“In view of the fact that there is major global competition for international investment projects, a new investment promotion system will be coming into force in Hungary on 1 October, the goal of which is to ensure that decisions on technology-orientated investment projects are also made in favour of Hungary”, Minister of Foreign Affairs and Trade Péter Szijjártó said on Kossuth Radio’s “Good Morning, Hungary!” show on Monday morning with relation to the international investment conference being held in Budapest.

From among the novelties of the new investment promotion system, Mr. Szijjártó mentioned that the new system no longer cites job creation as a prerequisite for receiving state funding.

“From now on, the Government will also be able to provide funding towards investment projects that bring new processes, procedures and technologies into Hungary, and which increase the added value of existing workplaces”, he said.

“In addition, the investment minimum required to be eligible for a development tax allowance has also been reduced, and in the interests of reducing bureaucracy companies are no longer required to pre-pay a portion of their expected corporation taxes during the course of the tax year, in addition to which various contributions have been merged”, he added.

“At the end of 2017, the average salary paid with relation to jobs created in Hungary by new investments was 304 thousand forints gross, but the average salary paid with relation to jobs by new investments grew by 200 thousand forints to 505 thousand forints gross by the middle of 2019, an increase of 66 percent”, the Minister emphasised.

“There are two instruments for acquiring workplaces that represent a high level of added value: continuous training and financial incentives”, Mr. Szijjártó said.

“The fact that double the money spent on R&D may be deducted from a company’s tax base, and that only half of the usual amount of social contributions must be paid with relation to employees involved in research and development, is also facilitating this” he stated.

Speaking later on Hungarian M1 television’s Monday morning current affairs program, the Minister said that Germany is Hungary’s number one foreign trade partner not only with relation to commerce, but also investments: the 6000 German enterprises operating in Hungary provide work to 300 thousand people. They are closely followed by the Americans: the 1700 U.S. enterprises operating here employ some 106 thousand people.

The automotive industry provides 29 percent of Hungarian industry’s performance, and so according to the Minister it is important for “the investments of the automotive industry, which is entering a new era, to also choose Hungary”. “During the first quarter of this year, Korean companies that are determining the new era of the automotive industry and that are the market leaders in the electric vehicle sector have overtaken Germany with relation to investment in Hungary”, Mr Szijjártó added.

“There are already 110 business development service centres operating in Hungary, primarily providing jobs to young Hungarians with several diplomas, and targeting Generation Y”, he said.

(Ministry of Foreign Affairs and Trade/MTI)