LIFE SCIENCES IN

HUNGARY

OPENING DOORS FOR YOUR INVESTMENT

Life Sciences in Hungary

LIFE SCIENCES

CONTENT

Published by the Hungarian Investment Promotion Agency, HIPA All rights reserved © HIPA, 2016 www.hipa.hu

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ABOUT HUNGARY

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LIFE SCIENCES IN HUNGARY

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LABOUR FORCE

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INNOVATION

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HUNGARIAN INVESTMENT PROMOTION AGENCY (HIPA)

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Life Sciences in Hungary

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ABOUT HUNGARY MAIN FIGURES FORM OF GOVERMENT PARLIAMENTARY REPUBLIC AREA

93,030 km

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CURRENCY FORINT

(HUF)

GDP (PPP) € 183,989 MILLION (2014)

INFLATION -0.1% (2015, HCSO*)

TIME ZONE GMT + 1 HOUR UNEMPLOYMENT RATE 6.8 % (2015, HCSO)

HUNGARY

9,855,571 (as of January 2015)

OTHER MAJOR CITIES

CAPITAL BUDAPEST 1,757,618

POPULATION

Debrecen (203,506) Szeged (162,593) Miskolc (159,554) Pécs (145,985) Győr (129,372)

(as of January 2015)

78% 65%

CLIMATE TEMPERATE

57% 41%

(similar to the rest of the continental zone)

40%

RISK OF NATURAL DISASTERS VERY LOW

27% Inward FDI stock in 2014 (percentage of GDP) HUNGARY

CZECH SLOVAKIA POLAND ROMANIA SLOVENIA REPUBLIC

Source: wiiw FDI Database, 2016

MEMBERSHIP IN INTERNATIONAL ORGANISATIONS EU, UN, OECD, WTO, NATO, IMF, EC EU member: since 2004

(Source: *HCSO = Hungarian Central Statistical Office)

Life Sciences in Hungary

ABOUT HUNGARY

...has reduced the CORPORATE TAX RATE to the lowest level in the CEE region.

INVESTMENTS IN FOCUS

BUSINESS ENVIRONMENT

IN ORDER TO IMPROVE THE BUSINESS CLIMATE, THE HUNGARIAN GOVERNMENT…

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…introduced a new act on a practice based DUAL TRAINING in favour of business needs.

...has reduced the PERSONAL INCOME TAX to 15%

…created one of the most competitive FLEXIBLE LABOUR CODEs in Europe (in favour of employers).

...has entered into STRATEGIC PARTNERSHIP AGREEMENTS with numerous companies, giving fast access to the government via workshops and regular consultations. …has doubled the amount of financial support for R&D ACTIVITIES in the 2016-2020 period.

…has introduced a FOREIGN-TRADE FOCUSED foreign policy to attract FDI.

Life Sciences in Hungary

EXPATS LIKE HUNGARY

ABOUT HUNGARY

Budapest is a city full of surprises and wonder, with its lively centre, pretty parks, majestic river, tall church spires, and lavish spas. One of the most exciting cities in the world, Budapest is full of secrets, hidden spots to explore and old favourites to revisit. This is the city where being bored is not an option. According to Trip Advisor, Budapest is offering the best price-value ratio in the world. According to Condé Nast Traveler readers, Budapest is the second best city on Earth.

QUALITY OF LIFE

EXPLORE THE COUNTRYSIDE Hungary’s diverse countryside offers a wide range of outdoor activities: 11,000 kilometres of hiking routes; more than 2,500 kilometres of bicycle paths; 17 golf courses; ten national parks; and an abundance of protected nature reserves for the lovers of fresh air. The protected Puszta-region, the Great Plains, the romantic Danube Bend with its historic sites, and pretty baroque towns such as Eger attract visitors all over the year. Lake Balaton, the largest fresh water lake in Central Europe, is a perfect holiday resort.

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BUDAPEST IS THE BEST CITY ON EARTH (Condé Nast Traveler, 2015)

THERMAL WATER Hungary is blessed with an abundance of thermal water, and its bathing culture is supported by excellent facilities. The world’s largest thermal lake suitable for bathing is in the Western Hungarian town of Hévíz; the water temperature never drops below a tepid 79°F/26°C, so a dip is possible at any time of year!

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INTERNATIONAL SCHOOLS Expatriates looking to stick with the curricula of their home countries can choose from a range of private international schools for their children. There are also many English, German and French public and private pre-schools for children aged three to six. The school year starts in September and ends in June, and school buses are usually available at private schools. There are many opportunities to study in foreign languages at universities as well.

Life Sciences in Hungary

LIFE SCIENCES IN HUNGARY STRONG POSITION

NR. 1 IN LIFE SCIENCES

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TOP 5 CITIES IN LIFE SCIENCES: 1. Budapest, Hungary 2. Skopje, Macedonia 3. Istanbul, Turkey 4. Moscow, Russia 5/a Athens, Greece 5/b Warsaw, Poland

The Conway group – a company providing comprehensive corporate investment consulting – has released a publication titled “The World’s Most Competitive Cities 2015”. It evaluated the most competitive big cities in terms of investment having a population above 500,000 people.

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5b

1

Budapest

is displayed as one of the most dynamic hotspots of Central Europe, supported by the diversity of the city.

1

Budapest

2 Budapest was the most attractive city of the Eastern European and Central Asian region in the field of the automotive industry, mechanical engineering, life sciences, metallurgy, power engineering, transportation and logistics. In addition, it shared first place in the field of information technology and communications and achieved second place in the field of business and financial services.

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Life Sciences in Hungary

LIFE SCIENCES IN HUNGARY BUILDING ON RICH TRADITIONS

A STRONG PHARMACEUTICAL INDUSTRY WITH A CENTURY-OLD TRADITION

Throughout the 20th century, Hungary was the most important supplier of medicine for Eastern Europe and remained at the forefront of the region’s pharmaceutical industry. In the 1990s, international pharmas recognized its expert knowledge and potential and established export-oriented, high added value production in the country. Building on its rich traditions, today the Hungarian pharmaceutical industry contributes to the health of people

in almost 80 countries around the world.

Hungary’s modern pharmaceutical industry was established in 1901 by Gedeon Richter who began industrialscale manufacturing in his Budapest pharmacy laboratory. During the 1910s and 1920s, the foundations were laid down for one of Hungary’s most successful and globally-renowned industrial sectors.

Ground-breaking contributions to life sciences were made, such as the first synthesis and mass production of Vitamin C, led by Nobel laureate Hungarian scientist, Albert Szent-Györgyi.

"More than a century of experience in pharmaceutical manufacturing, globally acknowledged expertise and continuous innovation, these are the values that characterize the Hungarian pharmaceutical industry. For Gedeon Richter, an independent pharmaceutical multinational based in Hungary, the solid operating of its research and development activity is a priority. The favorable economic environment make it possible for us to maintain a high engagement of Hungarian brainpower, a key to our successful international presence." Erik Bogsch, Managing Director, Gedeon Richter Plc.

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Life Sciences in Hungary

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LIFE SCIENCES IN HUNGARY REFERENCES TEVA

GLAXOSMITHKLINE In 2002, UK-based multinational GSK acquired a vaccine production facility near Budapest making a strategic investment of over EUR 130 million. The plant produces antigens for paediatric combination vaccines. The facility employs 220 people.

HEALTHY

BIOTECH SECTOR

H

ungary’s pharmaceutical traditions and internationally acknowledged achievements in chemistry and biology serve as the basis of its healthy biotechnology sector. Today, the country has

over 85 core biotechnology companies

of various sizes focused on biotech R&D and manufacturing. The majority were established in 2005-2007, and market their products and services worldwide. Hungary has a proven track record in R&D and is a net contributor to the global biotech industry.

GEDEON RICHTER

THOSE

WHO HAVE CHOSEN HUNGARY EGIS (SERVIER) Established in 1912, Egis is one of the most prominent companies in the history of Hungarian pharmaceutical manufacturing. Now owned by France’s Servier, Egis is active in the pharmaceutical value chain from manufacturing through R&D to marketing. The company continues to build on the skills, talents and creativity of Hungarian scientists while focusing its R&D on cardiovascular diseases and disorders of the central nervous system. Servier employs a staff of 3,000 in Hungary.

The nation’s first large-scale pharmaceutical producer, Richter was established in 1901 and remains the national flagship manufacturer. The largest independent drug maker in CEE, the company operates a highly regarded R&D centre, employing 950 people. Richter runs joint research programs with more than 30 leading university faculties and academic research institutes. The company is also active in original research, which is mainly focused on diseases of the central nervous system.

Global generics leader Teva Pharmaceuticals acquired the Hungarian pharmaceutical company Biogal in 1995. Today the plant in Debrecen (Eastern Hungary) is the company’s main centre of manufacturing for the region and markets outside Europe. The company supplies products to 44 countries. Teva Group’s European generics R&D centre was inaugurated in 2009 in Debrecen. In Hungary, Teva operates three production sites and a packaging plant, employing 3,000 people.

SANOFI In 1991, France’s Sanofi acquired ownership of the traditional Hungarian pharmaceutical manufacturer, Chinoin. The French parent has three manufacturing sites in Hungary and also a regional distribution centre, from which products are shipped to 45 countries. Sanofi’s Hungarian activity also includes drug development. The company’s headcount in Hungary is around 2,100.

"With regards to innovation in the pharma sector Hungary is an attractive place and is among the top 10 countries in Europe in terms of the number of conducted clinical trials, bringing 300 million Euros of investment to the country every year." Pierre Faury, General Manager, Sanofi Hungary

Life Sciences in Hungary

LIFE SCIENCES IN HUNGARY

"Highly educated professionals, an advantageous geographic setting and a supportive environment for investment have been the key drivers to make this development in Hungary." Claire Roger, General Manager, GlaxoSmithKline Ltd.

SUCCESS STORIES

RECENT

SUCCESS STORIES AND DEVELOPMENTS

October, 2012 – Global generics leader Teva Pharmaceuticals opened a new EUR 65 million sterile plant near Budapest, creating 260 new jobs. The facility is one of the biggest of its type in Europe and will operate with an annual production capacity of 160-200 million units. The new plant will supply patients in more than 70 countries.

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July, 2013 – Hungarian drug maker Egis, owned by France’s Servier, announced an EUR 16 million investment to strengthen its research and development capacity. The expansion will create new R&D jobs at the company’s Budapest site.

November, 2014 – French animal healthcare company Ceva announced it would increase its Hungarian production capacity by 40%. The company declared that further expansion of its poultry vaccine manufacturing facility in Budapest was expected in the years to come.

January, 2016 – GlaxoSmithKline has a cutting edge vaccine manufacturing site in Gödöllő. The site was acquired by GSK which then invested heavily to upgrade the facilities and technologies to bring new facilities online in 2008. This site has a key role producing purified Diphtheria and Tetanus antigens which are used in vaccines containing DT all over the world. An ongoing technology transfer project on the site has now entered the implementation phase: as a result of this project, additional phases of the manufacturing process of tetanus and diphtheria vaccines will be located in the Hungarian facility. GMP operations are expected to commence in the first half of 2016.

November, 2015 – US-based BD Biosciences, a world leading provider of diagnostic and research tools for life scientists celebrated the foundation of its new facility in Tatabánya, Northwest Hungary. Building on positive experiences in the production of prefillable syringes, Becton Dickinson (BD) decided to also locate the manufacturing of research reagents to its Hungarian site. The new facility is expected to produce 8,000 different types of reagents for the pharmaceutical industry by 2018. The investment project of EUR 20 million will create 107 additional jobs.

Life Sciences in Hungary

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LIFE SCIENCES IN HUNGARY VETERINARY SCIENCES

"In celebrating 100 years since the creation of the Phylaxia Serum Producing Company, we are very proud of our historical link with this company and its scientific tradition. Over the years, we have shown our commitment to build on our roots and bring to life major innovations, by investing heavily and regularly in CevaPhylaxia. …From 1991 to today, the company has increased its production over a thousandfold, and launched numerous vaccines including the best sellers CevacTransmune IBD, Cevac IBD L, Coglavax, Coglapest, Coglapix and Coxevac just to name a few." Thierry Le Flohic, General Manager, Ceva-Phylaxia

BUILDING ON HISTORYVETERINARY SCIENCES 1900s Veterinary sciences also have deep roots in Hungary, with the beginnings of veterinary serum production dating back to the early 1900s.

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1920s

1948

In 1912, the Phylaxia Serum Producing Company was established to develop and produce the classical swine fever serum.

From the 1920s, new vaccines were produced, targeting anthrax, swine erysipelas and poultry cholera.

In 1948, all Hungarian biological production laboratories were reorganized into a single company.

1970s 1905 In the 1970s, the company became a national and international centre of innovation for veterinary sciences with more than 2,000 employees and 200 different products manufactured.

1999 In 1999, the company became a subsidiary of Ceva.

TODAY Scientists at Ceva-Phylaxia continue to build on the knowledge-base of their predecessors. The company’s largest biological R&D centre is in Budapest with a staff of 120. In July 2014, Ceva-Phylaxia celebrated the 50 billionth poultry vaccine manufactured in Hungary.

Life Sciences in Hungary

LABOUR FORCE PRODUCTIVITY

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GLOBALLYRELY

ACKNOWLEDGED HUMAN CAPITAL AT A REASONABLE COST



The Hungarian labour force is well qualified and cost effective, which increases the country’s international competitiveness. The large number of high quality research institutions are a testament to Hungary’s traditional strengths in science and technology. The 2016 statutory gross minimum wage in Hungary is HUF 111,000 (cca. EUR 3,452 per month). The average earnings was around HUF 247,784 (cca. EUR 800) in 2015.

AVERAGE GROSS WAGES IN 2014 (EUR)

1561

Health service manager

1340 Chemical engineer

1182 786

Pharmacist, specialized pharmacist

Chemical engineering technician

1399

473

Dental technician

Chemist

765

961

Biologist, botanist, zoologist and related professional

Other human health care related professional

918

Basic chemicals and chemical products machine operator

1112

General practitioner

1044

Pharmaceutical products machine operator

(Source: National Employment Service, 2014)

Life Sciences in Hungary

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LABOUR FORCE EDUCATION

250

BIOTECH-RELATED RESEARCH AND EDUCATIONAL INSTITUTES

MORE THAN

19,000

MAIN CENTERS: BUDAPEST, PÉCS, SZEGED, DEBRECEN

LIFE SCIENCES STUDENTS IN TERTIARY EDUCATION IN 2013/2014

"Hungary has the most developed pharmaceutical industry in the CEE region; 50% of all industrial R&D investments realised in the country derives from this highly innovation driven sector. Government incentives contribute to our operations, as well as the central geographic location of Hungary. The globally acknowledged local expertise, state of the art technologies and favourable infrastructure provide a solid background for our research and for the production of medication of the highest quality." Dr. István Hodász, CEO, Egis

Debrecen Budapest

Pécs

Szeged

Life Sciences in Hungary

INNOVATION R&D POTENTIAL

R&D

IN HUNGARIAN LIFE SCIENCES The scientific creativity of Hungarians is internationally recognized, which is apparent from the large number of Nobel laureates of Hungarian origin. This talent is particularly noticeable in the fields of natural, technical and medical sciences. Although biotechnology is a relatively young science, its related industries and research fields have longstanding traditions in Hungary, giving companies access to a deep knowledge-base.

2004

ADAM HERSHKO CHEMISTRY The discovery of ubiquitinmediated protein degradation

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HUNGARIAN

NOBEL LAUREATES

1994

1986

JOHN CHARLES POLANYI CHEMISTRY Contributions to carbocation chemistry

1963

EUGENE WIGNER PHYSICS Contributions to the theory of the atomic nucleus and the elementary particles

1943

GEORGE DE HEVESY CHEMISTRY The use of radioactive tracers in the study of biochemical processes

1925

RICHARD ADOLF ZSIGMONDY CHEMISTRY Demonstration of the heterogeneous nature of colloidal solutions

1905

FÜLÖP VON LÉNÁRD PHYSICS Cathode ray

GEORGE ANDREW OLAH CHEMISTRY Contributions to carbocation chemistry

1971

DENNIS GABOR PHYSICS The invention and development of holography

1961

GEORG VON BÉKÉSY MEDICINE The physical mechanism of stimulation within the cochlea

1925

ALBERT SZENT-GYÖRGYI MEDICINE Study on Vitamin C and cell respiration

1914

ROBERT BÁRÁNY MEDICINE Physiology and pathology of the vestibular apparatus

Life Sciences in Hungary

INNOVATION UNIVERSITY CAPABILITIES

LIFE SCIENCES R&D IS CONCENTRATED AROUND FOUR MAJOR CITIES IN HUNGARY BUDAPEST

Semmelweis University: Widely recognized as one of Europe’s leading centres of medical and health sciences. János Szentágothay Centre of Excellence: Carries out immuno-genomic research, modified tissue proliferation, common molecular targets in endemics, info-bionomics in medicine and neuroscientific research. Cell Communication Knowledge Centre: Involved in the development of new technologies based on research of diseases caused by impaired cell communication. Institute of Experimental Medicine of the Hungarian Academy of Sciences: Focuses on basic biomedical research, primarily in the field of neuroscience.

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DEBRECEN

University of Debrecen: The newly established Life Science Centre for molecular medicine, biology and agricultural sciences. Genomnanotech Regional Knowledge Centre: Targets cutting-edge technologies developed at the Debrecen University and its region, including genomics, nano- and biotechnologies. Pharmapolis Innovative Pharmaceutical Cluster: A recently established regional biotechnology cluster. Research Centre of Molecular Medicine: Recognized as a “Centre of Excellence” by the European Union in 2004.

THE PHARMACEUTICAL INDUSTRY PROVIDED FOR

46,9% OF THE MANUFACTURING INDUSTRY’S R&D EXPENDITURES IN 2014. (source: HCSO)

PÉCS

University of Pécs: One of Hungary’s largest higher education institutions. Science Building Research Institute: Completed in 2012, a key objective of the project was to improve the basic research potential in the most progressive areas of life sciences.

SZEGED

University of Szeged: Hungary’s second largest education and research centre. Szeged Neurobiological Knowledge Centre: Therapy-oriented neurobiological research from molecules to the integrated functioning of the nervous system. Biotechnology and Pharmacology Innovation Cluster: A recently established, Szeged-based collaboration of SMEs involved in life sciences.

Life Sciences in Hungary

INNOVATION CLINICAL RESEARCH

ATTRACTIVE

LOCATION FOR CLINICAL RESEARCH HUNGARY HAS A WORLDWIDE REPUTATION FOR INTERNATIONAL CLINICAL TRIALS, WITH MORE THAN

330

SUCH TRIALS REGISTERED EVERY YEAR. THIS IS AN OUTSTANDING NUMBER CONSIDERING HUNGARY’S POPULATION OF 10 MILLION.

Higher incidence of certain disorders than in Western Europe

Fast and reliable patient recruitment

Local study monitors and CROs are more highly skilled than the international average

EUcompliant legislation

BENEFITS OF CLINICAL TRIALS IN HUNGARY

High density of well-equipped Phase I study centres

Similarly to the health care system, the national health insurance scheme is also centralized in Hungary. Being the sole health insurance provider in the country, the databases of the National Health Insurance Fund offer a unique means of access to patient data. Such concentration of information makes Hungary an even more favourable choice for companies engaged in clinical research.

Highly motivated and loyal investigators

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Centralized health care systems concentrate large numbers of patients

Wide availability of untreated patient populations

Patients trust physicians and Western medicine

Excellent English language skills

Modern hospital and diagnostics equipment to support complex trials

Outstanding data quality

"With a population of 10 million people, the highest standard of medical care and great investigator and patient engagement, Hungary exemplifies an excellent setting for global clinical research." Vlad Bogin, MD, FACP, CEO of Cromos(tm) Pharma

Life Sciences in Hungary

HIPA OUR SERVICES

HOW DO WE SUPPORT YOUR LIFE SCIENCES PROJECT?

AFTER YOU HAVE CHOSEN HUNGARY

BEFORE YOU MAKE A DECISION WE OFFER YOU...

…one-stop-shop management consultancy services to address your business needs.

...tailor-made incentive offers and information packages on the business environment, labour market, tax regulations, etc.

...location search & evaluation

+

site visits.

We are open to your feedback and offer madiation between government and business based on your inputs.

We support your further expansion and plans.

PLEASE CONTACT US ...meetings with HR & Real Estate agencies, Law firms and other consultants based on your needs.

...reference visits at companies that are already established in Hungary.

...assistance with your incentive application.

Address: 1055 Budapest, Honvéd utca 20. Customer service: [email protected] Telephone: +36 1 872 6520 Web: www.hipa.hu

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Life Sciences in Hungary

HIPA

Regional grants are the most typical forms of incentives for greenfield / brownfield investments or reinvestments. The maximum amount of regional incentive is shown in the regional aid intensity map. The map below illustrates that, depending on the region, regional aid available for investment by a large enterprise may be up to 50% of the eligible costs of the investment. For investments not exceeding €50 million, the maximum intensity ratio can be increased by 10% for medium-sized and by 20% for small enterprises.

INCENTIVES OVERVIEW GOVERNMENT INCENTIVES

A

s a member of the European Union, Hungary’s regulations on incentive opportunities are in compliance with EU regulations. One of Hungary’s competitive advantages over other countries in the region is the government’s strong commitment to increasing the competitiveness of SMEs and large enterprises in Hungary. Alongside the regulatory tools that contribute to the competitive business environment of local companies, Hungary offers a wide range of incentives to facilitate foreign direct investments and reinvestments by local enterprises. Subsidies may be granted as regional aid or specific aid, such as R&D subsidies.

CENTRAL HUNGARY Budapest

25%

0 / 20 / 35%

35%

Miskolc

NORTHERN HUNGARY Debrecen

Győr NORTHERN GREAT PLAIN

CENTRAL TRANSDANUBIA Székesfehérvár

THESE INCENTIVES INCLUDE, BUT ARE NOT LIMITED TO

WESTERN TRANSDANUBIA

SOUTHERN TRANSDANUBIA

SOUTHERN GREAT PLAIN Szeged

Pécs

CASH SUBSIDIES for investments, training, job creation and R&D

TAX INCENTIVES reduction of corporate tax, social tax, or for encouraging R&D activities...

LOW-INTEREST LOANS

Special tax incentives and EU tenders for R&D investments

SPECIAL INCENTIVES of the free enterprise zones

The maximum aid intensity available decreases if the investment is a large investment (exceeding €50 million): 50% of the maximum aid intensity shown in the regional aid map is available for investments between €50 and €100 million, with 34% of the maximum aid intensity for investments over €100 million. For information on up-to-date and individual incentive packages, please contact HIPA directly.

50%

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