If you’re looking for a trading base for the Central and Eastern European (CEE) market, then Hungary could be the ideal location, as it’s located right in the very heart of the Carpathian basin. Hungary is the UK’s third largest export market in the CEE region – 1.9% of Hungary’s imports come from the UK, and bilateral trade in goods and services is worth around £1,849 million.
If you want to start trading in the CEE region, here’s everything you need to know about exporting to Hungary…
The CEE region is full of potential for British businesses – an export market worth over £18 billion, with goods exports doubling over the past decade, and services exports – which account for over £4 billion – trebling.
The UK is the fifth largest investor in Hungary, mainly in the retail, telecommunications and professional services sectors.
What are the pros and cons of exporting to Hungary?
The strengths of the Hungarian market include:
- strategic location in the heart of Europe
- well developed transport network
- open economy
- good infrastructure and communications
- investment incentives
And if you’re thinking of exporting to Hungary, the advantages for UK business, are:
- English accepted as a business language
- western style business culture
- over £28 billion European Union (EU) funding between 2014 and 2020
- UK ‘brand’ viewed positively
Although Hungary has an increasingly westernised business culture, a UK company doing business there can encounter the following difficulties:
- language difficulties, especially with smaller companies and outside Budapest
- legal barriers at public procurement
And if you’re thinking of setting up out there or exporting, make sure your business takes the necessary steps to comply with the requirements of the UK Bribery Act.
And remember, you can now screen share and video conference, using Crankwheel.
How does tax work in Hungary?
If your business is supplying goods or services to the Hungarian market, it must register for and charge VAT, though small businesses can choose to be VAT exempt under certain conditions.
There are four rates of VAT in Hungary:
- A standard rate of 27%
- 18% for central heating, bakery and dairy products, and providing commercial accommodation services
- 5% for some goods and services such as certain pharmaceutical products, books and daily papers
- 0% for some transactions such as radio, television, postal and financial services.
Income tax for individuals is charged at 15%, and for the full lowdown on corporation tax, check out the National Tax and Customs Administration of Hungary (NTCA) website.
How will I be affected by customs in Hungary?
The internal EU single market allows for the free movement of goods and services without any import duties being applied, and testing is mandatory for some imported goods, especially technical and electrical equipment.