Hungary Usa road show busines breakfast at the World Trade Center atlanta

1. The business side of
the Rubik’s Cube
Hungary – A proven
location for investments
Mrs. Katalin Németh
Ms. Judit Czakó
HITA

2. Getting to know us

3. LOCATION
EU - a common market of 507 million people
Ukraine, Russia and the Balkans - market of 210 million consumers
Land: 93,030 km²
Population: ~10 million
GDP/capita,
at PPP (2012):
EUR 16,800/
USD 22,924
Source: Eurostat, OECD 2012

4. FACTS ABOUT HUNGARY
Swimsuits are necessities
Hungarians are smart; just ask
the people at Nobel
Hungarians are sports mad
Tokaji is the Wine of Kings and the King of Wines

5. WHAT MAKES US DIFFERENT?
L L L

6. EXPATS LIKE HUNGARY
• International schools in Budapest
British, American, German, Austrian, French, Chinese, Japanese etc.
• High standard private medical services
• Entertainment facilities
Thermal baths, wellness, recreation centres throughout the country
Rich cultural life
Excellent food and wine
• According to Condé Nast Traveler readers Budapest is the second best
city on earth

7. To provide information and to organize programs in the interest
of encouraging foreign companies to invest in Hungary.
Seek out and maintain contact with potential foreign investors,
assist in their decision-making process, and encourage their
intentions to re-invest.
• Seek out potential foreign investment projects
• Support the investment projects through a wide range of services
• After care
HUNGARIAN INVESTMENT AND TRADE AGENCY
HITA

8. Offices
Domestic network
Central office: Budapest
15 regional offices covering the
whole country
Foreign network
61 foreign offices in 47 countries all
over the world
74 trade and investment counsellors
Győr
Salgótarján
Tatabánya BUDAPEST
Miskolc
Pécs
Szeged
Szolnok
Debrecen
Nyíregyháza
Szombathely
Veszprém
Eger
Békéscsaba
SzekszárdKaposvár
HITA NETWORK

9. estimated
investment value
of EUR 3 billion
20,000 new
jobs to be
created
AT PRESENT:
HITA manages more than 100
investment portfolios
RESULTS IN 2013:
 35 successful investment projects
 EUR 1,2 billion investment
 7,000 new jobs

10. OUR FOCUS SECTORS
Manufacturing
Industries and Energy
• Automotive industry
• Electronics
• Renewable energy
• Chemical industry
• Food industry
Knowledge-based
Industries and Services
• SSC
• Life science
• Logistics, R & D
• ICT

11. Highlights from the business
and economic life

12. WHOM ARE WE PROUD OF –
Major American investors in Hungary

13. AND THE REASONS BEHIND…
• Investment friendly political measures (financial support, tax allowances)
• Competitive taxation system
• Good balance of costs and quality
• High level of educational system
• Close cooperation between educational institutions and companies
• Excellent road network and office infrastructure
• Quality of life
• 21 International schools

14. COMPETITIVE TAX SYSTEM
• Low corporate income tax:
• rate for the first HUF 500 million (EUR 1.69 million, USD 2.22 million) of
the tax base is 10%;
• beyond HUF 500 million, it is 19%.
• Tax incentives and allowances (development tax allowance, R+D tax
incentives)
• Flat personal income tax: 16%
Source: Deloitte, January 2014
CEE countries Corporate income tax
Slovakia 22%
Czech Republic 19%
Poland 19%
Slovenia 17%
Romania 16%
Hungary 10% or 19%

15. NUMBER OF DAYS TO START A
BUSINESS
0
5
10
15
20
25
30
35
5 6
10
16
18
20
32
Hungary
Slovenia
Romania
Slovakia
Bulgaria
Czech Republic
Poland
Source: The Global Competitiveness Report 2013-2014

16. Percentage of GDP
Source: Eurostat, Hungarian National Bank, OECD
HIGHEST INWARD FDI STOCK IN THE REGION
0
10
20
30
40
50
60
70
80
90
Hungary Czech
Republic
Slovak
Republic
Poland Romania Slovenia
80.30
67.70
57.40
45.80
42.40
34.10

17. MAIN INVESTMENT DECISIONS IN 2013
• OPEL, engine manufacturing
• Hewlett-Packard, IT
• Samsung: electronics manufacturing
• Procter & Gamble, personal care products manufacturing
• General Electric, establishment of an oil & gas branch
• Greif, shared service center
• Bridgestone, tyre manufacturing
• Systemax, shared service center
• Bosch, R&D facility
• Flextronics: electronics manufacturing
• DHL: Express logistics
• Takata: airbag manufacturing

18. AND THE AWARD GOES TO…
Source: www.fDiIntelligence.com, European Cities and Regions of the Future 2014/15
Budapest has been ranked the most attractive city in
Eastern Europe in 2014-15.
Rank City Country
1 Budapest Hungary
2 Wroclaw Poland
3 Katowice Poland
4 Plzen Czech Republic
5 Moscow Russia
6 Brno Czech Republic
7 Poznan Poland
8 Ostrava Czech Republic
9 Bratislava Slovakia
10 Prague Czech Republic

19. Forms of incentives
 Cash grants
 EU co-financed tenders
or
 Cash subsidy based on the decision of the Hungarian
Government
 Development tax allowance
 Job creation subsidy
 Training subsidy
 Job Protection Action Plan

20. Vas
Veszprém Fejér
Somogy Tolna
Baranya
Pest
Budapest
Nógrád
Heves
Borsod-
Abaúj-
Zemplén Szabolcs-
Szatmár-
Bereg
Hajdú-
Bihar
Békés
Jász-
Nagykun-
Szolnok
Csongrád
Komárom-
Esztergom
Győr-
Moson-
Sopron
Zala
Bács-
Kiskun
Investment band
As percentage of the
intensity ratio
Up to EUR 50 million 100 %
For the part between EUR
50 – 100 million 50 %
For the part over EUR 100
million 34 %
10% 0%*
40% 35%
30% 25%
50%
*with some exception
Regional Aid intensity after July 1, 2014

21. Manufacturing successes
The automotive industry in Hungary

22. THE ROUTES TO SUCCESS -
EXPANDING MOTORWAY NETWORK
Vienna, 1 hr
Rotterdam, 12 hrs
Prague, 5 hrs
Munich, 6 hrs
Hamburg, 8hrs
Warsaw, 10 hrs
Kyiv 12 hrs
Zagreb, 1 hr
Trieste, 6 hrs
Koper, 6 hrs
Bucharest, 10 hrs
Constanza, 12 hrs

23. • Production value: 9,37% of total industrial
production (2012)
• Automotive industry gives 18,2% of
Hungary’s total exports (17 bn EUR in 2013)
• Main export market: EU (75 %)
• No. of companies: cca. 712
• No. of employees: cca. 115.717
• Average gross salary: 824 EUR/month (Eurostat, 2013 June)
• Forecast: more than 2,3 million engines and 400.000 passenger
cars will be manufactured in Hungary in 2014
FACTS AND FIGURES

24. Foundation: 1993
Products: TT Coupé/Roadster, A3
Cabriolet/Limousine
Car. prod. cap.: 125.000
Engine prod. cap.: 1.900.000
Nr. of employees: 10.500
Revenue (2013): EUR 5,588 billion
AUDI Hungaria Motors Kft.
Location: Győr
Foundation: 1991
Products: engines, cylinder heads,
gearboxes
Engine prod. cap.: 1.000.000 (2015)
Nr. of employees (expected): 1000
(1,500 - 2015)
Revenue (2012): EUR 86,7 million
General Motors Powertrain (GM)
Location: Szentgotthárd
Foundation: 1991
Products: Swift, Splash, SX4 ,S-Cross
Car. prod. cap.: 300.000
Nr. of employees: 3.100
Revenue (20123: EUR 1,5 billiion
Magyar Suzuki (Suzuki Motors)
Location: Esztergom
Foundation: 2008
Products: A and B Class, CLA
Car. prod. cap.: 150.000
Nr. of employees: 3.500
Revenue (2013): EUR 2,1 billion
(Operation started in March 2012)
Mercedes-Benz Manuf. (Daimler)
Location: Kecskemét
Szentgotthárd
Győr
Esztergom
Kecskemét
Tatabánya BUDAPEST
Miskolc
Székesfehérvár
Pécs
Szeged
Szolnok
Debrecen
Nyíregyháza
Hatvan
Szombathely
OVERWIEV: MAJOR OEMS IN HUNGARY

25. More than 210 industrial parks are available for
manufacturing activity
WAITING FOR NEWCOMERS
• Green- and brownfield investments
• Good access to highways
• Excellent infrastructure services
• New technology and logistical parks
• Warehousing
• Customs arrangements
• Forwarding
• Administration (authority permits)
• Financial services
• Legal consulting
• Extra services

26. Unhit by the crisis
Knowledge-based industries
in Hungary

27. SSC SECTOR - A SUCCESS STORY TO BE
CONTINUED
1991
1996
1998
1999
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
• Constant growth since 1991
• 80 existing successful centres
• More than 30,000 employees
• Expanding scope and activities
• Growing number of „Centres of
Excellence”
2011
2012
2013
2014

28. • About 7.4% of the Total Value Added comes from ICT
companies
• ICT sector has shown a constant growth even during
the economic downturn
• Around 150 000 employees work directly in the sector
• Hungary ranks third place in the EU according to the
rate of ICT employees within the population
• There are more than 10 Science Parks in Hungary
ICT - A BOOMING SECTOR
Source: ICT Association of Hungary, 2013

29. SUCCESS STORIES –
INNOVATIVE HUNGARIANS
• Leonar3do – 3D virtual reality solution sold as an integrated hardware and
software platform. The company’s flagship product won six first price awards at
Intel’s ISEF in 2005.
• LogMeIn - The application allows the more than 125 million users worldwide to
control their computer remotely via a client program, a browser and a mobile
device. The company’s headquarter is in Boston, the regional centres are in
Sydney and Amsterdam while the development centre is located in Budapest.
• Prezi – Prezi is an online presentation tool with a special set of graphic and
functional tools. In 2010 the company was awarded with the European Seal of
e-Excellence Platinum Award. Prezi has offices in Budapest and San Francisco.
Source: IDC Hungary, 2012

30. TAKE-AWAYS
• Such a remarkable number of US companies can’t be
wrong
• The largest car engine manufacturing plant in the
world is in Hungary.
• The Rubik’s Cube was not the last invention by
Hungarians

31. Thank you for your
attention!
Mrs Katalin Németh
Investment
promotion director
katalin.nemeth@hita.
hu
+36 1 872 66 23
Ms Judit Czakó
head of department
judit.czako@hita.hu
+36 1 872 66 23
H-1055 BUDAPEST, HONVÉD UTCA 20. PHONE: (+36) 1 872 6699 FAX: (+36) 1 872 6699