Investment Promotion Policy of the

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Investment Promotion Policy of the Hungarian
Government Deputy Minister Dr. Ábel
Garamhegyi September 4, 2007
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H U N G A R Y Land 93,030 km² Population
10,055,000 people GDP (2006) 84,3 million
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WHY Choose Hungary?

• Factors that make Hungary an ideal location
• central location a real business centre in the
  heart of Europe
• economic and political stability
• availability of talented, creative, flexible and
  qualified labor pool
• professional, technical and foreign language
  skills
• reasonable and competitive labor costs combined
  with high efficiency outstanding business
  infrastructure in terms of telecom, power supply
  and office space
• outstanding quality of life

a great place to live and work
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Economic Policy New Equilibrium Programme

• emphasis on consolidation
• immediately and significantly improving the
  financial equilibrium and meet the Maastricht
  criteria in order to introduce the euro by
  2010-2011 (nominal convergence)
• improving long-term competitiveness and creating
  the conditions for a rapid and sustainable
  catching up to the EU average (real convergence)
• Measures of the Programme
• cutting public expenditures (immediately)
• increasing tax revenues by
• broadening the tax base and simplifying the tax
  system at the same time
• structural reforms (health care, education, state
  administration)

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Factors of the Favourable Business Climate

• dynamic macroeconomic growth,
• favourable real exchange rate
• highest FDI stock per capita in the region
• Hungary a bridge between East and West, 4
  pan-European corridors
• well-developed telecommunications and highway
  infrastructure
• highest labor productivity in the region,
  motivated and qualified workforce is available

Economy
Capital attraction
Location
Infrastructure
Productive, qualified, available workforce
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FDI Inflow to Hungary
62 100
Stock of FDI in Hungary
Source National Bank of Hungary
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FDI Stock by Industry and Country of Origin
Source National Bank of Hungary
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Competitive Advantages of Hungary Labour
Productivity GDP per person employed relative to
EU-25 (in purchasing power standards)
Source calculations of the Ministry of Economy
and Transport
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• Competitive Advantages of Hungary
• Attracting FDI
• FDI stock per capital

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• Labour Cost of Production of One Unit of GDP
  (2006)

approximate values source calculations of the
Ministry of Economy and Transport
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Presence of Korean Companies in Hungary
Samsung SDI Samsung Electronics Samsung
EM Hankook Tire KDB Bank Daewoo Mirae Industry
Hanwha MGM LG-csoport Daidong Hungaria Dongwoo Pr
ecision Young Star ELC Engineering

• close to USD 1.2 billion in investment value
  (est.)
• more than 7,000 worklplaces
• about 40 enterprises

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Success Stories Examples

• Hankook Tire Ltd.
• USD 620 million in investment value
• 1.500 new workplaces

• Samsung SDI Ltd.
• USD 260 million in investment value
• 1.300 new workplaces

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Incentive System of the Government

1. Individual, non-refundable grant
2. Tax allowance
3. Job-creation grant
4. Training subsidy

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Possible Fields of Investment

• Traditional Sectors

Additional Opportunities
Based on the number of Korean investors in
Hungary

• RD
• ICT sector
• Biotechnology

Other 8,5
Electronics 32,6
Automotive 58,9
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Thank you for your kind attention!
Dr. Ábel Garamhegyi, Ph.D. Deputy Minister
H-1055 Budapest, Honvéd utca 13-15. Phone (36
1) 374-2746 Fax [phone] E-mail
garamhegyi.abel_at_gkm.gov.hu Internet
www.gkm.gov.hu