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How to Do Business in Hungary

Located in Central Europe, Hungary is one of the fastest growing economies in the EU. Due to its strategic location between Western and Eastern Europe, Hungary acts as a gateway for trade and investment for countries both inside and outside the Schengen zone.

 

The US is the second largest investor in the country, since over 1,600 companies have some kind of ties to America. Besides its location, US businesses mainly seek Hungary because of its well-developed infrastructure, highly-skilled workforce, and competitive prices. Several global companies, including GE, Microsoft, IBM, Coca Cola, Morgan Stanley, Audi, Mercedes, and Alcoa have facilities in Hungary, in manufacturing as well as services.

 

US businesses mainly seek Hungary because of its well-developed infrastructure, highly-skilled workforce, and competitive prices

 

Home to the EU Institute of Innovation and Technology, Hungary places great importance on innovation and knowledge-based technologies. The automotive, electronic, and logistics industries are particularly attractive to foreign investors. In recent years, shared services in back-office and call-center operations became very popular as well.

 

The hottest Hungarian goods on the export market are auto parts, motor vehicles, machinery, and pharmaceuticals, as well as high-quality delicatessen, including foie gras and speciality wines. US small businesses can benefit from attractive prices and great quality.

 

The country is well integrated into global economy, and is dependent on international trade, which caused the government to create incentives aimed at helping foreign investment and exports. Although several government policies have been criticized, and even made headlines all over the world, business and trade have not been affected.

 

The hottest Hungarian goods on the export market are auto parts, motor vehicles, machinery, and pharmaceuticals, as well as high-quality delicatessen, including foie gras and speciality wines

 

Traditionally an agriculture-oriented country, the most important products of the sector are wheat, corn, sunflower seed, potatoes, sugar beets, cattle, poultry, and dairy. Hungary’s key industries are chemicals and pharmaceuticals, textiles, mining, motor vehicles, processed food, and construction materials.

 

Hungary is a member of several international organizations, including the European Union, NATO, OECD, and WTO. Fun fact: Hungary is home to several thermal baths, and the second largest thermal lake in the world.

 
 

Introduction to Hungary

 

Hungary is a parliamentary republic. As a unitary country, Hungary is not divided into states or provinces but 19 counties, administrative divisions with less power than states. Hungary is landlocked; but thanks to the Danube, Europe’s second largest river, the country is well connected to the heart of European trade.

 

The territory of Hungary comprises of 35,920 square miles. The country has 9.85 million inhabitants, and population density is 272.7/sq mi (compared to 90.6/sq mi in the US). Urbanization is high: 72% of people live in urban areas.

 

The majority of the population (80%) is Hungarian. There are two significant minorities: Roma (6.1%) and German (1.3%). Christianity is the predominant religion (52.8%), while 18% of the population is not affiliated with any religion.

 

Major Cities

 
Hungary-Major-Cities
 

Budapest

The capital and the largest Hungarian city, Budapest has 1.75 million inhabitants. As the most important economic, financial and trade hub of the country, Budapest is home to many international companies, including Morgan Stanley, Citigroup, GE Capital, General Motors, Exxon Mobil, British Petrol, and WizzAir.

 

With over 40 universities and colleges, Budapest is an educational and research center. Many startups and tech companies have their headquarters in the city. Fashion, arts, tourism, and retail play a large role in the economy of Budapest. Since the country is heavily centralized, many suppliers and businesses are located in the capital.

 

Debrecen

Located in Eastern Hungary, Debrecen is home to 207,000 people. The city serves as the main economic and trade center of the eastern counties. Agriculture, health care and education are important contributors to the city’s economy. Teva, BT, National Instruments, and IT Services Hungary all have offices in Debrecen.

 

Szeged

The third largest city in Hungary, located in the south of the country. Known for its food industry, Szeged is home to many traditional Hungarian dishes including fish and goulash soups, as well as the spice paprika and the famous Pick salami.

 
 

Currency

 

Hungary is not a member of the Eurozone because the country has yet to fulfill the economic and financial criteria to be able to adopt the euro. The official Hungarian currency is the forint (HUF). The value of the forint is well below the USD; 1 USD is usually worth between 210 and 280 HUF. Inflation is currently at 0.4%.

 
 

Language

 

The official and national language of the country is Hungarian, and there are eight recognized minority languages, including German and Romani. English is the 1st second language taught in most schools, but only 16% of the population claim they can speak English fluently.

 

Since most business people active in international trade are proficient English-speakers, it’s highly likely that language won’t be an issue

 

Since most business people active in international trade are proficient English-speakers, it’s highly likely that language won’t be an issue. However, if you’re scheduling a meeting in Hungary, it’s best to inquire ahead whether you’ll need an interpreter.

 
 

Holidays in Hungary

 

There are 13 public holidays in Hungary. Business may be a bit slower from mid-July to mid-August, when most families take time off for vacation. Working hours are generally from 9am to 5pm, but some businesses may have a different schedule.

 

HolidayDateObservance
New Year’s Day (Újév)January 1Nationwide
National Day (Nemzeti Ünnep)March 15 Nationwide
Good Friday (Nagypéntek)The Friday before Easter SundayNationwide
Easter Monday (HúsvéthétfőThe Monday after Easter SundayNationwide
Labor day (A munka ünnepe)May 1Nationwide
Pentecost Sunday (Pünkösd)49 days after EasterNationwide
Whit Monday (Pünkösd hétfő)The Monday after PentecostNationwide
The Founding of State (Államalapítás)August 20Nationwide
National Day (Nemzeti ünnep)October 23 Nationwide
All Saints Day (Mindenszentek)November 1Nationwide
Christmas (KarácsonyDecember 25Nationwide
Boxing Day (Karácsony másnapja)December 26Nationwide

 

Communication from the US

 

Email

Since most business people working in foreign trade speak a good level of English, you can rely on English when writing emails. Although most businesses would respond to a cold call, it’s best if you explain how you got their contact info before you outline your proposal.

 

Hungarian people value personal contact. Once you have an established relationship with your Hungarian business partner, you may include a few pleasantries at the beginning, or at the end, of your email.

 

Making calls from the US

The international calling code of Hungary is +36. To make a call from the US, follow these steps.

 

  1. Dial 011 to exit the US
  2. Dial 36 for Hungary
  3. Dial the 8 digit number for a landline, or the 9 digit number for a cell phone
  4. Cell phone numbers start with 20, 30, or 70
  5. Example: 011-36-x(x)-xxx-xxxx

 
 

Finding a Supplier

 

The Hungarian National Trading House has a database of available Hungarian suppliers in various sectors. They also offer their services to connect potential business partners and organize meetings to help facilitate trade.

 

Another useful starting point is the Hungarian Investment Promotion Agency (HIPA), which is dedicated to help foreign investors and international business people to find the right partners in Hungary. In addition, the American Chamber of Commerce also provides assistance to US small businesses seeking a Hungarian supplier.

 
 

Traveling to Hungary

 

Hungary uses the Central European Time (CET), which is UTC+1 hour. Budapest is 6 hours ahead of Washington, DC. Cars drive on the right side of the road, and Hungary uses the metric system of measurements.

 

Visas

Hungary is part of the Schengen Agreement. If you intend to stay for less than 90 days in Hungary for touristic or business purposes, you won’t need to apply for a visa. In addition, you’ll be able to travel on to any other Schengen country without further border checks.

 

If you want to stay longer than 90 days, you can apply for a visa at the Hungarian consulate closest to you.

 

Using a Cell Phone in Hungary

Cell phone coverage is excellent in Hungary, even in more remote rural areas. You can use your US cell phone in Europe, provided it runs on the GSM 900/1800 network. However, since roaming costs are usually quite high, it’s advisable to buy a SIM card for the duration of your stay. Since the EU abolished all roaming costs for EU cell phones within its whole territory, you can use your Hungarian SIM card anywhere in the EU free of roaming charges.

 

You can use your US cell phone in Europe, provided it runs on the GSM 900/1800 network. However, since roaming costs are usually quite high, it’s advisable to buy a SIM card for the duration of your stay

 

There are three cell phone carriers in Hungary: Telekom (T-Mobile), Telenor, and Vodafone. The best option is buying a pay-as-you-go card, available in phone shops, newspaper stands, and many supermarkets.

 

Internet

Hungary is widely connected to the internet, especially Budapest and the larger cities, as well as all major tourist destinations. Most hotels offer wifi (some even free of charge), as well as many restaurants, cafés, shopping malls, and tourist information centers. Several trains are equipped with wifi as well.

 
 

Major Trade Shows

 

Trade shows are an excellent opportunity to present your company and find potential customers and business partners. Here’s a list of the main Hungarian trade shows.

 

WhatWhere
WhenWhat about
CONSTRUMABudapestSpringConstruction
ReneoBudapestSpringRenewable energy
Automotive HungaryBudapestFall Every Two YearsAutomotive industry
Energy Trading Central and Eastern EuropeBudapestSummerEnergy trading
MACH-TECHBudapestSpringMachine manufacturing
Agro+MashexpoBudapestWinterAgriculture and agriculture machinery
SIRHABudapestWinter Every Two Years Food, hotels, restaurants, catering
TravelBudapestWinterTourism
GEPETBudapestSpringPET trade, applications, recycling

 

Although it’s not strictly a trade show, we have to mention Brain Bar Budapest, which is an annual global conference on innovation, technology, and the future.

 
 

Business Culture

 

Hungarians are proud of their long history, their creativity, the scientific achievements of their compatriots, and their culture. Hungarian business culture is deeply rooted in this pride. However, because of the country’s long and difficult history (and being frequently occupied by other countries), Hungarians may be a bit distrustful upon first meeting a new potential business partner. This distrust is based on the belief that the other party may want to take advantage of them. Honesty, straightforwardness, and a detailed explanation of how your cooperation will benefit both of you will quickly put your prospective Hungarian partner at ease.

 

Most businesses in Hungary tend to be rather hierarchical. The manager is regarded as a leader above their team, and managers are solely responsible for making decisions. Although input is expected from all employees, their opinions are not always taken into account when making a decision.

 
 

Business Communication

 
Hungary-bus-comm

Hungarians are generally passionate and warm people. That said, business communication tends to be rather formal, especially when forming a new business relationship. Work atmosphere depends on the size and nature of the company. Older, larger companies are increasingly formal, while smaller businesses may have a more relaxed atmosphere.

 

Hungarians prefer face-to-face meetings. But given the distance to the US, communicating over the phone and via email works perfectly fine. However, if you get the chance, pay a visit to your business partner and enjoy the famous Hungarian hospitality.

 

A traditional sense of politeness still lingers in Hungary. That means that men usually hold doors open for women, offer to carry papers and luggage, and handshakes are always initiated by women.

 

Many Hungarians have a dry, self-deprecating sense of humor. In addition, Hungarians tend to be more pessimistic than other nations and like complaining about everything, including the weather, traffic jams, or politics. Try not to take this pessimism at face value and resist being drawn into a “complaining match,” which you will lose. Nobody has it as hard as Hungarians.

 

A traditional sense of politeness still lingers in Hungary. That means that men usually hold doors open for women, offer to carry papers and luggage, and handshakes are always initiated by women.

 

Eye-contact is very important as it signals honesty and trust. Social distance is about an arm’s length, and touching is limited to the arms, shoulders, and among men: the upper back.

 

Business meals are usually scheduled between noon-2pm, or 7-9pm, at a restaurant. Hungarians are proud of their cuisine and hospitality. Try a traditional Hungarian dish to impress your partner. Dining etiquette is similar to other European countries.

 

Mutual trust and understanding is essential for a good business relationship. Follow our tips on how to get your business partnership off on the right foot.

 

The First Meeting

 

Attire

Business dress code in Hungary is rather formal. For men, suits and ties in conservative colors are the way to go. Women can wear dress suits or pant suits in somewhat bolder colors than men. A reserved elegance is appreciated by Hungarian business people.

 

Timing

Schedule your meeting a few weeks in advance. Punctuality is valued by Hungarians; however, they understand if something comes up that causes you to run late. Make sure to let your partner know if you’ll be more than 10 minutes late.

 

Introductions

Fun fact: Hungarian names are reversed, meaning that the last name comes first and the first name last (and potential middle names are the very last. Yes, we know.) However, when meeting international partners, Hungarian business people may say their names in the English way. Confusion guaranteed. The trick is to exchange business cards and see the names in writing. If the card is in English (and most Hungarians active in international trade have their business cards translated into English), you can rest assured that the order of names is according to the international norm. If the card is in Hungarian, then the names are reversed. Additionally, most Hungarians print their last names in capital letters to avoid confusion.

 

Handshakes are common when introducing yourself. Address your partner by their last name with Mr. or Ms. before you’re invited to use first names. Since Hungarians prefer friendly relationships to formal ones, you may start addressing each other by first names after a couple of meetings (or exchange of emails). Using titles (unless you’re addressing a medical doctor or a university professor) is not necessary.

 

Business Cards

The exchange of business cards usually occurs at the beginning of a meeting (or when you meet a potential partner somewhere). Hungarians love handing out and collecting business cards, so make sure you have yours on you. There’s no ritual associated with it; just make sure to read it carefully and put it away into its proper place (not your back pocket). Alternatively, you may put the card in front of you on the table in the order your negotiating partners are sitting. That way, it will be easier for you to remember names.

 

Small Talk

Hungarians tend to exchange a few pleasantries before getting down to business. You can expect about 5-10 minutes of small talk. Safe topics are your positive impressions on Hungary and Hungarian tourist attractions, sports, art, culture, and traveling. Avoid talking about politics, family, and Hungarian history. Hungary lost two-thirds of its territories after WWI, and it remains a painful issue for some people.

 

Gifts

Gift-giving is not an essential part of Hungarian business culture. However, gifts may be exchanged when you reach an important milestone in your relationship, like signing a contract. An item with your company logo, or a traditional gift from your hometown is perfect for this occasion. Sending Christmas greeting cards is customary.

 
 

Business Negotiations

 

As mentioned earlier, Hungarian business people may be more reserved at first before getting to know and trust you.

 

Before starting negotiations, inquire whether you’ll need to bring an interpreter. Business negotiations usually run according to a written agenda. However, your Hungarian business partner may deviate from the agenda to insert a personal anecdote, which can result in meetings running late.

 

When negotiating, Hungarians tend to be painfully straightforward and honest

 

When negotiating, Hungarians tend to be painfully straightforward and honest. Don’t be offended, as this is not personal at all. It’s just a way of laying out all cards on the table and raising every possible issue, even uncomfortable ones.

 

Most Hungarians are experts at haggling and will most likely not accept your first offer. Try to make a reasonable offer while still leaving some room to maneuver. Be thorough and knowledgeable. If you want to convey a lot of information, it’s advisable to send the material ahead of the meeting so your partner can read it beforehand.

 

Negotiations are usually somewhat slower than in the US as Hungarians like to look at every issue from all possible angles. Trying to rush the process is not going to help. Don’t talk down to your partner or appear condescending, as Hungarians hate to be treated less than equals.

 

Business people in Hungary like the written word. Once a contract is signed, it is usually adhered to. Similarly, follow-up documents and minutes are often circulated after meetings.

 
 

Regulations and Permits

 

Since Hungary is a member of the EU, importing Hungarian goods to the US is subject to a low tariff, about 3%. The agency monitoring all cross-border trade is called Customs and Border Protection (CBP).

 

You won’t need to apply for an import permit from the CBP. However, depending on the nature of supplies you’d like to import to the US, you may need to get the approval of other agencies. Typically, goods like plants, animals, brand name apparel, medication, food, and dairy need to be reported to other agencies, including FDA, EPA, DOT, CPSC, FTC, and Agriculture. Depending on where you live, you may even need to apply for an import license from your local and state authorities.

 

The CBP’s website provides all necessary information regarding the process of importing goods to the US. Here’s a short summary about what you need to do.

 

  • Calculate the amount of tariffs levied upon your supplies. This handy tool of the Harmonized Tariff System (HTS) will help you do that.
  • When your goods arrive at the US port of entry, file your customs documents with the CBP. If you had to get a permit for your supplies, you may need to notify the issuing agency about the arrival of your goods.
  • Within 10 business days, the CBP examines your documents along with the goods. Once you paid your duties, your supplies will be released from the border.

 

 

Payments

Although all major credit cards are accepted in the country, many Hungarians still prefer to use cash. In more remote and rural areas, some shops may not have a credit card terminal, which means that having cash on you is probably a good idea. Checks are not used at all.

 

Many Hungarians still prefer to use cash. In more remote and rural areas, some shops may not have a credit card terminal, which means that having cash on you is probably a good idea

 

The easiest and most cost-effective option is paying your Hungarian supplier through Veem. Due to our unique multi-rail technology, Veem allows you to send payments quickly, securely, and as easily as sending an email. Since Veem verifies the recipient before sending the funds, you can rest assured that your payment reaches the intended supplier.


7-05

 

Veem creates a system where both sender and recipient know all the necessary information of the payment: amount, schedule and fees. Since Veem establishes direct links between your and your suppliers’ banks, there are no middlemen and no hidden costs. Our foreign exchange rates are among the best available on the market. Pay your Hungarian supplier through Veem and enjoy the most innovative, cost-effective and hassle-free international transfers.

 

Beware

Although Hungary is a relatively safe country, it’s important to be aware of scams or malicious people. There have been several instances where taxi drivers and restaurant-owners charged foreigners too much for their services. Make sure to choose one of the large taxi companies (for example, Budapest Taxi, City Taxi, Főtaxi, 6×6 Taxi) instead of sole entrepreneur drivers, and check all prices on restaurant menus.

 
 

Useful links

 

Finding a Supplier

Hungarian National Trading House
Hungarian Investment Promotion Agency: Proximity

 

Applying for a Visa

Embassy of Hungary: Consulates and Representations

 

Information on US customs:

US Customs and Border Protection: Basic Importing and Exporting
US Customs and Border Protection: Importing – Licenses/Permits