Asian Financial Forum Infrastructure Investment Session Robert Heffner Deputy Director Hungarian Investment Promotion Agency January 17, 2016
Why invest?
Location - Excellent access to key markets At the crossroads of 4 main European transportation corridors The highest motorway density in the region Extensive railway transportation network Highly developed logistics and telecommunications infrastructure 8 hours driving time with 90 kph from BUD Airport
Hungarian economic policy Stable Upgraded to investment grade The budget deficit below 3% of GDP since 2012 (2.2% in 2016) Inflation rate is record low: 0.4% (2016) and Growing GDP growth 3.7% in 2014, 3.1% in 2015 Exports and Trade surplus steadily growing since 2010 Labour market tendencies Employment reached a historic peak, it has been rising steadily since 2010 The unemployment rate amounted to 5.1% in 2016 Q2 down from 11.8% in 2010 Q1 Flexible Labour Code Dual vocational training following the German model EUR 170 million is being spent on strengthening the dual vocational training from between 2014-2020.
Hungarian economic policy Tax system Gradual move from an income tax based system to a consumption tax based one 15% flat-rate personal income tax Social contribution tax decreased by 5% in 2017 Yearly 2% further tax cuts are expected in the next 5 years 9% flat corporate tax rate from 1 January 2017 Business environment 72 strategic cooperation agreements between the Government and top companies
Investment promotion package 2017 To help driving innovation and growth in various industries: New VIP Cash subsidy for R&D New VIP Cash subsidy for Technology Investments Labor mobility package New Training support scheme
Center for Chinese Investments The biggest Chinese community in Central-Eastern Europe Approved Destination Status (ADS) to Hungary since 2002 Bilingual Chinese / Hungarian School in Budapest opened in 2004 Bank of China present in Budapest since 2003 & has its first clearing center in CEE since 2015 China Investment Promotion Agency, CIPA, MOFCOM set up its European Office in Budapest, February 2010 Five Hungarian Representative Offices in China CIPA-HIPA MOU in Ningbo 2016 Hungary was the first to sign the One Belt - One Road initiative (2015) Budapest-Belgrade train infrastructure project 2015 HIPA CODA MOU in Beijing 2016
Hungarian Investment Promotion Agency (HIPA) HIPA is a national investment promotion organization governed by the Ministry of Foreign Affairs and Trade It provides professional consulting services to interested companies free of charge in a one-stop-shop holistic service model We support investors: In selecting a business location Providing tailor-made incentive offers Providing information on state subsidy issues Identifying investment possibilities Dealing with public authorities HIPA has 105 local representations in 76 countries
About HIPA Pre-decision Implementation Operations Tailored information packages on the economy, industrial sectors, incentives, business environment, supplier network Assistance in location search and evaluation Organization of site visits and partner meetings Supplier search Providing information on permitting procedures Assistance in identifying incentives Intermediate Body for VIP cash incentive (preliminary information, application) Expansion assistance After care services Intermediary body between the government and the companies Supplier search
Hungarian Investment Projects (HIP) HIP database collection of approved private investment project offers 44 projects EUR 1,276 m EUR overall budget Sectors: Real Estate Green Industry Agriculture and Food Industry Manufacturing Innovation Individual project budgets ranging from EUR 1.5 m to EUR 150 m
Lake Park Offices and Residences Summary: The project is a compact city next to Budapest, the capital of Hungary. The project embraces a built-up area of 200,000 m2, which includes office buildings, apartments, shopping opportunities, service industry units, as well as facilities for sports and recreation. There is a conference hotel with an additional conference center. Each segment of this property has been designed with environmentally conscious solutions and green energy. Funding Requirement: EUR 49.5 million Total Project budget: EUR 49.5 million Location: Biatorbágy, Hungary
Gateway to the Silk Road Summary: Former military air base with fair quality existing runways (for heavy aircrafts, but not in operation) and developable land parcels. The site will be served with public utilities, allowing mixed use developments in line with proposed innovation park use. The property represents a unique opportunity for large-scale development with an opportunity for a dedicated airport (suitable for cargo use), direct highway access and connection to a high-speed railway line. Total land area 6,394,000 sqm. BTL ratio 40%. Funding Requirement: EUR 15 million Total Project budget: EUR 15 million Location: Lövői út, Mezőkövesd, Hungary
Infrastructure development projects until 2024 Embankment development Public transport development BUD Airport Cluster Stadium developments Conference hall developments
Budapest Airport Cluster
Hungary awaits China