FM Szijjártó on Hungary’s new investment incentives: ‘Helping Hungarian businesses by attracting technology-oriented investments’
Hungary offers incentives for investments that will “help Hungarian businesses and the Hungarian people” by attracting technology-oriented capital to the country, said Minister of Foreign Affairs and Trade Péter Szijjártó in an interview on Kossuth Radio.
The new incentive scheme, which includes measures to reduce taxes for companies spending on R&D and places priority on technology-oriented investment without requiring the creation of new jobs, will help Hungary continue to keep unemployment low and increase wages as well as promote Hungary’s highly skilled workforce and attractive corporate tax incentives that have helped it achieve record growth.
“On the one hand, we help Hungarian companies reach foreign markets so that they can export as much as possible,” said Minister Szijjártó, “on the other hand, we bring investments from foreign companies to Hungary.”
“Products and services produced by the Hungarian people are globally competitive,” he said, adding that the growing number of foreign investments means that “more and more Hungarians have a secure job and a predictable future, so more and more can take a step forward from time to time.”
“When we decided to pursue a foreign policy focused on foreign trade, we kept track of one thing that was in Hungary’s interest,” said the minister, “to help Hungarian businesses and the Hungarian people.”
In today’s international climate, we see intense competition to attract foreign investment, he said in the interview that aired on Good morning, Hungary! The new investment incentive scheme, which will be introduced on October 1st, is meant to give Hungary an edge in that stiff competition.
“Hungarian people perform well worldwide, and there is a demand for their work,” the minister said. He also highlighted Hungary’s impressive growth.
“It is gratifying that this year's, first-half figures are encouraging, as growth for the first half of 2019 is reaching, and in many cases exceeding, the record first half of 2018,” said FM Szijjártó. He also pointed out that “the numbers show that…the representation of the Hungarian people in the field of foreign trade is much more pronounced today than it was under the left-liberal government.”
In 2018, Hungary saw a record number of 98 investments, creating more than 17,000 new jobs with a value of EUR 4.3 billion, four times higher than in 2009. Germany is the country's number one foreign trade partner in terms of trade as well as investment (6,000 German companies employ some 300,000 people), followed by the United States (1,700 US companies employ some 103,000 people).
The new investment scheme also enables the government to support technology-oriented investments that bring new processes, methods, and technologies to Hungary and add value to existing jobs.
The minister of Foreign Affairs and Trade also drew attention to the fact that, along with new investments coming to Hungary, salaries continue to increase significantly.
“While the average wage was HUF 304 thousand in 2017, it was already HUF 425 thousand last year, which means a 40 percent increase in one year,” he said, “and the average wage in the first half of this year was already HUF 505 thousand, which means a 21 percent increase.”
Szijjártó pointed out that there are two tools for obtaining high-value jobs: continuous training and financial incentives. Aside from having the skilled labor that international companies are looking for, companies in Hungary can also deduct double the amount spent on R&D from their tax base. They also only have to pay half of the social security tax on wages for those working in R&D. All of this makes Hungary an attractive location for international companies.
Finally, the minister noted that Hungary teetered on the brink of bankruptcy in 2010 due to the failures of previous liberal governments. But today, thanks to the hard work of the Hungarian people and the alliance between the Hungarian people and the current government, Hungary is no longer part of the problem in Europe. Instead, Hungary is a critical contributor to strong economic growth and stability going forward as well as an example of a successful economic model for others to follow.
Photo credit: lokal.hu