The Hungarian capital city, Budapest, has been on the rise for some time now. Its significance is growing not only from a touristic point of view but also when it comes to business. More and more European entrepreneurs choose Budapest as the starting point of their journey, favouring the Hungarian capital over the likes of London and Berlin.
A new study conducted by Startup.co.uk revealed that Budapest was chosen as the number one location for starting a business out of 80 other cities, taking into consideration the aftermath of Brexit, for example. Budapest is appealing to more and more people looking to invest and start a business. There are various incentives to lure tech entrepreneurs, among others, to the Hungarian city, including business accelerators and funding sources – reports Forbes.
Highly skilled workers
Excellent examples are the two startups Steven Tasker co-founded, Supersize Digital and Polka Dot Tiger. Tasker explained the benefits of starting the business in Budapest:
“We’ve been successful with this so far as we’ve been able to run it at competitive rates and hire highly qualified team members at a lower salary range compared to the UK.”
Tasker first visited Hungary in 2010, as part of an Erasmus exchange program. He fell in love with the city and decided to return after graduating. Back in 2011, however, the startup scene in Budapest was progressing rather slowly. Tasker returned to the UK and climbed the corporate ladder quite quickly. In 2016, he took a leap and founded his own company. However, due to the extremely competitive market in the UK, he needed to look for other options for his company to survive.
He visited Hungary again to see if anything had changed over the past five years. He was rather surprised about what he found:
“The once slow startup scene was now thriving, with startups everywhere.”
He decided to relocate the hub of his business idea to Budapest, and he did not regret the decision. It became a huge success in just a year.
“We had a competitive edge in our cost-effective prices and a highly skilled local workforce who were just as competent if not more skilled than the workforce back home,” – he said.
Tasker also found that one of the greatest assets of Budapest was the human resources that became available when relocating the business to Hungary.
“It has a young, highly educated, technically capable workforce who are eager to work, learn and get stuck in, and very rarely need motivating,”- he said.
The role of the government
The Hungarian government also played a part in making Budapest the number one place for startups. At 9%, Hungary actually has the lowest corporation taxes in the EU, and there is also an option for companies to reduce the corporate tax base with the help of the ‘early stage’ status. There are several companies based in Budapest that are on the path of conquering Europe and perhaps the world one day, including Prezi, LogMeIn or Tresorit.
As Tasker puts it,
“With all these benefits and the backdrop of one of the most beautiful cities in Europe, it’s easy to see why many startups are setting up camp here.”
However, there are a few drawbacks those choosing to start a business in Budapest have to face. One of the biggest ones is inflation. While Hungarian living standards are rising, salaries do not match this, resulting in many people resolving to move back to their hometown where they will have a harder time finding a good job.
Nevertheless, the positives outweigh the negatives, and we hope to see Budapest’s significance grow even more in the future.
For more news, check out this article about the Hungarian startup performing a show for the British royal family.
Featured image: Alpár Kató – Daily News Hungary ©