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Budapest is the most affordable city to start a business

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Budapest is the most affordable city to start a business

The British has recently conducted a survey in which they compared prices around the world to find where it is the most cost-effective to start a business. They compared utility prices and other costs relevant for business setup, and Budapest came out around the top in each category, making it the best choice overall.

Categories relevant for business owners

For their study, the research team created a list of 70 key cities in OECD countries to be compared. They have selected 5 factors to study, and beside noting exact data to be included in their final table, they assigned each factor a score between 1 and 100. That done, they calculated an average score, and created the final ranking of the cities. The 5 factors are as follows:

  1. Average salaries
  2. Average office costs
  3. Electricity
  4. Internet
  5. Corporate tax

1. Average salaries in Budapest: #2, EUR 17,316 / year

Hungary is located in the heart of Europe, and it offers high infrastructure standards you get in first world countries at Eastern European prices. Excellent local higher education attracts many foreign students, and provides investors with a qualified work force in Hungary. Minimum salaries are defined by law, but what you actually have to pay your employees will depend upon the expertise required to fill each position. You can get an idea of typical salaries in Hungary here, and we are also happy to help you with recruitment.

2. Average office costs in Budapest: #16: EUR 37.2 / year / sq ft

Office costs may vary greatly depending on the location and on the services available at your office building, provided by the building management. Of course, downtown offices are typically more expensive, but since traffic and even public transport is excellent in Budapest, you may be able to strike a sweet deal in one of the outer districts too.

At the same time, you might not even need an office when you are just starting up. In that case, you can choose a virtual office provider to handle your mail, and work remotely or at a coworking office while you are working on your business to pick up.

3. Electricity: #21: EUR 0.12 / kWh

The price of electricity and other utilities is in part governed by the state. At many office spaces it is included in the rent, while you can also decide to install electricity effective equipment. For major electricity consumers, e.g. shopping malls or factories, even installing a micro power plant is an option.

4. Internet: #2: EUR 13.58 / month / household

Internet coverage is great all over Hungary, not just in Budapest. There are various providers with various service packages, with usually at least two providers to choose from at any given office site in Budapest. Broadband connection is not only affordable, but also reliable: the above price is for 60 Mbps or more, with unlimited data and cable ADSL.

5. Corporate tax: #1: 9%

In Hungary, the corporate tax is only 9%, which is the lowest in the EU. Moreover, it can be reduced even further by certain types of expenses. Hungary also offers quick and easy company formation, with just 4-5 business days required to register a company. You also immediately receive an EU VAT number as well as a local tax number, so you can start international trade as soon as you have a corporate bank account.

Got you interested?

Helpers Hungary has been providing business assistance to foreigners in Hungary for more than 15 years. We have helped with the registration of hundreds of companies, and whatever sector you are planning to operate in, we can anticipate your needs and help you come up with solutions in all situations. Contact us today.

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