Hungary

Investing

FDI in figures

Cumulated FDI in Hungary until en 2007: 62818 million EUR

Foreign Direct Investment	2004	2005	2006
FDI of inward flow (millions USD)	4,506	7,619	6,098
FDI inward stock (millions USD)	n.c.	n.c.	81,760.0
Performance Index*, world ranking	45	42	38
Potential Index**, world ranking	37	41	n.c.
Number of Greenfield investments	222	205	233
FDI inwards (in % of GFCF)	19.7	30.1	24.8
FDI stock (in % of GDP)	n.c.	n.c.	73.0

Source: UNCTAD, World Investment Report

Note: * The UNCTAD Inward FDI Performance index is based on a ratio of the country's share in global FDI inflows and its share in global GDP. ** The UNCTAD Inward FDI Potential index is based on 12 economic and structural variables such as GDP, foreign trade, FDI, infrastructures, energy use, R&D, education, country risk.

Why you should choose Hungary

Strong points: • Hungary is among the most advanced countries in Central Europe in terms of reforms.

• Its financial system is one of the most well developed in the region.

• Its infrastructures, its workforce and its framework of regulations are high quality.

• Integration in the EU reinforces its political and economic stability.
Weak points: • The situation of public finances is still in decline and State debt stays at a high level.

• Foreign accounts are largely and persistently unbalanced.

• Considering its economic opening up, the country is dependent on the economic situation of its main trade partners in the EU.

• Cover of financing needs rests partly on volatile capital. Levels of exchange currency reserves are relatively low. Foreign debt remains relatively high.
Government measures to motivate or restrict FDI: Attracting foreign investment is a priority for the Hungarian government. The Ministry of Economic Affairs established the Hungarian Investment and Trade Development Agency (ITDH) in 1993, and this agency continues to help companies looking to make major investments in the country.
ITDH has set up a “one-stop-shop” service for potential large investors to maintain a competitive environment and attract multinational companies.
Bilateral investment conventions signed by Hungary: Consult the website of the European Union.

Administrative procedures relative to foreign investment

Freedom of establishment: Guaranteed
Acquisition of holdings: Up to 100 percent foreign ownership is permitted with the exception of designated "strategic" holdings in some defense-related industries. The current government’s renewed privatization concept is opening some of the strategic holdings to private participation. Foreigners investing in financial institutions and insurance must officially notify the government but do not need advance authorization. Foreign financial institutions may operate branches and conduct cross-border financial services in Hungary, in keeping with OECD commitments. Currently, foreign firms control 2/3 of manufacturing, 90% of telecommunications and 60% of the energy sector.
Obligation to declare: For contact information at national customs authorities, please visit the European Union website or the Hungarian Customs Office.
Competent organization for the declaration: Hungarian Customs and Finance Guard
Requests for specific authorizations: To determine if a license is required for a particular product, check the TARIC.
Hungary, like many EU Member States, maintains its own list of goods subject to import licensing (arms, precious metals etc.)