Rapidly increasing trade volume between Turkey and Hungary

Rapidly increasing trade volume between Turkey and Hungary
31 October 2019

In the last 20 years, the total trade volume between Turkey and Hungary has increased about nearly 15-fold, reaching 2.5 billion dollars. President Recep Tayyip Erdogan is also expected to attend the “Hungary-Turkey High-Level Strategic Cooperation Council Meeting” that will be held this year on the 7th of November to strengthen political and economic relations.

*** This release is originally published in Turkish.
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ISTANBUL (TR) - Following the historical ties and cultural affinity between Hungary and Turkey and Hungary's support of Turkey's foreign policy at the United Nations (UN) and the Council of Europe, bilateral relations gained momentum in all areas. Last month, Hungary became a member of the Turkish-Speaking Countries Cooperation Council (Turkic Council-Turkic Council), which was established to promote comprehensive cooperation between Turkish-speaking countries. Positive relations between the two countries have also opened up new opportunities in the commercial field. The total trade volume between Turkey and Hungary in the last 20 years has increased by about 15 times. Every year regularly performed "Hungary-Turkey High-Level Strategic Cooperation Council Meeting" is to be held this year on November 7, 2019, with the participation of Prime Minister Recep Tayyip Erdogan in Budapest.

Record levels were reached in trade volume.

In 2018, trade volume between Turkey and Hungary Taking a record-breaking $ 2.5 billion. In the first 8 months of 2019, trade volume reached USD 1.8 billion. Turkey Business Forum held in Hungary in the past year by revising the two countries' leaders announced that they targeted trade volume target of 6 billion euros. Turkey's first domestic product group exported to Hungary, with motor vehicles and parts, while iron and steel and textile products; imported products include land vehicles, electrical machinery and devices and live animals. Turkey-Hungary in foreign trade, customs union agreement completely while applying industrial products originating in Turkey are exported duty-free to Hungary.

The number of Turkish companies in Hungary exceeded 500.

According to data from the Central Bank of direct investments made since 2002 from Turkey to Hungary it came to $ 65 million. According to the DEİK Business Council, this number exceeded $ 1.5 billion with indirect investments. The investments of Turkish companies, which show great interest in Hungary, are concentrated in the logistics, telecommunications, construction, tourism, energy, and food sectors. The number of Turkish or Turkish partner companies operating in the country has already exceeded 500.

EU membership stands out with its position, incentives and tax advantage.

Budapest-based law firm Gurcan Partners, co-founder of Av. Bedrettin Gurcan, EU membership, strategic location, local incentives, tax advantages and easy to set up five issues, he said. Reminding that Hungary became a full member of the EU in 2004, Av. Bedrettin Gürcan said, ken When deciding to invest in Hungary, it is not only a country with a population of 9.8 million but a gateway to the European market of approximately 510 million. Especially with its fast-growing economy after 2015, Hungary is one of the Central European countries that act as the engine of growth in the EU ”. According to the Hungarian Statistical Office data, the largest investment in the country is in real estate, motor vehicles and consulting.

The country with the lowest corporate tax in Europe at 9%

In Hungary, which has a competitive tax system, the corporate tax rate has become the lowest value in the EU with 9 percent since 2017. Social security premiums have been reduced to 22% in the same year and the personal income tax rate is 15%. The overall VAT rate is at 27%. Especially the 9% corporate tax advantage attracts the attention of Turkish software and foreign trade companies. Montenegro, which has nearly the same tax rates, has recently been popular but offers more opportunities to Turkish investors with the commercial, economic and social advantages of Hungary's EU membership since 2004 and its integration into the Schengen region.

Availability in less than 24 hours throughout Europe

Addressing the strategic position of Hungary, which houses five European highways and three international transport corridors, Av. Can The country, which is ideally located in the center of Central Europe in terms of production, service and logistics, is an attractive market for Turkish companies wishing to expand their European operations. Hungary has the possibility to distribute all over Europe in less than 24 hours. Third in the EU in logistics Lojistik.

420 million dollars of credit to Turkish companies

Underlining that Hungary offers a wide range of incentives, both paid and unrequited, to facilitate investments. Bedrettin Gürcan said, bazıları Some of the incentives up to 50% are provided as loans and some as grants according to the region where the investment will be made. While the rates applied in incentives vary by region, maximum exemption rates are given according to the size of the investment. Incentive rates can be increased by 10% for medium-sized companies and 20% for small firms. Hungarian Eximbank, which wants to attract Turkish investors to the country, opened a credit limit of 420 million dollars in order to support this aim.

Unlike other EU countries, setting up a company is much easier

Referring to the ease of company installation Av. Bedrettin Gürcan said, "We support the commercial activities and establishment of many Turkish and foreign well-known private companies in Hungary. It is possible to establish a company by proxy in Hungary and the establishment of the company results in 2-15 days. Unlike most European countries, opening a bank account is also free. The total installation cost of a company varies between $ 1,500-5,000.”

Contact: Tülay Genç | [email protected] | +90 (850) 885 12 55