Hungary foreign Investments incentives

Hungary Encouragement Laws
Investment Encouragement Laws for Foreign Investors in Hungary (2025)
- Legal Framework for Foreign Investment
- Hungary encourages foreign investment through various laws and incentives. The key regulations governing foreign investments include:
- Act XXIV of 1988 on the Investment of Foreigners in Hungary – Provides equal treatment for foreign and domestic investors.
- Act LXXXI of 1996 on Corporate Tax and Dividend Tax – Defines tax benefits and deductions for businesses.
- Government Decree 210/2014 (VIII.27.) on Strategic Investments – Simplifies the investment process for certain large-scale projects.
- Act LVII of 2018 on the Control of Foreign Investments – Regulates foreign ownership in strategic sectors for national security reasons.
- Investment Incentives
- Hungary offers financial and tax-related incentives to attract foreign investors:
- 1. Corporate Tax Benefits
- Hungary has a flat corporate tax rate of 9%, the lowest in the EU.
- Tax deductions for R&D, investment in tangible assets, and employment creation.
- 2. Cash Subsidies
- Direct cash grants available for large investments based on job creation and capital expenditure.
- Government-backed non-refundable subsidies for specific industries (e.g., manufacturing, R&D, innovation).
- 3. Development Tax Allowance
- Companies making a minimum investment of EUR 3 million (lower in some regions) can receive up to 80% corporate tax reduction for a period of up to 13 years.
- 4. Job Creation Subsidies
- Employers hiring in disadvantaged regions can receive wage subsidies and social contribution tax exemptions.
- 5. EU and Domestic Grant Programs
- Hungary benefits from EU structural funds, offering grants for infrastructure, R&D, and innovation projects.
- The Hungarian Investment Promotion Agency (HIPA) facilitates access to these grants.
- 6. Special Economic Zones (SEZs)
- Designated Industrial Parks and Free Enterprise Zones offer tax relief, streamlined licensing, and infrastructure support.
- 1. Corporate Tax Benefits
- Strategic Investment Sectors
- Hungary prioritizes investment in:
- Automotive and electronics manufacturing
- Pharmaceuticals and biotechnology
- Information technology and shared service centers
- Renewable energy and green technologies
- Hungary prioritizes investment in:
- Hungary offers financial and tax-related incentives to attract foreign investors:
Conclusion
Hungary offers a business-friendly investment environment through low corporate tax rates, financial incentives, and government-backed support programs.Foreign investors can benefit from various subsidies and tax allowances, particularly in strategic industries.