Business opportunities for Finnish companies in Hungary

Business opportunities for Finnish companies in Hungary Judit Szigeti Embassy of Hungary in Helsinki Business meets culture Lahti 6th October 2016 ...
Author: Adam Taylor
11 downloads 0 Views 3MB Size
Business opportunities for Finnish companies in Hungary Judit Szigeti Embassy of Hungary in Helsinki

Business meets culture Lahti 6th October 2016

Content 1. Who we are

2. Why Hungary is a first class investment and trading destination? 3. State subsidies 4. Business opportunities 5. Business meets culture…

Who we are?

Embassies in business • From 2014: new priority of the Hungarian Ministry of Foreign Affairs and Trade is business and trade promotion. • As part of the economic diplomacy the Hungarian government sent a foreign trade specialist to every diplomatic mission. • The intention in Finland is: – to enhance Hungarian-Finnish business relations; – to support the foreign trading activities of Hungarian SMEs; – to encourage and help Finnish companies invest and expand their business in Hungary.

Background institutions • Hungarian Investment Promotion Agency (HIPA) • Hungarian National Trading House • Hungarian Chamber of Commerce and Industry

Why Hungary is a first class investment and trading destination?

Best to Invest 2015

Hungary Ranked No. 1 in Eastern Europe • Site Selection Magazine’s prestigious award goes to Hungary in 2015

Top 10 eastern European Cities Rank

City

Country

1 2 3 4 5 6 7 8 9

Budapest Wroclaw Katowice Plzen Moscow Brno Poznan Ostrava Bratislava

Hungary Poland Poland Czech Republic Russia Czech Republic Poland Czech Republic Slovakia

10

Prague

Czech Republic

Budapest has been ranked the most attractive city in Eastern Europe in 2014-15. Source: www.fDiIntelligence.com, European Cities and Regions of the Future 2014/15

Competitive labour costs in the Business Economy

Higher education Well trained, creative and flexible human capital Number of institutions in higher education

66

Number of locations

185



91.3% of fresh graduates has English language skills

Number of students in higher education

291,334



Majoring in:

2nd most popular foreign language: German (67%)

 Business and Administration

63,990

 Technical education

60,674

 Informatics

9,865

 Foreign languages

8,083

language certificate and

 Number of tertiary level graduates

55,349

computer skills



Followed by: French (14%), Russian, Italian, Spanish



All degrees include foreign-

. Source: Statistical Yearbook of Education Academic year 2013/2014

Wage adjusted labour productivity

Source: Eurostat

Corporate tax rates in the V4 countries (2015) V4 countries Corporate income tax

Source: KPMG, 2015, Deloitte

Slovakia

22%

Czech Republic

19%

Poland

19%

Hungary

10%/19%

The tax rate for the first HUF 500 million (approximately EUR 1.62 million) of the tax base is 10%; beyond HUF 500 million, it is 19%. In regional comparison the Hungarian tax rate is very favourable.

Personal income tax rates in the V4 countries, (2015) V4 countries Personal income tax Slovakia

19% 25%

Poland

18% 32%

Czech Republic

15%

Hungary

16% → 15% Source: KPMG, 2015; tradingeconomics.com

VAT 27/18/5/0% • The general VAT rate is 27% • reduced rates are – 18% (e.g. bread, milk, accommodation services) and – 5% (e.g. journals, books, medicines and central heating).

• VAT-exempt services are mainly banking services, insurance, investment-related services, sale and rental of real estate.

Number of days to start a business

Source: World Economic Forum: The Global Competitiveness Report 2014-2015

Favorable location NY -6 hrs, Tokyo +7 hrs Location: a market of 507 million EU citizens with access to the market of 205 million people of Russia, Ukraine and the Western Balkan countries

Total length of motorways (km) (2012) 1600 1400 1200 1000 800

1515 1365

600 751

400

419

200 0 Hungary Source: Eurostat

Poland

Czech Republic

Slovakia

Quality of roads in the V4 countries (2014) Question: In your country, how do you assess the quality of the roads? [1 = extremely underdeveloped – among the worst in the world; 7 = extensive and efficient – among the best in the world]

5

4,2 3,7

3,7 3,5

4

3

2

1

0 Hungary

Source: World Economic Forum: The Global Competitiveness Report 2014-2015

Czech Republic

Slovakia

Poland

Results of The Visegrad Group’s investment agencies (2015)

Source: HIPA, PAIiIZ, CzechInvest, SARIO

MAIN INVESTMENT DECISIONS IN THE NEAR PAST • • • • • • • • • • • • • • • • • • • • •

Computacenter: shared service center GE: shared service center Emirates: shared service center Pactera: shared service center Systemax, shared service center Greif, shared service center Coloplast, medical devices manufacturing OPEL, engine manufacturing ZF Lenksysteme, electric steering systems Infineon: semiconductor components producing Hankook, tyre manufacturing Hewlett-Packard, IT Sauflon, contact lens manufacturing Samsung: electronics manufacturing Procter & Gamble, personal care products manufacturing General Electric, establishment of an oil & gas branch Bridgestone, tyre manufacturing Thai President Foods, instant noodle manufacturing Bosch, R&D facility Flextronics: electronics manufacturing DHL: Express logistics

WHOM ARE WE PROUD OF – Major American investors in Hungary

Nokia’s R&D investment in Hungary 2014 • In 2014 Nokia was investing EUR 9.8 million at its research and development centre in Budapest. • Budapest is one of Nokia’s biggest global technology centres, and its role will be strengthened in future. • Nokia decided to expand its business in Hungary because: • the country offers a number of well-trained and creative engineers, • competitive price levels. • As a result of the investment, 150 new jobs were created in Hungary. • The Hungarian Government was supporting the investment with EUR ~700.000 grant.

Finnish business presence in Hungary • More than 30 companies with Finnish capital • Finnish FDI ca. EUR 60 million in Hungary. • Finnish-Hungarian trade exceeds EUR 0.5 bn in total • There is room to expand!

Business opportunities

Recent and possible future areas of Finnish-Hungarian cooperation Manufacturing Industries and Energy: • Agriculture and Food Industry • Automotive industry and Electronics • Renewable Energy: environment and forest industry • Chemical industry

Knowledge-based Industries and Services: • Medical, Recreational and Wellness Tourism • Software and digital media • R&D and Innovation

R&D: Strong scientific capacity Country

The quality of scientific research institutions The World Economic Forum ranks Hungary Nr. 23 within 144 countries

Ranking

Switzerland

1

United Kingdom

2

Israel

3

United States

4

Belgium

5

Hungary

23

Austria

24

Slovenia

33

Czech Republic

36

Croatia

53

Romania

55

Poland

63

Slovak Republic

65

Serbia

69

Source: WEF Global Competitiveness Report, 2014-2015

Prestigious international awards received lately by Hungarian scientists •

The first ever Brain Prize in 2011 was jointly awarded to three Hungarian neuroscientists, Péter Somogyi, Tamás Freund and György Buzsáki



Endre Szemerédi has received the 2012 Abel Prize for mathematics („Nobel prize” for maths) for his fundamental contributions to discrete mathematics and theoretical computer science



Network scientist Albert-László Barabási received the Lagrange-CRT Foundation Prize in 2011 for his research on complex networks in natural, technological and social systems



In 2011, the Innovact Campus Awards grand prize was awarded to the STERY-HAND project, presented by Tamas Haidegger from the Budapest University of Technology and Economics

National R&D&I Strategy 2020 •

Active support from governmental R&D&I policy



Renewing and strengthening the innovation system as a whole



Transforming Hungary to a sustainable knowledge economy



Key participants of the national innovation system will be significantly reinforced



Increasing gross domestic expenditure on R&D by 0.6% (to 1.8%) by 2020

ICT- A booming sector •

About 13.7% of the Total Value Added comes from ICT companies (20% with multiplier effects)



ICT sector has shown a constant growth even during the economic downturn



Around 311,000 employees work directly in the sector (400,000 people with indirect employees)



Hungary ranks third place in the EU according to the rate of ICT employees within the population



There are more than 10 Science Parks in Hungary

Source: ICT Association of Hungary

Centers of IT knowledge Eger IT Students:340 freshmen: 84

Győr IT Students:885 freshmen: 265

Sopron IT Students:108 freshmen: 23

Veszprém IT Students: 463 freshmen: 159 Zalaegerszeg IT Students:75 freshmen: 28

Miskolc IT Students: 714 freshmen: 154

Budapest IT Students:8,527 freshmen: 2,598

Székesfehérvár IT Students: 192 freshmen: 192

Dunaújváros IT Students:607 freshmen: 134

Gyöngyös IT Students:121 freshmen: 16

Kecskemét IT Students:548 freshmen: 118

Szeged IT Students: 1,253 Nagykanizsa IT Students:52 freshmen: 9

Nyíregyháza IT Students: 233 freshmen: 55

freshmen: 206 Pécs IT Students: 788 freshmen: 180

Debrecen IT Students: 1,677 freshmen: 438

Innovative Hungarians in ICT • LogMeIn - The application allows the more than 125 million users worldwide to control their computer remotely via a client program, a browser and a mobile device. • Prezi – online presentation tool with a special set of graphic and functional tools. In 2010 the company was awarded with the European Seal of eExcellence Platinum Award. • Ustream – provides video streaming services to more than 80 million viewers and broadcasters. Over 180 employees in San Francisco, Los Angeles, and Budapest. Source: IDC Hungary, 2012

Digital Hungary program – Why? • dominant ICT sector in international comparison (appr. 12% of Hungary’s GDP) • but limited use of info-communication tools, especially among citizens and SMEs • restricts the full utilization of growth potentials

Solution: in 2014 the Hungarian Government launched a 7year program aimed at the comprehensive development of digital administration and digital economy (National InfoCommunication Strategy 2014-2020).

Business opportunities in the program • ensuring that every Hungarian household has access to high-speed internet by the end of 2018 (at least 30 Mb/sec in roughly 3.5 million households – estimated total investment over EUR 320 million) • developing smart cities • increased use of IT by enterprises (e.g. management support software, websites, e-Commerce, etc.) • developing IT competencies all across the various age and social groups of population • widening the scope of e-Government services (e.g. full digitization of business-related administration by 2020) • investing in hardware manufacturing and software developing enterprises

Tax incentives for digital network development • Service providers are exempt from the utility tax for 5 years for network extension as well as for network upgrading providing at least 100 Mb/sec internet • Subsidies available from August 2015 in less developed regions under the EU structural and cohesion funds program GINOP: – available in areas where network developments are otherwise not commercially viable – HUF 68 billion non-refundable grant (EUR 218.0 million or USD 245.5 million) – HUF 10 billion refundable subsidy (EUR 32.1 million or USD 36.1 million)

State subsidies

STATE SUBSIDY Centralized

Decentralized Local municipalities

Tax allowances

Cash grants

 Development tax allowance  Social tax allowance

State subsidy

EU co-financed tenders

 Subsidy Based on Individual

 Regional

Government Decision (EKD)

 Environmental protection

 Job creation subsidy

 SME development

 Training subsidy

 R&D&I

 Workshop establishment aid

 Training

Free Enterprise Zones

 Employment of disadvantaged workers

EUR 25 billion

1080 communities

EKD Subsidy (Individual Government Decision ) Type of subsidy, volume

Application, legal background

- Non refundable

- Managing Authority: KKM/HIPA

- Post financed cash grant

- Submission of Request List (RL)

- Based on the decision of the Government

- Gov. Decree No. 210/2014 (VIII.27.)

Eligibility criteria, undertakings Region

Asset

>=EUR 10 m >= 50 fte

Preferred Developed

Job creation

>= EUR 20 m >= 100 fte

>=EUR 10 m >= 100 fte

Training subsidy • minimum 50 new positions • aid amount: – max. EUR 0,5 M (HUF 155 M) if job creation is between 50-250

– max. EUR 1 M (HUF 310 M) if job creation is between 251-500 – max. EUR 1,5 M (HUF 465 M) if job creation is between 501-750 – max. EUR 2 M (HUF 620 M) if job creation is >750 • maximum aid intensity: 50% (of the eligible costs) • granted in all regions of Hungary and it is above the maximum intensity ratio fixed by the European Union • letter of intent or application form shall be submitted to Ministry for National Economy

Development Tax Allowance Type of subsidy, volume

Application, legal background

- Post financed

- Managing Authority: NGM/NAV

- Corporate tax allowance

- Submission of notification/application

- Up to 80% of corporate tax, for 10 years

- Gov. Decree No. 165/2014 (VII.17.)

Eligibility criteria, undertakings Region

Asset

Preferred

>= HUF 1 billion >= 75 fte

Developed

>= HUF 3 billion >= 150 fte

Job creation

>= 1 fte

Social Tax Allowance Type of employees Below the age of 25 years* Above the age of 55 years Unskilled Long-term unemployed Mothers with small children Researcher or developer employee with PhD or higher academic degree PhD students

Contribution payable (up to gross wage of HUF 100 000) The contribution payable will be halved (27% → 14%) *entrants are exempted for two years (27% → 0%) Initial two years - no contribution payment will be required (27% → 0%) Third year - half of the contributions is to pay (27% → 14%) up to gross wage of HUF 500 000 27% → 0% up to gross wage of HUF 200 000 27% → 12,5%

Business meets culture…

Beautiful places in BUDAPEST

House of Parliament

Fisherman’s Bastion

Matthias Church

Royal Palace

City Park

Margaret Island

Chain Bridge

Heroes’ Square

Széchenyi thermal bath

Citadella

Culture • Culture – Events - Festivals • A country of music: Liszt, Bartók, Kodály • Concert halls, Opera, Ballet • Festivals: Sziget, Volt, Balaton Sound, Hegyalja • Formula-1 Hungarian Grand Prix

Spas and baths • • • • • • •

Budapest Hajdúszoboszló Hévíz Sárvár Bük Gyula Harkány ...and many more...

Wine tours in Hungary

Wine festivals Hungary • Annual wine festivals celebrate viticulture and usually occur after the harvest of the grapes which, in the northern hemisphere, generally falls at the end of September and runs until well into October or later. • For example: Balatonfüred Wine Weeks, Wine Festival of Balaton's wines, Pannonhalma Wine Region Cellar Festival, Eger Star Wine Festival, Szekszárd Grape harvest Festival, Grape harvest Festival of Tokaj-Hegyalja etc. • St. Martin’s Day, or Martinmas (11 November): sampling of young wines and goose feasts. “He who eats not goose on Martin’s Day will starve, and who drinks not new wine will thirst.”

Thank you for your attention! For further information, please contact: Judit Szigeti Embassy of Hungary Kuusisaarenkuja 6, 00340 Helsinki Tel: +358 40 820 6530, +358 436 60 706 E-mail: [email protected]

Suggest Documents