Beyond paprika - Hungary as a promising business location for Finnish companies
Judit Szigeti, October 2015
LogMeIn, Ustream, Enbrite.ly, Prezi: what is common among these companies? All of them have Hungarian roots.
LogMeIn was founded in Budapest, and has its development center still in the Hungarian capital. Internet service provider Ustream is a classic example of a successful American-Hungarian cooperation, while Enbrite.ly is well known already in Finland, winning the grand prize for the best startup at Slush 2014. Prezi proved that a company started in Budapest can become a global success and helped to turn the Hungarian capital among the six most promising cities in the European startup scene for 2015. Budapest is cheaper than Western European cities, corporate tax is low, educational level is high and incubators can help to forge networks.
But not only startups choose Budapest: a lot of international companies have recently selected Hungary as one of their future business locations: Audi, Mercedes Benz, Lego, Apollo Tyres, Honeywell, Takata, ZF, Festo, Schwarzmüller or Nokia Networks. Many of these recent investment decisions are the result of the Hungarian government’s intention to create the region’s most investor-friendly business environment in Hungary. Various forms of refundable and non-refundable funding are available to encourage investments in both manufacturing and high-value added sectors such as R&D and service centers. According to the fDi Magazine, Budapest has been the most attractive city for foreign direct investment in Eastern Europe in 2014-2015: many successful investment projects were implemented in the previous years. The best example is Nokia Networks Hungary that signed a strategic cooperation agreement with the Hungarian government, receiving EUR ~700K grant in 2011, and was awarded the title “Company of the Year” for R&D Investment in 2014.
Why Hungary? Economic growth rate is improving in Hungary. Hungary is among the most successful countries in the EU in combating unemployment. Unemployment rate recently has fallen to 7.4 percent. Last year the GDP growth was 3.5 percent, the second highest in the EU. The automotive sector is one of Hungary’s leading industries, accounting for 20% of total exports, while electronics manufacturing and research are among the main drivers of innovation and economic growth in the country. Hungary is a net exporter of agricultural and food products, since the country has very good agricultural characteristics (perfect land quality, favorable hydrography, plenty of sunshine hours). Hungarian export products are already well-known on the Finnish market (paprika, Tokaji wines, plum, salami). The total ban on the use of GMOs is another competitive advantage for Hungary.
Hungary has many great assets to offer to Finnish companies, from investment projects to subcontracting. For further information please visit the website of the Hungarian Investment Promotion Agency (http://hipa.hu/en/our-services/about-hipa/) and the Hungarian National Trading House (http://tradehouse.hu/).
Furthermore, Embassy of Hungary will organize a Business and Innovation forum in Helsinki on the 21st October 2015. The keynote speaker will be Mr. László Szabó, former CEO of Teva Hungary, currently Deputy Minister of the Hungarian Ministry of Foreign Affairs and Trade. Further high level presenters from Hungary include CEOs of the Hungarian Investment Promotion Agency; the Hungarian National Trading House and the Hungarian National Research, Development and Innovation Office (more information and registration: https://kauppakamari.fi/en/2015/09/08/hungarian-business-innovation-forum-21-10-2015-helsinki/ or contact directly the Embassy of Hungary at email@example.com).
This article was written by Judit Szigeti
Embassy of Hungary will organize a Business and Innovation forum in Helsinki on the 21st October 2015
Join Team Finland Visit to Hungary in November 2015