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Hungary

 

   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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