The Carpathian basin is in the heart of Hungary. As a gateway to Central and Eastern Europe (CEE), it is an ideal place in which to set up a UK company. And the budget deficit is below 3 percent of GDP. But average annual inflation is expected to rise to 2.8 percent. Hungary has a strong external, resilient export-driven economy, low private sector and flexible exchange rate regimes. Real wages have continued to grow unbroken and this has led to an increase of purchase power. The foreign trade structure of Hungary is stable. Yet, more than 92 percent of agricultural imports are from EU member states. Neighboring countries, Turkey, China, Japan and the United States. Hungary’s Central and Eastern European relations are actively maintained in addition to opening regional market opportunities, are competing with EU producers with geographic, tariff, regulatory and administrative advantages.
The Hungarian export process
Hungary is a business-friendly country in the sense that it offers an exportable environment for goods. Here’s a general guide on the process:
Identify your target market
Market research: Before you launch any product, you should conduct thorough market research to find out where you can market your products.
Understand regulations: Beyond that, it will help you to know import regulations, labelling requirements and customs procedures in your target market.
Choose a distribution channel
Direct exporting: directly selling to importers or end users in the target market.
Indirect Exporting: Use intermediaries (distributors or agents) to market and sell your products.
Prepare export documentation
Commercial Invoice: A document of detail about the goods exported, value, etc.
Packing list: A description of the shipment including a list of items involved, their quantity and description.
Bill of Lading: An agreement by a carrier to receive a shipment of cargo on each carrier’s books.
Certificate of Origin: A document proving that the goods come from a certain country.
Customs clearance
Export declaration: Send an export declaration to Hungarian Customs.
Customs Procedures: Obey enforcement and procedure of Hungarian customs regulations.
Export Licenses: some goods require specific export licenses or permits;
Payment and financial considerations
Payment terms: With hindsight, you would want to determine the most suitable transaction terms (letter of credit, wire transfer, etc) purposely to minimise risk.
Currency exchange: If you wish, even arrange for currency exchange so that you may receive payments in the currency of your choice.
Banking and financial services: Share with banks and financial institutions your ability (so to the extent you have it) to provide them with satisfying international transactions.
Compliance and regulations
Export controls: Compliance with Hungarian export control regulations as well as international trade agreements.
Intellectual property rights: register trademarks and patents to protect your intellectual property rights.
Environmental regulations: It is obliged to comply with environmental regulations concerning packaging, labelling and transportation of goods.
Additional tips
Seek professional advice: There are several things to consider when consulting with an export consultant or international trade advisor about when it comes to exporting.
Utilize government resources: Use government resources and access to the government’s export promotion agencies for market information, financing and access to export assistance.
Join trade associations: It can also be done by membership of relevant trade associations
All enterprises in the supply of goods or services in Hungary must register for and charge VAT. There are conditions under which small businesses can choose to be VAT-exempt.
The 4 VAT rates in Hungary are:
A standard rate of 27%.
For central heating, bakery and dairy products, and commercial accommodation services 18%. For some goods and services such as certain pharmaceutical products, books and daily papers the rate is 5%. Some transactions such as radio, television, postal and financial services information, networking opportunities, and support are 0%.
With the following guidelines and professional advice, you will successfully export goods from Hungary to the international markets.
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