Europe’s lowest tax rates a big attraction for foreign firms in Hungary, says minister in Bangkok

On Tuesday, Péter Szijjártó, the minister of foreign affairs and trade, said in Bangkok that Hungary regards East-West cooperation as a great opportunity rather than a risk, from which many can profit.

Given the war in Ukraine and the related sanctions, Eurasian cooperation has suffered a big blow, the ministry, quoting Szijjártó, said in a statement. With the collapse of growth based on advanced Western technologies and Russian energy sources, combined with skyrocketing inflation, many countries faced difficulties, even though they were not responsible for the situation, he added.

Szijjártó also noted the Middle East conflict, which has compromised safe navigation in the Red Sea, resulting in expensive freight circumnavigation.

He said all this has negatively affected Hungary, which is among the ten most open economies in the world.

The minister referred to rising energy costs and inflation, which jumped from two percent to 27 percent, “exclusively owing to external influences.”

He said the European Union then decided to heap pressure on Hungary’s “conservative, patriotic” government by freezing Hungary’s community funding.

“But we’ve survived,” he said, adding that 2024 would be “much easier” due to falling energy prices and inflation and the partial release of EU funds.

Amid the fierce competition for investments worldwide, he noted several reasons why it was worth investing in Hungary, including the stable political system, with a government that commanded a two-thirds parliamentary majority, and significant investment incentives as well as Europe’s lowest tax rates.

Thanks to the government’s strategy of opening to the East, Hungary has turned into a major meeting point for Eastern and Western companies, he said, adding that Hungary wanted to see smooth East-West cooperation, while obstacles to trade around the world were undesirable.

“Yet when anyone in Europe says something along these lines … they are classed as a friend of the Russians, Putin’s spy, or a Kremlin propagandist,” he said.

Szijjártó said all companies operating in Hungary could do so unhindered, no matter where they came from, all long as they followed the rules.

He noted that Hungary doubled its 2022 investment record last year, and 82 percent of working capital came from the East, mostly from China and South Korea.

The minister said Hungary had become one of the world’s largest producers of electric batteries, and a large number of suppliers had come from the East, making the country a meeting point for German car manufacturers and Eastern battery-makers.

Szijjártó praised bilateral ties “based on mutual respect”, noting that the Hungarian government “does not interfere in the internal affairs of others”.

He said the Hungarian-Thai trade, worth 730 million dollars in 2023, was record-breaking, and tourism “has also doubled.” He added that

he hoped to convince AirAsia managers to launch a flight to Budapest.

read also:

• Popular international food chain flees Hungary due to PM Orbán and his oligarchs?
• Pricing paradox: Hungarian food costs less abroad – here is why

UPDATE

The minister also announced that

AirAsia could launch a direct flight between Bangkok and Budapest in the autumn, noting that in 2023, tourism figures doubled compared with the previous year, with over 10,000 tourists visiting Hungary and Thailand receiving more than 30,000 Hungarians.

Szijjártó said preparations had been made and relevant talks “will be concluded today”. “We have a good chance of there being a direct link between Bangkok and Budapest in the near future,” he said.

Concerning Hungary’s upcoming European Union presidency, Szijjártó said Hungary would make efforts to reinforce the bloc’s foreign trade relations “in view of a significant deterioration in the continent’s competitiveness in recent years.” The Hungarian presidency will “take rationality and practicality in consideration” and work to accelerate recently resumed talks with Thailand aimed at a free trade agreement, Szijjártó said.

The Hungarian government, Szijjártó said, would lend momentum to talks with Thailand aimed at investment protection, “since more and more investors come from Thailand and trade turnover is on the increase”. The Hungarian economy could benefit from the effects of a free trade and investment protection agreement, he added.

The minister assured his Thai partners of Hungary’s support for Thailand’s request to join OECD. “It is in our interest that the OECD should become stronger, while Thailand’s entry could clearly strengthen the organisation,” he said.

Noting conflicts worldwide and world organisations “seriously influenced by ideologies,” he said building relations was becoming difficult. He added, “It is refreshing to see that in remote parts of the world, there are some countries such as Thailand that pursue a rationalistic foreign policy based on mutual respect.”

“We see eye to eye that each country has a sovereign right to shape their own foreign strategy, promote their own national interests in foreign policy and resist the pressure exerted by strong players in international politics,” Szijjarto said.