Establishment of foreign-owned companies to be simplified by Hungarian government
The Ministry for National Economy set out to speed up the administrative process of establishing foreign-owned companies. By revising company establishment regulations, the ministry aims to facilitate the inflow of foreign capital into Hungary, thus bolstering the country’s economic performance.
Reforms are underway to simplify the establishment of foreign-owned companies
The Hungarian government is taking steps to streamline the process of establishing foreign-owned companies in Hungary through three key innovations, as reported by Portfolio, citing a recent announcement from the Ministry for National Economy.
Collaborating with the Ministry of Justice and the Ministry of Finance, the Ministry for National Economy has identified obstacles faced by foreign and third-country investors in establishing foreign-owned companies in Hungary.
It has become evident that significant improvements are necessary to assist English-speaking individuals in navigating administrative procedures.
According to Origo, in order to eliminate factors that negatively affect competitiveness, measures must be devised and implemented to reduce administrative burdens on entrepreneurs. The process of establishing foreign-owned companies or businesses by third-country investors must be substantially simplified and accelerated.
Currently, it takes approximately 15 days for foreign investors to set up foreign-owned companies in Hungary. The ultimate objective of the reforms is to ensure the availability of the one-day company establishment option in English.
The Ministry plans to implement the following three main steps:
- Publishing contract templates in English for foreign investors to facilitate access to the one-day company establishment scheme.
- Publishing a standardised, English-language document regarding the admissibility of foreign documents during the company establishment process.
- Allowing owners the freedom to choose the currency for the founding of their companies in the contract templates, as part of the simplified registration procedure.
The relevant decrees and legislative amendments are currently under development, noted the Ministry for National Economy. It is anticipated that the reduction of administrative burdens and simplification of procedures will significantly enhance competitiveness, fostering an attractive business environment for foreign investors in Hungary.
Orbán cabinet sets ambitious economic objectives for 2030
As we previously covered, Minister of the National Economy Márton Nagy announced that the government anticipates a 2-3 percent growth in the Hungarian GDP in 2024. By 2025, they envision a 4 percent growth rate, which, they claim, could be sustained to ensure the country’s long-term competitiveness. The government aspires to achieve 90 percent of the EU’s development by 2030.
Nagy highlighted that the country’s competitiveness strategy was designed on the basis of feedback from over 1,000 businesses and will entail fine-tuning the economy rather than a complete overhaul.
In addition to incentivising foreign-owned entrepreneurship in Hungary, the government aims to increase real wages, narrow the wage gap, promote the development of a high-quality workforce, support R+D+I and bolster Hungarian industrial companies.
Furthermore, efforts will be made to diversify the country’s goods export, with a focus on emerging technology sectors as well as the food industry, healthcare, chemical industry and steel and plastics manufacturing.
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Source: Portfolio, Origo