Hungary - Country Commercial Guide
Market Challenges

Learn about barriers to market entry and local requirements, i.e., things to be aware of when entering the market for this country.

Last published date: 2021-11-19

Hungary’s regulatory climate has made it a more difficult place to conduct business.   The country climbed from the 53rd  (2019) to the 52nd (2020) place among 190 economies in the World Bank’s latest Ease of Doing Business ranking (behind Poland, the Czech Republic, and Slovakia).

Since 2016, multinationals have identified shortages of qualified labor, both white and blue collar, as the largest obstacle to investment in Hungary.

During recent years, the government has introduced several new taxes which mostly hit the banking, energy, retail and telecommunications sectors.  In certain industries, such as media and retail, these unpredictable, sector-specific taxes and regulatory policies have favored national and government-linked companies.

  • Hungary’s value-added tax (VAT), for most products and services, is 27%, the highest in the EU.
  • Persistent corruption and cronyism continue to influence the public sector.  The Corruption Perceptions Index (CPI) by Transparency International remained unchanged at 44 Points in 2020 from 44 Points in 2019. Hungary has lost 11 points since 2012 and is now regularly listed among the most corrupt EU member states. In 2016, the government of Hungary withdrew from the Open Government Partnership (OGP), a transparency-focused international organization, after refusing to address the organization’s concerns about transparency and good governance. The government of Hungary also has rejected joining the European Public Prosecutors Office.
  • EU funding is a large driver of Hungarian GDP growth.  Based on the recent outcome of the 2021-2027 MFF negotiations, Hungary will be able to apply for more than EUR 52.8 Billion (USD 61.1 Billion) from the central budget during this period, which would mean a 35% increase compared to the previous term’s sum.
  • In 2020 the Government of Hungary passed legislation which requires investors outside the European Economic Areas to request approval from the Minster for Innovation and Technology for new investment exceeding a certain threshold and participation.