The aim of this, already the seventh edition of Doing Business in Hungary 2017 is to give a complex overview of the regulatory and economic environment affecting the establishment and operation of business entities for decision-makers contemplating a business investment in Hungary and this way to help them steer through the various taxation, economic and legal requirements in Hungary. This publication is an excellent starting point for foreign investors as it addresses specific issues concerning their business preferences and the given industry. Our highly qualified experts are readily available to provide an accurate analysis of those issues as well as the best ways to approach them.
Certain changes aimed at improving the competitiveness of the Hungarian economy play a key role among the various growth-enhancing opportunities in 2017. Employment taxes payable by employers have been reduced significantly and the corporate income tax rate was lowered to 9 percent. At the same time, the continuous rise of the employment rate puts significant pressure on wages while the number of employable people is dropping. Small and medium-sized enterprises ("SMEs") may become one of the main beneficiaries of European Union grants in the context of the current programming period ending in 2020 that mainly focuses on economic operators. The Hungarian economy was upgraded to investment grade, which brought about some positive changes at the end of last year. In addition, the banking sector's willingness to provide financing and its lending activity also improved compared to former years.
As a result of the amendment of certain accounting rules, some multinational companies are now obliged while others have an option to prepare their stand-alone financial statements in accordance with the IFRS rules instead of the Hungarian accounting rules.
The housing policy measures taking effect at the beginning of 2016 (such as the reduction of the VAT rate applicable to home sales from 27 percent to 5 percent, tax refunds on housing projects and the family housing allowance ("CSOK") boosted the Hungarian property market and the momentum is expected to prevail also this year with beneficial effects on the construction industry and new projects. Several property development projects for investment purposes also contribute to the recovery of the Hungarian property market.
Hungary can be an attractive investment target for foreign direct investment as the country's position in the region is ideal, however, the scarcity of highly qualified workforce that speak foreign languages may pose certain challenges to employers owing to the rising employment rate.
The member firms of RSM Hungary group pursue highly-organized accounting, tax consulting, audit and legal activities in this developing and challenging economic environment with broad international background support as the exclusive Hungarian members of RSM International. RSM International is present in 120 countries of the world offering top-notch services and expertise in the field of financial advisory with more than 41 thousand employees in almost 800 offices. As a member of this excellent network, RSM Hungary offers its quality-oriented expert support for the achievement of business successes by both foreign investors in Hungary and Hungarian enterprises abroad.
We trust that the editorial team of RSM Hungary and Szűcs and Partners Attorney's Partnership will be able to provide some meaningful support for the preliminary assessment of your planned investment decisions in Hungary.