Widely considered the gateway to Central and Southeastern Europe, Hungary offers an attractive market for foreign investment. The country’s main investors include the Netherlands, Luxembourg, Germany, and Austria. In recent years, investment from Asia — particularly from South Korea and China, with Japan to a lesser extent — has also become increasingly significant.

Initial foreign investments were primarily concentrated in the services and commercial distribution sectors. However, subsequent projects have focused on the construction of automotive manufacturing plants and investments in the pharmaceutical industry.

Hungary’s workforce is highly educated and skilled, with strong expertise in fields such as engineering, medicine, and economics. Additionally, labour costs remain relatively low, making Hungary an efficient and competitive production base within the European supply chain.

Investors should note that Hungary has introduced two separate foreign direct investment (FDI) screening processes, aimed at protecting strategic Hungarian industries and the agricultural sector, particularly in response to the impacts of COVID-19. The first screening focuses on sectors of strategic importance, including defence, cryptography, utilities, and the financial sector. The second has a much broader scope, covering most manufacturing activities, hospitality, energy, and construction.

Hungary also continues to feel the effects of the Global Financial Crisis, which significantly increased the country’s reliance on external and public financing. Low investment in innovation and R&D, a high level of energy dependence, vulnerabilities in the agricultural sector, and a fragile banking system — both public and private — pose ongoing risks to the economy. The country also faces high levels of public and private debt, with inflation further complicating the repayment of foreign currency loans, impacting both banks and citizens.

All these factors contribute to Hungary’s current position of 52nd out of 190 countries in the Doing Business ranking, which evaluates how easy it is to do business in each country.

AUXADI can become your ideal investment partner in Hungary. From our office, located in Hungary, we offer a One Stop Shop value added Outsourcing services in the areas of Accounting and Reporting, Tax Compliance, Payroll Management and Representation services, among others.