Why to Invest in Hungary
Transcript of Why to Invest in Hungary
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Why to
in Hungary?
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Outline
Interesting Facts
Economic Indicators
Foreign Investment Advantages
Disadvantages
Conclusion
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Interesting facts of AutomotiveIndustry
Total number of companies: ~ 350
Suzuki and Opel began producing automobiles in Hungary in
1992 (the first produced there since before World War II!!)
Today, 17% of total Hungarian exports come from Audi , Opel
and Suzuki
Automotive sector employs 90,000 people in more than 350
car component manufacturing companies
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Conti.
Contributes 20 per cent of total exports.
Over 630 companies employing a total of 100,000 peopleare active in the sector.
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Economic Indicators
Source- Euromonitor
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Tradition of innovation
Access to a talented, creative, flexible and qualified labor pool
at competitive costs
Central location - a possible hub for Europe
Excellent local supplier network
The presence of major automotive suppliers in Hungary
Tax incentives & financial subsidies
Key Points To Invest In The HungarianAutomotive Sector
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The Hungarian Act on Foreign Investment
It specifies that investments by non-residents enjoy full legal protectionand security.
Bilateral Treaties in force guarantee additional protection to foreigninvestment.
Foundation of Companies
Foreign individuals or entities can establish new companies or mayacquire shares in existing companies in Hungary.
Returns Payable to Foreign Investors
No legal restrictions on payment of return on investments to foreignshareholders.
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Major Attractions
Industrial parksInvestors can choose from 160 operating industrial parks to
set up business on the basis of their business, cultural or
professional demand.
Up to the present, 4.1 billion USD capital has made its wayto these parks.
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Labor
Labor makes up 10% to 15% of car makers costs.
Wages/hour in Germany cost upto 40 Euros where as in Slovakiaand other central eastern europe it costs only around 7.5 Eurosapprox.
Infrastructure
Hungary is a potential logistics and production base thanks to its favorable
geographical position in Europe
Direct access to the Balkans and Eastern Europe
Four Helsinki-corridors running through the country.
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Automotive Cluster in Central Europe
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On the Contrary
Why not to invest in
Hungary?
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High Inflation and Government Debt Lead to
Higher Taxes
At more than 7% it is being prevented to join Euro forwhich it needs to bring to 3%.
Rising CostsGDP per capita was nearly $16,000 which is nearly
half that of the average Western European country
but 32% higher than other eastern Europeancountries such as Romania and Bulgaria.
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Low and slowing growth
Slowed growth could be indicative of the higher costsand the slowing of entrance by foreign companies,
but it would ultimately translate in the long run into
lower profit expansion.
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Conclusion
Objective
Trends
Outcome
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References
HITA
Euro monitor
Wikinvest KPMG
Erva Sirs Presentation
http://www.hita.hu/Content.aspx?ContentID=f2994e2d-f393-4908-b3db-1355ef864e6fhttp://www.euromonitor.com/hungary/country-factfilehttp://www.wikinvest.com/wiki/Investing_in_Hungaryhttp://www.kpmg.com/HU/en/IssuesAndInsights/ArticlesPublications/Documents/Investment-in-Hungary-2012-04.pdfhttp://www.kpmg.com/HU/en/IssuesAndInsights/ArticlesPublications/Documents/Investment-in-Hungary-2012-04.pdfhttp://www.wikinvest.com/wiki/Investing_in_Hungaryhttp://www.euromonitor.com/hungary/country-factfilehttp://www.hita.hu/Content.aspx?ContentID=f2994e2d-f393-4908-b3db-1355ef864e6f -
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