After a record year in 2015, foreign direct investments (FDI) inflow to Hungary continued to rise in the first half of 2016, with 38 successfully negotiated projects in the value of USD 1.5 billion, almost as much as in 2015 all over. Germany has been the biggest investor of the country for decades, however in H1 2016 USA ranked on the top of the investment projects list in Hungary. Such prestigious names as IBM, Alcoa, BorgWarner decided to further reinvest. At the same time we also have some newcomers, like Flowserve setting up a brand new shared service center in Hungary.
By now, USA has become the largest investor in Hungary outside the European Union; the total value of investment from the USA exceeds USD 9 billion, and at the moment, there are 1700 American companies in Hungary employing 100,000 Hungarian people. Outside the EU, USA is the most important export market, the second most important commercial partner and the third largest source of import for Hungary. 40 from the 50 largest US companies are present in our country. The Hungarian Government has signed the most (11 in total) strategic cooperation agreements with American and German companies so far; the first one was closed with Coca-Cola.
The successfully negotiated 38 projects in H1 2016 represent a 27% increase compared to the same period in 2015, will create as many as 8,529 new jobs, and generate inward flows of foreign direct investment of USD 1.5 billion, almost as much as in 2015 overall. Automotive industry accounted for 15 projects, followed by the SSCs and the food industry.
8 of the 38 projects came from US companies in the value of USD 189 million, creating 2,000 new jobs. Various industries are represented from medical technology to electronics, but SSC industry accounted for half of the projects and the newly created jobs: IBM and Alcoa decided to make serious expansions in their regional centers, while Flowserve chose Hungary to establish its shared services center for the North-American and EMEA regions.
Vast majority of the overall FDI projects were reinvestments: these companies do not repatriate their profit but reinvest it in Hungary, and keep creating more jobs and added value.
The Hungarian investment environment is becoming increasingly recognised abroad: according to the investment annex of fDi Magazine, a Financial Times Group publication, Budapest continues to be featured in the top 10 list of the most attractive Eastern European cities.
Róbert Ésik, President of HIPA said: the second half of 2016 may bring further success because HIPA is currently managing 169 active FDI projects that await approval. Should those projects be approved and completed according to currently known parameters, a total of 33,817 new jobs could be created with foreign direct investment of USD 5.4 billion.
The Hungarian Investment Promotion Agency (HIPA) offers free of charge, one-stop-shop management consultancy for foreign investors. Operating under the supervision of the Ministry of Foreign Affairs and Trade and having an extensive network of contacts in the public and private sectors, HIPA provides high-quality support for critical investment decisions, and a wealth of supplementary services. www.hipa.hu
Compliments of Hipa – a member of the EACCNY