Located in Central Europe, Hungary is one of the fastest-growing economies in the European Union. In 2017, the country’s GDP grew by four per cent.
Due to its strategic location between Western and Eastern Europe, Hungary acts as a gateway for trade and investment for countries inside and outside of the EU. It has one of the highest GDP to export ratios in the world, at approximately 92.5 per cent. This indicates a robust dependence on world trade. Hungary’s industrial output and a large part of its agri-food production target mainly export markets, Canada included.
Bilateral trade between Hungary and Canada amounted to $817 million in 2017 and Hungarian exports to Canada grew by 24 per cent. On both sides, machinery-related products take the lead (Hungary exported $210 million worth to Canada and Canadian exports to Hungary totalled $28 million.)
The volume of Hungarian exports is also significant in transportation-related products, mainly cars and car parts ($151 million). The second biggest group of products is the pharmaceutical-related chemical products that contribute more than $82 million to Hungary’s exports. Prepared food and animal-related products also play a significant role in the exports of Hungarian SMEs. Hungary is traditionally a quality supplier of poultry, especially duck and goose. In addition, Canada exports agri-food products such as pulses and wood pulp to the Hungarian paper industry.
Canadian companies, such as car parts giants Linamar and Magna and plane and train manufacturer Bombardier, are all investors in Hungary.
The tourism sector is one of our priority areas, too. Our goal is to convince our many Canadian visitors to stay a couple of days longer in our beautiful country and thus have a chance to explore not only Budapest, but the countryside, too. Hungarian gastronomy and wine culture have a long history, especially the Tokaj region’s dessert wines, which offer a unique experience for wine lovers.
Hungary’s primary objective is to encourage the SMEs, in Hungary and Canada, to step up Hungarian-Canadian trade because, at the moment, multinational or large-scale companies generate most of the trade. Given that, we encourage Canadians to take advantage of CETA, the Canada-EU free-trade agreement, much of which came into effect in September 2017. This agreement opens the Canadian public procurement market to EU companies, but Hungary’s procurement process is also open to Canadians. The procurement aspect of the agreement also helps exporters of value-added products and services, such as medical technologies. Hungary is also interested in encouraging trade in quality food products, keeping in mind that Hungary champions biological and GMO-free production. With this as a priority, we look forward to participating in SIAL Montreal 2018, an international food and beverage trade show, as an exhibitor.
Besides production activities, we aim to create as many development activities in Hungary as possible. In this respect, all Canadian companies are most welcome to approach us, but investments in life sciences, ICT, automotive, logistics and food processing sectors are especially welcome. Our one-stop services are available for all Canadian companies that are interested in opening businesses in Hungary.
I believe Hungary is a land of opportunity for doing business in the EU. Our unique location in the heart of the continent offers great value for companies dealing with logistical services and distribution in Europe. Four major European transportation corridors cross the country — more than any other EU country —making Hungary a focal point of European transportation.
We also have policies aimed at exploiting opportunities that stem from our geographical location. Hungary has tailored its labour legislation in order to allow ample room for creating innovative workplaces based on R&D.
In this context, it is important to note that Hungary offers the most competitive tax scheme in the EU. Company tax is a flat nine per cent and personal income tax is a flat 15 per cent. In 2018, the government reduced the social contribution to be paid by the employer to 19.5 per cent. These elements combine with highly developed modern infrastructure, a competitive, quality labour force and political stability to create an attractive investment environment.
Budapest is one of the largest and most developed cities in Central and Eastern Europe and offers high-end environment and real estate solutions for businesses. The city is served by a direct flight from Toronto that operates seven days a week in peak season.
It is time to move from the phrase “made in Hungary” towards the phrase “invented in Hungary.” Trade commissioners stationed in Ottawa and Toronto are ready to help any Canadian businesses. Our offices offer free consultancy services for Canadian investors and importers and we help companies with technology co-operation and transfers.
Bálint Ódor is the ambassador of Hungary. You can reach him by phone at (613) 230-9614 or email him at mission.ott@mfa.gov.hu.
