Investing in Hungary
Unlock Hungary’s thriving business landscape and lucrative investment opportunities. Discover investment directions that not only generate profits but also secure a privileged residence permit, known as the Golden Visa.
Hungary’s GDP in 2024
Increase in FDI in 2023
Corporate tax rate, the lowest in the EU
Investor residence permit validity
Hungary’s economy: an overview
Hungary’s economy stands out for its openness to global markets and its significant attraction of foreign direct investment (FDI). The nation has been proactive in drawing FDI, with figures reaching €6.5 billion in 2022 and doubling to €13 billion in 2023.
As of 2024, Hungary’s Gross Domestic Product (GDP) has reached $222 billion, with a GDP per capita of $23.010. Forecasts by economists suggest a continued upward trajectory for these economic indicators in the coming years.
The service sector, making up two-thirds of Hungary’s GDP, excels in tourism, trade, and finance. The country also leads in diverse industries such as food processing, pharmaceuticals, motor vehicles, IT, metallurgy, machinery, and electronics production, standing as Central and Eastern Europe’s top electronics producer.
Hungary has established strong trade relationships, particularly within the European Union, with Germany being its most significant trading partner. Other important partners include Austria, China, Poland, and Slovakia.
Hungary’s GDP growth over the last 10 years (in billion USD)
5 reasons to invest and do business in Hungary
1. Low taxes
Taxes in Hungary are lower than in the majority of European countries.
Personal income is taxed at 15%, and corporate tax is 9%. The stamp duty for the property purchase is 4%.
2. Economic stability
Hungary’s economic stability is influenced by its strategic integration into global markets, EU membership, and diverse industrial sectors.
The country benefits from foreign direct investments, aided by competitive corporate tax rates and government incentives that empower entrepreneurs to grow their businesses.
3. Access to the EU market
As a member of the European Union, Hungary operates within a stable and predictable regulatory environment, adhering to EU standards and regulations. This membership ensures the free movement of goods, services, capital, and labour.
4. Strategic location
Hungary’s central location in Europe provides easy access to the European Union’s single market, facilitating trade and logistics. The country’s position bridges Eastern and Western Europe, making it an ideal base for companies expanding their operations across the continent.
5. Residence permit for 10 years
Foreign investors in Hungary’s real estate, investment fund units, or businesses are eligible to obtain a residence permit valid for 10 years. The minimum required investment is €250,000.
Taxes in Hungary are lower than in the majority of European countries.
Personal income is taxed at 15%, and corporate tax is 9%. The stamp duty for the property purchase is 4%.
Hungary’s economic stability is influenced by its strategic integration into global markets, EU membership, and diverse industrial sectors.
The country benefits from foreign direct investments, aided by competitive corporate tax rates and government incentives that empower entrepreneurs to grow their businesses.
As a member of the European Union, Hungary operates within a stable and predictable regulatory environment, adhering to EU standards and regulations. This membership ensures the free movement of goods, services, capital, and labour.
Hungary’s central location in Europe provides easy access to the European Union’s single market, facilitating trade and logistics. The country’s position bridges Eastern and Western Europe, making it an ideal base for companies expanding their operations across the continent.
Foreign investors in Hungary’s real estate, investment fund units, or businesses are eligible to obtain a residence permit valid for 10 years. The minimum required investment is €250,000.
Tax rates in Hungary in comparison to other EU countries (in %)
Investment opportunities in Hungary
Real estate
Hungarian property values have been on a steady climb. From Q1 2014 to Q1 2023, there was a remarkable increase of 231% in prices. The prime locations for property investments include Budapest, Debrecen, and the scenic towns around Lake Balaton.
Budapest leads as the most costly real estate market in the country, with prices per square metre ranging between €2,500 and €3,500.
For landlords of 1 to 3-bedroom apartments, rental income can range from €450 to €1,000 monthly in Budapest, and from €300 to €700 in other regions. The expected annual yield is approximately 3.5%.
Business
In Hungary, foreign nationals have the right to own businesses entirely, with the possibility of holding 100% of a company’s equity.
The favoured business structures include:
- Private companies limited by shares, requiring a minimum capital of HUF 3,000,000 (approximately €7,600);
- Limited liability companies (LLCs), needing a minimum capital of HUF 5,000,000 (about €12,700).
Other business formats available include general partnerships, limited partnerships, and trade associations. Foreigners are also allowed to establish branch offices or representative offices in Hungary.
Securities
Investing in Hungary’s capital market allows purchasing various securities, including stocks, bonds, and mutual funds. Investors engaging in the purchase of securities are required to adhere to the regulations set by the Hungarian National Bank and the Budapest Stock Exchange.
Both residents and non-residents have access to Hungarian Government Bonds, which can have maturities of up to 20 years. Presently, the average interest rate ranges from 6.2% to 6.8%.
Both capital gains and dividends from investments are taxed at a rate of 15%.
Key sectors for profitable investment in Hungary
Real estate
Automotive industry
Food production
Electronics
Tourism
Financial services
Technology and innovation
After running a successful business in India, I decided to expand into the European market. I considered several countries but ultimately chose Hungary, largely due to its attractive corporate tax rate. While the corporate tax rate in most EU countries is over 20%, Hungary offers a much lower rate of just 9%. Compared to India’s 25%, this was a compelling deal.
In 2017, I launched my tech startup in Hungary with a modest office and a five-member team, focusing on AI solutions for the European market. We’ve since increased our team tenfold and significantly broadened our market reach, showcasing Hungary’s exceptional environment for ambitious tech startups. This intense journey has been rewarding, with our annual turnover in Europe now reaching approximately €5.5 million.
Investor from India,
owner of a tech company in Hungary
Investments qualifying for Hungarian residency
Hungary Golden Visa program grants a 10-year residence permit to investors who contribute a minimum of €250,000 to Hungary’s economy. There are three investment options:
- Purchase of residential property.
- Investment in local real estate funds.
- Donation to an institution of higher learning.
To be eligible for the program, investors must be over 18, non-EU and non-EEA citizens, have a clean criminal record, purchase health insurance, and possess a legal source of income.
The investor’s family members may also participate in the program. It is possible to include a spouse and children under 18.
Trends in Hungary’s House Price Index
Purchase of real estate fund units, €250,000+
To qualify for residency, a candidate must invest at least €250,000 in fund units, with a minimum maturity of 5 years. Only investments in real estate funds are eligible. Following the investment, the Hungarian National Bank issues a certificate of investment as evidence of the completed transaction.
Real estate purchase, €500,000+
Under the Hungary Golden Visa program, investors are eligible to purchase real estate valued at a minimum of €500,000. Only investments in residential properties qualify. Prior to making a purchase, candidates must obtain permission from Hungary's Land Registry. Furthermore, the sale and purchase agreement includes a clause that prohibits the sale of the property for 5 years.
Charitable donation, €1,000,000+
Candidates for Hungarian residency may qualify by donating €1,000,000 to a higher education institution. To be eligible, these institutions must be managed by foundations committed to the public interest. The donation will support activities in education, scientific research, and cultural or innovative projects.
Benefits of the Hungary Golden Visa
Visa-free travel within the Schengen Area
A low cost of living
Opportunities for tax optimisation
Access to high-quality healthcare and education
The ability to open accounts in European banks
Frequently asked questions
Why is Hungary attractive to foreign investors?
The Hungarian economy offers significant benefits, including:
- low taxes,
- stability,
- international trade,
- access to the EU market.
Hungary also appeals to investors interested in obtaining a Hungarian residence permit for 10 years, which is granted to foreigners who invest at least €250,000.
Where to invest money in Hungary?
The most popular choice investors make is purchasing real estate. In 2022, around 8,000 foreigners bought properties in Hungary.
Can foreigners buy property in Hungary?
Yes, foreigners are allowed to purchase almost any type of property in Hungary, with the exception of farmland and heritage-listed assets. Moreover, if they invest in real estate valued at more than €500,000, they are eligible to obtain the Hungary Golden Visa.
Is Hungary a good place to buy property?
Yes, property prices in Hungary are relatively low compared to other European countries, and they have been consistently increasing. Between Q1 2014 and Q1 2023, prices rose by 231%.
Is real estate expensive in Hungary?
Compared to many European countries such as Germany, Spain, or France, real estate in Hungary is affordable.
On average, in Hungary, the cost per square metre is approximately €2,000 to €2,700. For context, prices in Germany are typically two to three times higher.
Is Hungary a good place to start a business?
Hungary is favoured for business startups due to its strategic Central European location and low corporate tax rate. The country provides a range of incentives to attract investment, such as cash subsidies and tax benefits. This supportive backdrop, alongside a skilled workforce and global market integration, renders Hungary an attractive option for entrepreneurs and investors.
Can a foreigner set up a company in Hungary?
Yes, foreigners can establish companies in Hungary. Key economic sectors include IT, tourism, real estate, food production, and electronics.
How to start a business in Hungary?
To start a business in Hungary, foreigners must complete several steps:
- Preparing documents.
- Opening a bank account.
- Registering the company with the Hungarian Court of Registry.
- Obtaining a tax identification number.
- Registering with the Hungarian tax authority, the local municipality, the Chamber of Commerce, and the Central Administration of National Pension Insurance.
- Providing employee data to the tax authority.
The entire process can typically be completed within 4 to 5 working days.
What is the minimum capital for a company in Hungary?
The minimum capital required for a private company limited by shares in Hungary is HUF 3,000,000 (approximately €7,600), and for a limited liability company (LLC), it is HUF 5,000,000 (around €12,700). These amounts must either be deposited into the company’s bank account or secured via bank guarantees.
How much does it cost to start a business in Hungary?
The cost of starting a business in Hungary varies by the type of business, location, scale, and industry. Essential expenses include obtaining a registered address, opening a bank account in Hungary, and hiring an accountant.
What business can I start in Hungary?
In Hungary, foreigners have the freedom to start any type of business. Consider exploring sectors such as game development, digital product design, operating a gift store or hotel, or venturing into software development.
What are the benefits of investing in Hungary?
Investing in Hungary offers several advantages, including:
- easy access to the EU market;
- low corporate tax rates;
- economic stability;
- the opportunity to obtain a 10-year residence permit.
Get in touch today
Our team assists international clients in navigating the process, minimising risks, and safeguarding their finances. Submit an application to discover strategies to secure your Hungary Golden Visa.