Located in the center of Europe, the Hungarian nation has been slowly recovering its imperial glory, but unlike in the past, this time it is not through conflicts and conquests, but through a business climate that attracts businessmen and entrepreneurs from all corners of the world to visit this magnificent country.

Ordinary people know Hungary from history books and its tourist charms. But this country is much more than its beautiful architecture, its goulash dishes and its beautiful songs by Béla Bartók. Hungary today ranks as one of the best places in all of Europe to do business and to reside for investors and wealthy individuals.

Hungary, because of its position, has always been the gateway connecting Western and Eastern European cultures. This role as a bridge between cultures has deeply marked the more than one thousand years of history of this country that has fought against any number of empires to make its own voice prevail.

Today, after surviving imperial occupations, the invasion of Nazism and the great danger of the Soviet Union, Hungary opens its doors to business and offers opportunities for business structuring and asset protection as very few European jurisdictions can.

This country that has always had a cosmopolitan vision for its culture and its political and economic decisions is today a beacon for those seeking unparalleled investment opportunities in Europe. It is no wonder that it is now one of our most select countries in which to invest.

Hungary is a former member of the Warsaw Pact and is a member state of the European Union. It has its own currency, the Hungarian forint (HUF), but in many places it is possible to pay with euros.

As in chess, where whoever dominates the center of the board has a much better chance of winning the game; investors and entrepreneurs in Hungary, located in the very center of the European continent, have the possibility to conduct business connecting East and West, Asia and Europe. 

The possibilities offered by this jurisdiction are impressive, and we are just scratching the surface.

At Mundo we have always believed that no matter what the case, when you are going to make a substantial investment in a new country, the most important thing is that you get to know the essence of the place and its people. 

Whether we are talking about opening a company, executing a tax optimization strategy or opening a family office, all are actions that require you to hire staff, lawyers or experts. In the best case scenario, you may have a partner who is a native of the country, but at some point you will come into contact with the local culture.

That is why it is vital that in addition to knowing the economic indicators and investment opportunities in Hungary, you know the characteristics of this country and its people. 

Truly knowing the jurisdiction in which you are going to invest can make all the difference in making your plans run as smoothly as possible. And that's why we want to show you everything you need to know about Hungary, perhaps the most diverse nation in Europe.

Let's start with the geography of the country and its main cities.

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Geography of Hungary

What stands out most about Hungary's geography is the location of this jurisdiction, which, as we have already mentioned, is in the heart of Europe. 

Hungary's strategic location allows it to be connected to the main land routes that connect western Europe with the Balkan region and the Mediterranean region. 

The ease of access to the rest of the European continent that this jurisdiction has makes the country a sort of central node where commerce, the economically active population and business ideas coincide to generate a favorable business environment.

As for the natural aspect of Hungary, we have a lot to talk about. Although the country is dominated by plains, there are also mountainous areas and forests full of beech and oak trees abound.

The Hungarian government is serious about protecting its natural wonders, which is why there are five nature reserves in the country that include everything from lush forests to lakes where you can feel nothing but undisturbed tranquility. They are perfect places for you to have an after-business retreat.

Perhaps the only unsurprising thing about this jurisdiction is its climate. The Hungarian climate is just what you would expect from a country located in the center of Europe: winters cool between 0º and -15º, while summers maintain temperatures between 27º and 35º generally. 

This climate, which is not out of the ordinary and does not reach unbearable extremes, allows the consumption behavior of people in Hungary to be predictable, which helps some businesses to plan their activity throughout the year.

Regarding its population, although one might think that because Hungary is located in the center of Europe it must have a large number of inhabitants, but the reality is different. This country barely has more than ten million inhabitants.

Most people in Hungary live in urban areas, and a large part of the Hungarian workforce is engaged in the service sector. This is ideal for foreign investors who want to get involved in versatile and export-friendly businesses.

Of course, if we talk about Hungarian geography, it is necessary to introduce you to its main cities and business hubs. In this country you have several options in case you are interested in choosing a city to reside or do business in Hungary.

Budapest

One of the most beautiful capitals in the world. The Hungarian capital is full of history and accumulates much of the turnover that takes place in the country. 

Budapest was once two different cities, Buda and Pest, separated by the beautiful blue Danube. But in 1873, these cities united to form the Austro-Hungarian capital of Budapest, which today competes with Paris for the position of European cultural capital.

Pest is the commercial half of Hungary's capital and is also where most of the entertainment, business and social events are located. 

Like most major European countries, Hungary has a unique cultural variety, combining the best classical music and art, including philharmonic concerts, chamber ensembles, opera and theater, with the richness and variety of traditional folk music. 

Debrecen

After Budapest, Debrecen is another of our favorite cities in Hungary. Debrecen is the cultural capital of Hungary, which can be compared to St. Petersburg in Russia for its cultural offerings. 

This city has been known to be the intellectual and cultural center of the country and has been the capital of Hungary several times throughout history (another reason why we compare it to St. Petersburg).

Heviz

Hungary is full of thermal baths and lakes. The capital alone has more than 20 thermal baths, of which the most popular is Szechenyi. But not only Budapest has hot springs.

One of the largest thermal lakes in the world is in Heviz. This city is located near Lake Balaton and is famous for its wide range of spas and resorts. This makes it ideal for real estate investment opportunities.

Pecs

If there is a city that can demonstrate the multicultural essence of the Hungarian people, it is Pecs. Pecs is special for being home to different ethnic groups that coexist peacefully with their habits, customs and even religious beliefs.

Pecs is one of Hungary's tourist centers, so investment opportunities in the service sector abound as in few other cities.

And since we are touring the wonderful Hungarian cities, let us now continue exploring the history of this wonderful jurisdiction.

Hungarian History

The essence of Hungary today lies in the mixture of cultures that shaped this country, as well as in the remnants of its imperial era and the importance that the value of freedom gained in this country after liberation from Soviet rule.

Hungary's fascinating history has its origins in the year 896, when a people called the Magyars came from Central Asia and settled in what we know today as Budapest. This was the seed that grew for a thousand years to finally give rise to the modern state of Hungary. 

In a sense, we can say that the modern nation of Hungary was born when the first Christian king, Stephen I, created the Kingdom of Hungary. This king was the first to unite and organize the different Hungarian tribes living in the area and to establish a clear set of strict rules that would have to be followed by everyone in the kingdom.

He established the concept of private property and inserted Hungary into Christianity. This particular moment is key to Hungary's cultural lineage as Stephen I chose the Roman crown rather than choosing the crown of the Eastern church, which marked Hungary's westernized leaning throughout its history. 

This Western leaning would be appreciated centuries later, when it was evident that Hungary, although dominated by the Soviet bloc, was nothing like the other Eastern European countries.

Hungary is the embodiment of survival. Since the beginning of its history as a country, Hungary has gone through the most decisive events in Western history, such as the Mongol invasions, the fight against the Ottomans and the Black Death. But it has also survived the two most destructive forces of the 20th century.

This jurisdiction was occupied by the Nazis in 1944 during World War II and lost more than half a million Jews during the Holocaust. After World War II, Hungary became controlled by the Soviet Union from 1949 to 1989, although it managed to maintain a good part of its independence.

Since Hungary managed to impose its liberal view of politics and economics even under Soviet rule, it had to make little effort to transform itself into a Western liberal economy. 

The leaders who came after the fall of the Soviet Union pursued even more liberal policies with the aim of integrating Hungary into the Western world and, as a result of these efforts, in 2004 Hungary finally joined the European Union.

Thus we arrive at today's Hungary, a true European paradise where economic and individual freedoms are highly respected. One of the best countries in Europe to live and do business.

The Hungarian Lifestyle 

In general, Hungary is a country where you can feel safe in most places you visit. By day and by night the major cities have a burst of energy and activity that is second to none of the world's major capitals.

With the world slowly but surely overcoming the coronavirus pandemic, activity and street life has been steadily increasing in Hungarian cities.

If you ask yourself what Hungarian people are like, the first thing that comes to mind is that they are diverse. Very different cultures, religions and ways of life coexist in this country, but all in harmony. This cultural diversity makes the people of this country open and especially receptive to foreigners.

Perhaps the most difficult thing about Hungarian culture for a foreigner to cope with is the language. It is not particularly easy to learn. Fortunately, you will have no problem living and doing business in Hungary because English is widely spoken, especially among younger people and professionals.

One thing to note about living in Hungary is that, although the country is an official member of the European Union, it is not a member of the Monetary Union. This means that the Hungarian forint (HUF) is the country's official currency. But don't worry, most of the stores handle Euros, and the cities are full of exchange offices, some of which even operate extended hours.

That's the basics of life in Hungary, but the truth is that this country doesn't stand still. For a Hungarian resident it is very difficult to get bored or run out of opportunities to marvel at the cultural offerings that exist.

Hungary has something special for everyone. 

-If you are an avid consumer and admirer of culture, you can attend operas and concerts, or enjoy the stunning and varied architecture; 

-If you are a foodie, you will enjoy the blends present in Hungarian dishes and its fine wine; and, 

-If you prefer something more relaxed, you will find refuge in its natural reserves and why not, in its numerous thermal waters.

One thing is certain, and that is that you will always have something to do in Hungary, no matter what your tastes are.

Now that you know the country better, it's time to talk about doing business in Hungary.

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Doing Business in Hungary

If you have come this far, surely Hungary has already caught your attention for its fascinating history, its lifestyle and its privileged location within Europe. But now it's time to talk about the advantages that this country offers to those who want to invest or start a business.

Hungary has been opening spaces during the last years to become one of the most attractive jurisdictions in the European continent thanks to its fiscal policies and its economic performance mainly.

At a brief glance, these are the most relevant data of Hungary regarding its business climate:

-The country has maintained an average GDP growth of 4.9% since 2019. Although Hungary also suffered an economic contraction as a result of the coronavirus pandemic, 2021 economic forecasts indicate 4-6% growth again.

-It has a very low corporate tax rate compared to the rest of Europe, it is only 9%.

-62.8% of its workforce is in the service sector.

-The government promotes international investments in sectors such as:

-Real estate

-Green industry

-Agriculture

-Innovation and technology

-Manufacturing

-Even after going through the coronavirus pandemic, the unemployment rate is expected to be only 4% in 2021, with a view to decrease in the coming years.

-Salaries in Hungary are not as high as in other EU countries, making it ideal for hiring skilled talent with high levels of profitability.

Hungary makes it very easy for foreign investors by having the lowest corporate tax rate in Europe, that, in comparison with the economic incentives that the Hungarian government offers through its investment opportunity promotion agency, has contributed to the commercial attractiveness of this country.

Hungarian legislation also makes it possible to execute asset protection and tax planning strategies of the highest standard. An example of this is the structure known as asset management foundation, which is one of the best ways you have to shield your wealth in Hungary.

The banking system and infrastructure in Hungary functions at exceptional levels. And opening a company and a bank account is quite simple for nationals and foreigners alike. 

As a result we have a jurisdiction with a fast growing economy, favorable tax laws, low costs and a very high quality of life. 

Hungary is definitely one of our favorite places to do business. If you think so too, now you just need to know which authorities you will have to deal with when investing in this country.

Hungarian Government Agencies

Opening a business in Hungary is simple thanks to the pro-business policy that this country upholds, but still, any investor or entrepreneur must deal with some government agencies to carry out the paperwork, and in some cases the help of a qualified team of lawyers is required.

These are the main Hungarian government agencies that any investor or entrepreneur will have to deal with in their process of opening a business in Hungary:

Hungarian Investment Promotion Agency (HIPA): international investors and entrepreneurs will be primarily interested in this Hungarian government agency whose purpose is to encourage foreign investment and manage the tax and economic incentives that apply to those who fall into its categories.

Hungarian Commercial Registration Court: this is the place where the registration of legal structures in Hungary takes place, anyone who wants to do business in Hungary must first register with this authority.

National Tax and Customs Administration: this is the national tax authority in Hungary, and although many times registrations and obtaining tax numbers involve local chambers and offices, it is a good idea to be clear about the central authority when it comes to taxes.

Hungarian Financial Supervisory Authority (PSZÁF): investors who are interested in starting businesses that have to do with financial or insurance activities need approval from this authority.

Hungary is full of possibilities, and each investor will have a particular path when it comes to dealing with the Hungarian central authorities. But broadly speaking, these four are the most important to get the big picture of who you should approach to do business in Hungary.