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Hungary
Hungary is situated in Central Europe. Is sharing boorders with Slovakia, Austria. Slovenia, Croatia, Serbia, Romania and Ukraine.
Fact sheet:
Country Name |
Hungary |
Location |
Central Europe |
Territory |
93.030 km2 |
Population |
10,01
million |
Unemployment |
7,5 %
(2006) |
GDP
growth |
3,5 %
(2005) |
Average gross monthly
salary |
671
EUR (2005) |
Social
security paid by employer |
33,5% |
Capital City |
Budapest |
Full
member
of the EU |
since 1st of May 2004 |
Currency: |
Forint
(FT)
average yearly exchange rates for 2005
1 USD = 1 EUR = 248 |
International Telephone
Calling Code: |
+ 43 |
Electricity: |
230V, 50 Hz |
Time
zone |
Central European Time (GMT - 1, GMT -2) |
Climate |
Mild
continental; temperate, a mixture of oceanic and
continental, the average winter temperature is 5 degrees
C, the average summer temperature is 20 degrees C |
Economy:
Hungary is a founding member of the World Trade Organization
(WTO), and member of the European Union since the 1st of May 2004.
Foreign trade is vital for the country, as Hungary is an extremely
open economy - the degree of openness (i.e. the share of exports in
the GDP) is around 65%. This fact is not only due to the size of the
economy, but also to an open and active economic and trade policy.
Upswing in industry already gained pace in the last quarter of
2003, mainly driven by the recovery in external demand. The recent
forecast for the GDP growth in 2005 and also for 2006 is higher than
previously expected (4.2% for both years). Experts expect Hungary to
maintain its robust economic expansion in 2005 and exporters will
continue to benefit from the ongoing recovery of the euro zone, the
largest trading partner of Hungary.
The dynamic growth of exports in the past decade was mainly due
to the settlement of multinational companies in Hungary. Over 70
percent of the country’s exports are produced by partly or fully
foreign-owned companies. Substantial foreign investment had flown
into Hungary, and the mid-90s witnessed massive export drive. The
most important import products to Hungary include oil and gas,
automotive components, computer equipment, gas turbines, measuring
instruments. Hungary’s principal export products are electrical
machinery, machine tools, vehicles (non-railway) and organic
chemicals.
Investment:
Hungary was the first country in Central and
Eastern Europe to apply for membership of the EU. Hungary has been a
member of the OECD since 1996 and a full member of the NATO since
1999 and joined the EU on 1 May 2004. According to its convergence
program Hungary’s euro zone accession eventuates in 2010.
Hungary’s attractiveness as an investment
location and thus the volume of foreign direct investments into
Hungary has been significantly enhanced by the accession to the EU
which also resulted in the increasing volume of profit reinvestments
within FDI.
The most important incentive for foreign
investors is the highly favorable Hungarian tax regime. The current
rate of corporate tax is 16 percent, which is one of the lowest in
Europe.
The special incentive system is a tailor-made incentive offer of
the Hungarian government available for strategic investors. It was
introduced in 2003 with the aim to promote foreign investment inflow
into Hungary by providing a flexible and transparent framework for
subsidizing large investors.
Small- and medium-sized corporate tax payers are supported by
special tax allowances, if they employ no more than 250 employees.
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