Hungary’s competitiveness is strengthened by its low tax burden and well-educated workforce, said István Joó, Government Commissioner and CEO of the Hungarian Investment Promotion Agency (HIPA), in an interview with Világgazdaság.
Eighty-one percent of our investment promotion projects last year involved rural areas of Hungary, thus this is clearly a deliberate strategy, said the HIPA chief.
A primary goal was the development of eastern and northeastern Hungary,”
the results of which are clearly visible today: In Nyíregyháza, Miskolc, and Debrecen, not only were industrial investments made, but significant infrastructure and educational developments were also realized.
In the near future, the focus will shift to southern Hungary and, in particular, to the southwestern Transdanubia region. Szeged has achieved outstanding success with the BYD investment, in Békéscsaba the Singaporean investor Vulcan Shield Global is creating several thousand jobs, and in Makó the large industrial investment by CPMC is strengthening the region.
HIPA is specifically promoting the areas around Pécs, Nagykanizsa, and Szekszárd to investors: these locations are included in all of the investment agency’s offers, and the higher level of support also serves to steer development in that direction.
The policy of opening up to the East has succeeded in establishing stable, trusting relationships with Chinese, Korean, and Indian partners, which today represents a tangible competitive advantage. However, this alone would not be enough: investors take numerous aspects into account. These include political and economic stability and rapid decision-making, as the processing time for a subsidy application is often a decisive factor.
Hungary’s competitiveness is strengthened by its low tax burden, well-trained workforce, and the experience that local workers can also take on complex tasks with high added value,”
says István Joó. In the case of business service centers, companies no longer come here because of low labor costs, but because they find financial, research, and service expertise here that is not available in other countries in the region. Added to this is the well-developed infrastructure and logistics, which is also a decisive factor for Asian investors.
Large international companies from the financial and service sectors that intend to expand in Hungary or establish new branches must expect HIPA to examine the impact that an investment will have on the Hungarian economy in every case: how many jobs will be created, what is the quality of these jobs, and how strongly will the company become embedded in the domestic economy in the long term?
According to the HIPA CEO, it sometimes happens that a prepared project is not realized for strategic or budgetary reasons, but Hungary remains open to high value-added financial and service centers. A current example of this is the decision by international fund manager Janus Henderson to create 400 new jobs in Budapest, which clearly shows that we remain a competitive location in the region, Joó pointed out.
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Minister Szijjártó cited low tax rates as a key factor in encouraging investment.Continue reading
Via Világgazdaság; Featured photo: MTI/KKM
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