Doing Business with Hungary
|Language||the official language is Hungarian, English is widespread, the languages of numerous minorities|
|Religion||Roman Catholic (51.0%), Reformed (15.9%), Other (31.1%), No Religion (2.0%)|
|State system||parliamentary republic|
|Head of State||Novak Katalin|
|Head of government||Viktor Orbán|
|Currency name||forint (HUF)|
|Time shift||is not against CET|
|Nominal GDP (billion USD)||356.2|
|Economic growth (%)||7.1|
Hungary is a Central European country bordering Austria and Slovenia to the west, Slovakia to the north, Ukraine to the northeast, Romania to the southeast, Serbia and Croatia to the south. It is a landlocked country without access to the sea. From the point of view of the political and economic system, Hungary, like the Czech Republic, is a parliamentary democracy with a market economy. The head of state is the president, whose role is primarily representative, the main power lies in the hands of the government led by the prime minister. Hungary is a member of both the European Union and NATO as well as almost all major international organizations.
Hungary is an export economy, the backbone of which is largely the automotive industry. Audi, Mercedes and Suzuki cars are produced in the country, and a BMW production plant is also under construction. Most of the production is exported. A very wide supply chain is connected to the production plants, including, for example, the production of batteries. A relatively new phenomenon of the Hungarian economy is the development of the defense industry related to the comprehensive modernization of the Hungarian army as part of the Zrínyi 2026 program, when large plants for the production of weapons are gradually being established in the country. The main investment in the country is the construction project of two new units at the Paks nuclear power plant.
Before the pandemic, Hungary had one of the highest GDP growth rates in the EU. Thanks to the pandemic, GDP fell by 5.1% in 2020, increased by 7.1% in 2021, and the Hungarian government expects GDP to grow by only 4.3% in 2022 due to the war in Ukraine %.
Hungarian business conduct is based on European standards of conduct. You need to prepare well for the meeting, know the market situation, have all the necessary certificates ready, references are an advantage. The specific feature is the Hungarian language, which is not related to any other language in the Central European region. During negotiations, Hungarian is usually the language used, however, for the younger generation of businessmen, English is usually not a problem.
As far as bilateral relations are concerned, Hungary is among the countries that are relatively similar to the Czech Republic in both population and area. The Czech Republic and Hungary are connected both by a common history within the Habsburg Monarchy or a common fate of post-war integration into the so-called Eastern Bloc, as well as currently by membership in the European Union, NATO and the so-called Visegrad Group. For the Czech Republic, Hungary traditionally belongs to the top ten largest trading partners, while mutual trade is also helped by considerable geographical proximity. A number of Czech companies operate in Hungary, some of which also have their own production capacities in the country. Czech companies are supported both by the Embassy of the Czech Republic in Budapest and by the foreign office of PaulSourcing in Budapest.
Practical telephone numbers (emergency services, police, firemen, information lines, etc.)
We recommend obtaining a European Health Insurance Card (EHIC), which proves the patient’s health insurance in the EU, if necessary, in a healthcare facility in Hungary. In such a case, the necessary health care provided during short-term stays (vacation, business trip or study stay) abroad will be covered by the relevant health insurance company. It guarantees access to public health services (e.g. doctor, pharmacy, hospital or health care center services) at the same level and under the same conditions as citizens of the visited country. It is important to note that this card does not replace travel insurance (it does not cover e.g. health care provided by private entities), does not cover the situation when you go abroad for treatment and does not guarantee free treatment.
Important phone numbers:
- Integrated rescue system 112
- Emergency room 104
- Police 107
- Firemen 105
Consular department of the MFA in Budapest – in case of an emergency for a citizen of the Czech Republic in Hungary, call the consular department during working hours (7:45 a.m. – 4:15 p.m.) – tel. +36 1 462 50 25, 462 50 26, 462 50 27, 462 50 14. time, on weekends and holidays – only citizens of the Czech Republic who find themselves in an emergency or a threat to their health or life can use the consular service’s emergency mobile phone +36 30 924 70 81.
The Main Administration for Migration Issues of the Ministry of the Interior HU – National Directorate-General for Aliens Police – Országos Idegenrendészeti Főigazgatóság (National Directorate-General for Aliens Policing) is located at Budafoki út 60., 1117 Budapest. The customer service of the General Directorate and the Regional Directorate of Budapest and Pest County can be reached by buses No. 33 and 133E from Budafoki Street, by bus No. 103 from Kelenföld Station (end of the M4 metro) and by Tram No. 1 from the direction of Szerémi Street. Customer service is at +36 1 463 9292 (Monday to Thursday 8:00 a.m. – 4:00 p.m., Friday 8:00 a.m. – 1:30 p.m.). Website in English – www.bmbah.hu.
Important web links and contacts
Government and Ministries:
- Office of the President
- Office of the Prime Minister
- Cabinet of the Prime Minister
- Office of the Prime Minister
Other important institutions:
- HUNGARIAN EXPORT PROMOTION AGENCY
- HUNGARIAN INVESTMENT PROMOTION AGENCY
- Central Statistical Office
- Hungarian National Bank
- Budapest Stock Exchange
- National Tax and Customs Office
- Hungarian Treasury
- Government debt management agency
- Hungarian Chamber of Commerce and Industry
- National Chamber of Agrarian Economy
- National Intellectual Property Office
- Agricultural Marketing Center
- Courts in HU
- National Information and Communication Service
- Hungarian Press Agency
- Alliance of Hungarian Transport and Logistics Services
- Hungarian Tourist Agency
- Guide to Hungary
- Official site about Budapest and the surrounding area – Budapest Info
- Interactive timetables of Hungarian railways – MÁV
- Budapest Public Transport – Budapest Közlekedési Központ page
- Website of intercity bus transport – VOLÁNBUSZ
- Information about air connections – Budapest Airport
News sources in English:
- BUDAPEST BUSINESS JOURNAL
- ABOUT HUNGARY
- HUNGARY TODAY
- DAILY NEWS HUNGARY
Websites of the Embassy of the Czech Republic, PaulSourcing and the Czech-Hungarian Business Club:
- Embassy of the Czech Republic in Budapest
- Czech-Hungarian Business Club
PaulSourcing: Ten Commandments for Doing Business with Hungary
The PaulSourcing agency has prepared ten recommendations for doing business with Hungary for Czech entrepreneurs interested in business relations with Hungary. In 2020, it was supplemented with 4 current tips.
4 recommendations for entering the Hungarian market during the coronavirus pandemic:
- Searching for business partners Unfortunately, there is no public database in Hungary in which you can reliably search by activity or field of business. Similar search engines contain a lot of inactive companies and individual screening can take a lot of time. Even basic company data such as owners, number of employees, turnover of the last three years, etc. are not available for free. Google is the best for the initial search.The foreign office of PaulSourcing Budapest (ZK Budapest) can help you compile a longlist of potential partners, for which it uses not only paid databases and Google searches according to 6-8 key terms, but also goes through the lists of trade fair exhibitors, contacts trade unions and associations for recommendations, uses own updated database and personal contacts.
- Approaching The initial approach to partners should be done by email, cold calls are not very popular in Hungary and in most cases they will refer you to email communication anyway. A letter in Hungarian will certainly get you faster and further, but avoid Google Translate, which translates into Hungarian with gross errors, use it only to get an overview of the content of a website, email or text. Don’t be afraid to set the email read notification.In recent years, a great improvement in language skills can be seen in the business sphere, English is mainly used. The easiest communication is in the case of employees of multinational companies, managers, buyers, mainly of the younger generation. German is also common among the older generation, and you will often come across a Slovak-speaking person. Communication in English is common in fields such as IT, pharmaceuticals, energy and in most industries, and the food industry is also catching on. The state administration is almost entirely based on communication in Hungarian.In your cover letter, don’t forget to mention the references that are key to success in Hungary and the competitive advantages that set you apart from others. It is ideal to list three strengths. Attach to the email an introduction of your company in English in PDF, price lists, marketing materials, possibly certifications and information about delivery, packaging, etc. It is true that the more information you provide first, the better. Always communicate from a company email address, private domains such as gmail.com and seznam.cz do not appear professional or credible.As part of the assistance service, ZK Budapest can not only translate a cover letter or a one-page introduction to the company, but also address selected potential partners with the added value of being addressed by a state agency in Hungarian.After sending emails, ZK Budapest recommends phone verification, when you need to find out if the person received your email and request feedback. Hungarians are tenacious businessmen, but if communication goes silent for a week, it doesn’t automatically mean disinterest, and it’s not impolite to remind yourself. If the partner is interested in cooperation, it is advisable to arrange a Skype call, or a personal meeting if the circumstances of both parties allow it.In Hungary, the easing of restrictive measures is already underway, business life is returning to normal, but many multinational companies maintain their home offices until the fall, in some cases until the end of the year. Communication can thus be slower, especially in the summer period of July-August, when it is generally very difficult to make progress. Hungary will “wake up” from the holidays only after the public holiday on August 20.
- Trading strategy In contrast to Germany and Austria, selling through agents and on commission is not a common form of business in Hungary. Distributors prefer to get exclusivity from the first moment. If you have an idea of a different business model, it is important to talk about it in the first meetings.
- Preparation of materials To enter the market, you will definitely need documents and marketing materials in Hungarian. Unfortunately, many translation agencies in the Czech Republic work with gross errors that can cost you extra time and money. Do not hesitate to contact ZK Budapest for recommendations of reliable translators or to assess the quality of the translation before serial printing of the catalogs. If you decide to set up your own website, choose a domain ending in.hu instead of.eu and.net.
The Ten Commandments for Trading with Hungary
- Business spirit Hungarians are businessmen at heart.
- Prepare well Prepare very well for the meeting because you will be facing a well-prepared tough strategist.
- Find out information It is important to find out as much relevant information as possible before negotiating with your partner; Hungarians know the market situation, the competition and its prices in detail.
- We recommend personal meetings Hungarians prefer personal meetings, they like to travel, they are more open, but you will gain their trust over time. We therefore recommend frequent personal visits and meetings.
- The preferred negotiating language is Hungarian . They prefer their mother tongue as a negotiating language. The younger generation of businessmen is willing to do business in English as well.
- Hungarians speak openly Hungarian businessmen speak openly even about unpleasant things, they are not afraid to say “no”.
- Make agreements in writing Although they like to act in a “pays everything that was verbally agreed” way, we recommend that you make agreements in writing as well.
- Avoid political topics Do not search for political topics with your Hungarian partner and do not comment on the current domestic political situation, you could come across as offensive.
- Expect an extended payment term Currently, expect a payment term extended to 60-90 days. Check your partner’s creditworthiness in advance.
- Act professionally You will only achieve business success with a professional approach, demonstrating flexibility and with a product or service of the highest level.