English is increasingly spoken and understood, especially in Budapest, business centers, and among younger generations, facilitating international communication. The majority of the population identifies as Roman Catholic, with significant Calvinist and Lutheran communities, and growing religious diversity. Currently, Hungary has several international airports, with Budapest Ferenc Liszt International Airport (BUD) being the primary international gateway, offering extensive air connectivity globally. As a landlocked country, Hungary has no seaports but utilizes important river ports on the Danube (e.g., Budapest, Dunaújváros) for riverine transport and relies on major European seaports in neighbouring countries (e.g., Koper in Slovenia, Rijeka in Croatia, Hamburg in Germany) for its international maritime trade requirements.

The standard corporate income tax rate in Hungary is 9% (one of the lowest in the EU). Hungary actively offers a highly attractive system of investment incentives to encourage foreign direct investment, especially for strategic projects, high value-added activities, R&D, and job creation. These incentives can include corporate income tax relief, cash grants for investments, development tax benefits, and training subsidies. There are also specific incentives for R&D activities, encouraging innovation. As a full member of the European Union, Hungary benefits from full access to the EU’s single market, ensuring free movement of goods, services, capital, and people. Opesh Group of companies will be helping you in the completing Due Diligence process which includes financial planning, registration process, business options, and if required, even helping you find a Rental property for your office.

Establishing a business in Hungary is generally straightforward, supported by an investment-friendly government policy and a relatively efficient administrative system. The Hungarian Investment Promotion Agency (HIPA) is the primary governmental body dedicated to promoting and assisting foreign direct investment. A foreign investor who is planning to start his business in Hungary can form various company types, with the most common and flexible structures being a Limited Liability Company (Korlátolt Felelősségű Társaság or Kft.) or a Company Limited by Shares (Zártkörűen Működő Részvénytársaság or Zrt. for private, and Nyilvánosan Működő Részvénytársaság or Nyrt. for public). The Kft. is the most popular choice for foreign investors due to its simplicity and flexibility, allowing 100% foreign ownership with a minimum share capital of HUF 3,000,000 (approx. €8,000). Hungary’s legal system is based on civil law, with robust commercial and labor laws aligned with EU directives, providing a secure and predictable environment for businesses.

In Case an investor is planning to establish a Kft. in Hungary or a corporate business setup, Opesh Group will be helping you in taking the right decision for setting up your business in Hungary and we will also guide you about how to follow the procedure while formulating your company in Hungary.

Types of Business which can be started in Hungary-

• Automotive Industry: Hungary is a major automotive manufacturing hub, attracting significant investments from global carmakers and component suppliers. Opportunities are particularly strong in electric vehicle (EV) production, battery manufacturing, and R&D for automotive technologies.
• ICT & Software Development: A rapidly growing sector with a skilled and competitive talent pool. Opportunities are abundant in software development, cybersecurity, FinTech, AI, data analytics, and IT outsourcing/shared service centers.
• Electronics Manufacturing: Hungary is a key European location for electronics production, including consumer electronics, industrial electronics, and automotive electronics.
• Logistics & Shared Service Centers: Its central location in Europe makes it an ideal hub for logistics, warehousing, and distribution centers. It’s also a popular destination for international companies setting up shared service centers (finance, HR, IT).
• Life Sciences & Pharmaceuticals: Hungary has a long tradition in pharmaceuticals and medical technology. Opportunities exist in drug manufacturing, R&D, and medical device production.
• Renewable Energy: Growing opportunities in solar energy production and component manufacturing, given Hungary’s commitment to increasing its renewable energy share.
• Tourism & Hospitality: Leveraging its thermal baths, historical cities, and natural beauty, opportunities are strong in hotel development, medical tourism, and specialized tourism experiences.

Advantages of Starting Business in Hungary-

• Highly Competitive Corporate Tax Rate: At 9%, it’s one of the lowest corporate income tax rates in the European Union.
• Strategic Central European Location: Serves as an excellent gateway to both Western and Eastern European markets, facilitating logistics and trade.
• EU Membership: Full access to the vast European Union single market, ensuring free movement of goods, services, capital, and people.
• Skilled & Competitive Workforce: A well-educated and productive labor force with competitive wage costs compared to Western Europe.
• Investment-Friendly Policies: Strong government support and attractive incentive programs for foreign direct investment.
• Developed Infrastructure: Modern transport networks (road, rail) and robust digital infrastructure.
• Dynamic Manufacturing Base: A strong and growing manufacturing sector, particularly in the automotive and electronics industries.
• Cultural & Historical Richness: Offers a vibrant cultural environment and an attractive quality of life, especially in Budapest.

Business Opportunities for Indians in Hungary-

There are excellent business opportunities in Hungary for new investors who are planning to start their business abroad. Hungary’s very competitive corporate tax, its strategic location, and its strong focus on high-tech manufacturing, especially in the automotive sector, present compelling avenues for Indian companies. Indian investors with strengths in IT services (especially automotive software, embedded systems, cybersecurity, IT outsourcing, R&D support), automotive components manufacturing (including EV parts, batteries), pharmaceutical production and distribution, food processing technology, renewable energy components/solutions (e.g., solar panel manufacturing), and setting up Shared Service Centers, can find significant potential for investment, partnerships, and market entry into Central and Eastern Europe.

Imports & Exports-

Many goods are imported and exported from Hungary. Imports and exports business is an ever-growing business in any country; however, you need to do proper R&D before investing in that product which you can import or export. You need to check whether that product is suitable for your target market and how much revenue you will be able to generate from that market.

Major items which are exported from Hungary:

• Machinery and transport equipment (especially automobiles and parts, electrical machinery)
• Manufactured goods (e.g., plastics, iron and steel)
• Chemicals and related products
• Food, beverages, and tobacco
• Pharmaceuticals

Major items which are imported in Hungary:

• Machinery and transport equipment
• Mineral fuels and oils
• Electrical equipment
• Chemicals
• Manufactured goods
• Foodstuffs

Major items traded between Hungary and India (as of 2023-2025 data):

• Exports from Hungary to India: Machinery and mechanical appliances, electrical equipment, automotive components, optical and medical instruments, pharmaceuticals, chemicals.
• Imports in Hungary from India: Organic chemicals, pharmaceuticals, articles of apparel and clothing accessories, textiles, machinery, iron and steel products, and foodstuffs.

Manufacturing-

Manufacturing in Hungary is a cornerstone of its economy, highly developed, and integrated into global supply chains, particularly in the automotive and electronics sectors. Opportunities are very strong in automotive production (vehicle assembly, EV batteries, components, R&D), electronics manufacturing (consumer electronics, industrial electronics), machinery and industrial equipment, and pharmaceutical production. The sector is characterized by advanced technology adoption and a focus on high-value-added processes.

Mining-

The mining business in Hungary is relatively limited compared to its manufacturing sector. Historically, coal mining (lignite and some hard coal) was significant for energy production, and this continues on a smaller scale. Other mining activities primarily involve the extraction of industrial minerals such as bauxite, aggregates (sand, gravel, stone for construction), and limestone. While there are some known reserves of other minerals, large-scale metallic mining is not a prominent feature of the Hungarian economy.

Major Indian companies which are currently working in Hungary-

Several major Indian companies have recognized and seized business opportunities in Hungary, leveraging its strategic location, competitive costs, and strong manufacturing ecosystem, especially in the automotive and IT sectors.

• Apollo Tyres: Has a significant state-of-the-art greenfield manufacturing plant in Gyöngyöshalász, producing tires for the European market. This is one of the most prominent Indian investments.

• Tata Consultancy Services (TCS): A major IT services and consulting firm with a significant presence, often operating Shared Service Centers and providing IT solutions.

• Wipro: Another leading Indian IT company with substantial operations and a client base in Hungary.

• Infosys: Also present in the Hungarian IT services market, offering a range of technology solutions.

• Tech Mahindra: Provides IT and network technology solutions, with a notable presence.

• Samvardhana Motherson International Ltd. (formerly Motherson Sumi Systems Ltd.): A key automotive component supplier with multiple manufacturing facilities in Hungary, supplying major carmakers.

• Richter-Gedeon (Pharmaceuticals): While a Hungarian company, it has strong international ties, and Indian pharmaceutical companies may have collaborations or distribution agreements.

• Various Indian Public Sector Banks: Some Indian public sector banks might have representative offices to facilitate bilateral trade and investment.

• GDP = $210 billion (nominal, 2024 est.)

• GDP Growth = 2.4% (2024 est.), 3.6% (2025 forecast by IMF)

• Ease of doing business rank = The World Bank’s ‘Doing Business’ report has been discontinued. However, Hungary is recognized for its proactive investment promotion, efficient business registration, and improving regulatory environment.

• GDP per Capita = $21,790 (nominal, 2024 est.)

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