Overview
In 2024 the Hungarian safety, security, and defense sector continued to grow in strategic importance, both domestically and in its export potential. The sector includes everything from private security services (alarms, guards, surveillance) and cyber/infrastructure protection to heavy defense goods like combat vehicles, ammunition, and advanced electronics. Although the number of companies in the safety/security industry has been declining since the early 2010s, total revenues have trended upward.
High-tech defense and security products are almost always imported, especially for military and law-enforcement applications, while many physical security services are still handled by domestic firms. Hungary has also worked to implement new cybersecurity regulation aligned with EU directives (e.g. NIS2), underlining how digital and regulatory security are now central to the sector.
In 2024 Hungary significantly increased its defense spending to about 2.1% of its GDP. On the defense industry side, Hungary’s government has stepped up investments under programs such as Zrínyi 2026, focusing on modernization across multiple fronts. Key developments include several new arms and ammunition factories (e.g. the Rheinmetall facility in Várpalota), production of Lynx IFVs at the Zalaegerszeg plant, and an expanded footprint of foreign-partnered manufacture (e.g. Rheinmetall, Airbus components). The formation of N7 Holding Zrt. in 2021 was a first step in Hunagry’s effort to increase the competitiveness of its defense industry. Originally aligned under the Ministry of defense, in 2024 N7 was integrated under the Ministry for National Economy.
This action indicated Hungary’s increasing efforts to leverage its defense industry for national economic gain in addition to providing for national security requirements Hungary has furthered this drive for increased economic returns from its small but growing defense portfolio by moving toward privatization in strategic assets (e.g. majority stake sales), reflecting a shift toward mixed public-private ownership. The most visible of these actions again involved N7 Holding, which recently transferred its equity stakes in nine defense subsidiaries into the newly formed N7 Defense Zrt. owned by the 4iG Group in 75 percent. The remaining 25% of shares will be remained by the Hungarian state.
The domestic market is dominated by imported equipment, especially in high-tech security and technology solutions used by Hungarian military and law enforcement organizations. Typically, physical security services are provided by local companies due to local standards and licensing requirements. The market for fire safety and security alarm systems, access control, perimeter and site security systems is one of the best-organized segments within the industry. Most of these surveillance products are imported from French, German, Italian, American, Israeli, Japanese, Chinese and Taiwanese companies.
Hungary hosts a range of companies engaged in the local production of safety and security systems, spanning various sectors from electronic surveillance through security services, integration to fire protection. There are several local developers of biometric identification systems, biometric access control, and time and attendance systems.
To protect European citizens, the EU regulates the use of data provided by Europeans for all companies working in the European Union and/or processing the personal data of EU citizens. Please see the data privacy section of this report for more information.
Hungary’s armed forces have undergone radical change in the past few years and its fleet of 16 Airbus H-225M helicopters is now complete, with the last two aircraft delivered in July 2025, marking the end of a significant phase in the country’s military modernization program. This new fleet, comprising ten medium tactical transport and six special operations helicopters equipped with the HForce weapons system, enhances the Hungarian Defense Forces’ mobility and capability for international missions. The Hungarian fleet of H-145s is also complete, providing increased mobility and light lift capability to the HDF. The completed helicopter fleet is a crucial part of Hungary’s broader National Defense and Armed Forces Development Program, which aims to achieve full NATO compatibility by the 2030s. Hungary has also added two multi-role KC-390 mobility aircraft to its Air Force, providing the HDF with increased deployment, airdrop, aeromedical evacuation, and air-to-air refueling capabilities. Finally, Hungary has taken initial delivery of its first three L-39NG Skyfox aircraft which will serve as pilot training aircraft and as reconnaissance aircraft. The Hungarian Customs Office has been purchasing cargo scanners, mobile backscatter vans, and high energy mobile system to be used at various border crossing points.
The Hungarian Ministry of Defense has exhibited a trend toward using European-made military technologies in its Zrinyi modernization plan. The first Leopard 2A7HU tank was delivered to Hungary in August 2023, with subsequent tanks arriving in batches through late 2023 and in 2024. The delivery of all 44 tanks ordered is expected to be completed by 2025-2028. Joint venture collaborations aim to modernize Hungary’s defense industry and enhance its military capabilities. Hungary also produces Gidran tactical armored fighting vehicles in Hungary in cooperation with a Turkish firm.Hungarian Defense Forces (HDF) have also modernized their artillery systems, purchasing 24 German-made PzH 2000 self-propelled howitzers. The HDF has also entered into a co-production agreement with Rheinmetall to produce the Lynx Infantry Fighting Vehicle at their facility in Zalaegerszeg. These efforts are a focused decision to modernize the HDF and to further distance Hungary from its legacy Soviet-produced equipment.
Hungary is actively developing and manufacturing combat drones, both independently and through international collaborations. In July 2023, Hungary unveiled its first domestically developed unmanned aerial vehicle, the ProTar. This jet-propelled, fixed-wing drone is designed for military applications, including air defense exercise. Another Hungarian company has developed the Phantom drone, a large UAV which 14-meter wingspan. It offers a range of up to 10,000 km, and a payload capacity of 500 kgs. Hungary has entered into agreements with Israeli and German companies to jointly manufacture combat drones. Under EU rules, anyone in the EU who operates a drone must register as a UAS operator. Registration takes place in the country where the person or company resides or has its headquarters, or—if they are not an EU national—in the country where they first use the drone. In Hungary, the rules go a step further: not only must UAS operators register, but the drones themselves must also be registered. All drones have to be registered in Hungary if they have take-off weight of more than 120 grams, have data recorder and can fly up to more than 100 meters from the remote pilot.
Opportunities
Opportunities in 2025-2026 for this sector in Hungary are significant. Hungary’s NATO membership and its geopolitical location make it a security focal point, especially given regional tensions. Domestic procurement tied to its Zrinyi modernization effort could result in large, multi-year contracts. The interest of foreign defense firms in establishing production presence (e.g. investment by Rheinmetall’s multiple factories) provides knowledge transfer, job creation, R&D capacity, etc. The Hungarian military continues to seek critical capabilities of the modern battlefield including counter UAS systems, first-person drones, loitering munitions, more robust cyber capabilities, counter battery fires, digital command and control systems, data fusion systems, and electronic warfare systems. On the civilian side, growth in cybersecurity regulation, private security demand, and infrastructure protection provide strong commercial opportunities.
However, the sector also faces several challenges. Regulation, licensing, and high entry costs limit many domestic firms from entering high-end segments. Dependence on imports on advanced tech remains large, potentially constraining self-sufficiency. Workforce development (skills, clearances, engineering talent) is an ongoing constraint. Also, political risk and the interplay between state-ownership and privatization have generated debate, particularly over transparency and control of long-term strategic capabilities. Budget pressure and supply chain risks in defense materials (especially ammunition, electronic components) are also key issues.
Airport security, manufacturing sites, and warehouse protection are the most developing segments in the sector. Both the Budapest International Airport and Debrecen International Airport have initiated security-related development projects, including passenger and cargo screening that require implementation of additional airport security equipment (and upgrades for existing equipment) at border crossing points. X-ray cargo screening systems are also being implemented at land border crossing points and railroads. Budapest Airport expanded and modernized its passenger security screening lanes in Terminal 2B, bringing the total up to 18 lanes to better handle peak traffic. The airport has introduced state-of-the-art automated systems (including new X-ray machines and archway metal detectors) to speed up screening throughput by 25-30%, reducing waiting times especially during busy periods.
Larger electronic items no longer need to be removed from hand luggage for screening at certain checkpoints, using upgraded screening technologies. BUD has been preparing to introduce FaceBoarding, a system allowing passengers to use facial recognition for passing through security checks and boarding gates. Users will have to register (via an app or at the airport). This is aimed at simplifying the process and reducing the need for physical documents.
Air cargo traffic grew by approximately 48.8% in 2024 at Budapest Airport handling 299,642 tons of cargo compared to 200,000 tons of the previous year. The development of BUD Cargo City will allow further air cargo development up to 400,000 tons per year. Among further developments, warehouse space will also be expanded with offices and other supporting infrastructure and security surveillance systems which will contribute to increasing the regional significance of the airport.
Security technology for property protection at manufacturing and industrial facilities and warehouses as well as public areas also present opportunities for innovative solutions. In recent years, the security and building automation market – thanks to increased real estate developments – increased with special focus on anti-intrusion equipment, fire safety, integrated building automation equipment and CCTVs.
Within the anti-intrusion sector, access control remains an important and highly competitive area. The industry is migrating toward IP and integrated solutions. The trend is to move away from proprietary technology towards open systems that allow the integration of multiple applications. Other drivers include the growth of time and attendance applications, the demand for smart card and optical card systems, the need to reduce fraud, and increasingly an acceptance of biometric systems. Training for integrators and installers is essential to effectively meet end-user needs.
An increasing number of private properties have security and alarm systems installed. Opportunities exist for private security operators – such as security guard service companies – to provide technology and services to private citizens. Examples of public-private collaboration include municipalities and private security service companies that utilize public security cameras and CCTV systems installed by banks, hypermarkets, retail shops and in public places to survey areas and provide services to businesses or private citizens, all in cooperation with the municipal police.
Hungary’s Chemical, Biological, Radiological, and Nuclear (CBRN) protection sector presents significant business opportunities, driven by national defense priorities, regional cooperation, and EU and NATO initiatives. As the Hungarian government has been actively investing in defense capabilities, this growth is expected to bolster demand for advanced CBRN defense technologies, including detection systems, protective wearables, decontamination equipment, and training simulators. Key players in Hungary’s CBRN protection landscape include companies like Gamma Tech which manufactures radiation detection instruments and integrated CBRN reconnaissance systems and CBRN Hungary, specializing in research, representation, and marketing tasks for CBRN detection and defense. The Hungarian defense industry is open to international cooperation, offering avenues for partnerships and joint ventures in the CBRN protection sector. For businesses seeking to enter or expand in Hungary’s CBRN protection market, opportunities exist in supplying advanced equipment, providing specialized training, and engaging in collaborative projects with defense agencies and industry stakeholders.
Police are using an increasing number of drones every year to battle against traffic surveillance, traffic violations and street crimes. In 2024 alone, traffic police have used drones in more than 2,500 cases, in about half of these cases against those violating traffic regulations. As a result of developments in police equipment and the acquisition of modern technology, the number of crimes has shrunk from around 447,000 cases in 2010 to approximately 178,000 cases in 2024. In addition to traffic control, drones are being used to monitor areas that are difficult to access, they are also in use for revealing illegal migration at the southern borders, securing events, finding missing people and illegal waste dumps, and crime scene investigation.
There is no specific safety/security or defense-related trade show or annual event in Hungary. Hungarian companies tend to visit trade events in Europe such as DSEI in London, UK, MSPO in Kielce, Poland, Enforce Tac in Nuremberg, Germany or the SHOT Show in the U.S. to establish new business contacts and gain insights into industry innovations. There is a strong recommendation to U.S. companies to select a representative in the Hungarian market to succeed in public tenders and direct commercial sales. Given the small size of the Hungarian market, potential partner companies tend to ask for exclusive distributorship.
Equipment with the greatest sales potential includes:
- Access Control and Video Systems
- Border surveillance and detection systems
- Automated home protection solutions
- Screening and X-Ray systems for airports, customs, and public facilities
- Drones and anti-drone systems
- CCTVs, Security cameras for multiple functions such as retail shops, large facilities and public areas
- Wireless security solutions
- General security supplies (such as window foils, transportation security products, personal safety products)
Hungarian users have a high level of appreciation for innovative, sophisticated security products and solutions. Strong after-sales service, maintenance, adequate and timely supply of spare parts and training are all essential to success.
U.S. Embassy - U.S. Commercial Service
Csilla Viragos, Commercial Specialist
Budapest, Hungary
Tel: +36 1 475 4250
Email: csilla.viragos@trade.gov