US-Hungary business relations

Diplomatic Relations: The website mentions the 100th anniversary of diplomatic relations between the United States and Hungary. As of 2024, this milestone has been reached, marking a century of diplomatic engagement.

A mutually beneficial business relationship at a glance

Export Destination: The United States remains Hungary’s leading export destination outside of Europe.

  • Foreign Direct Investment (FDI): The U.S. continues to be a significant investor in Hungary, with over $12 billion in FDI.
  • Employment by U.S. Companies: Approximately 1,700 U.S. companies operate in Hungary, employing over 106,000 workers.
  • Presence of Major U.S. Companies: 40 out of the 50 largest U.S. companies maintain operations in Hungary.
  • Job Creation: In 2020, during the pandemic, U.S. investments created 2,496 jobs in Hungary, accounting for 24.7% of all jobs created that year.

Why Hungary?

  • Tax Rates: Hungary continues to offer competitive tax rates within the EU, with a flat income tax rate of 15% and a corporate tax rate of 9%.
  • Unemployment Rate: As of mid-2023, Hungary's unemployment rate was approximately 3.9%, remaining one of the lowest in the EU.
  • Employment Levels: There are at least 36,000 more workers employed than before the pandemic.
  • GDP Growth Forecasts: According to the European Commission's forecast, Hungary's GDP is projected to grow by 5.5% in 2022.
  • Educational Excellence: Hungary boasts a well-educated workforce, with six universities appearing in the QS World University Rankings.
  • Investment Destination: Site Selection magazine has recognized Hungary as one of the top 10 most popular investment destinations globally for three consecutive years.
  • Political Stability: Hungary maintains a stable political landscape, facilitating quick and efficient decision-making within the government.
  • Pro-Business Environment: The Hungarian government is known for its pro-business stance, offering effective incentive programs to foreign investors.
  • Incentive Programs:
    • Cash Subsidies: Available for investments, training, job creation, and R&D.
      • Investment subsidies depend on investment size and region, with certain investments eligible for aid of up to 50%.
      • Training costs may be subsidized by 50%-70%.
    • Tax Incentives:
      • Investors may be eligible for an 80% reduction in corporate taxes in the first year following the investment.
      • In certain cases, the employer’s contribution to the employee’s income tax (social contribution tax) may be halved or eliminated.

Recent U.S. Investments in Hungary

  • BorgWarner: Invested $22.3 million and $14.5 million in two developments in Oroszlány, northeastern Hungary.
  • Jabil: Completed a project in Tiszaújváros, in the northeast, worth just over $3.4 million.
  • GE: Invested $11.1 million to expand digital development centers in Hungary.
  • IBM Client Innovation Centre: Created 300 new jobs with an investment of nearly $11.7 million.
  • Support Services Group (S2G): Established its first European unit in Budapest.
  • Diligent: Established its global product development center in Budapest with an investment worth over $37.5 million, creating more than 300 high-value-added jobs.