Hungary occupies a strategic location at the heart of Europe. With an open and export-driven economy, the country is an attractive destination for international business. Expats doing business in Hungary will find themselves among a highly skilled and educated workforce, as well as a largely Western business culture.
As with most countries in the former Eastern Bloc, Hungary moved from a socialist economy to a market economy in the early 1990s, and it's been a member of the EU since 2004.
Hungary’s main industries include mining, construction materials, electronics, pharmaceuticals, textiles and motor vehicles. The capital, Budapest, is the commercial centre of Hungary, and many multinational companies have offices in the city, including IBM, Pfizer, Ericsson and Microsoft. The city is also a central hub of innovation and research as home to the headquarters of the European Institute of Innovation and Technology.
Business hours are usually between 9am and 5pm, Monday to Friday. It is not unusual for Hungarians to work overtime and not take a lunch break. Most Hungarians take holidays during the summer months of July and August, so it’s best to avoid scheduling important meetings during these months.
Hungarian is the official language. Although much of the younger generation has a good command of English, and it is becoming increasingly popular in business circles, the older generation primarily speaks Hungarian or German.
Hungarians take pride in their appearance, and it’s essential to dress appropriately. Formal business attire is the norm; men should wear a dark-coloured suit and tie, whereas a classic business suit is acceptable for women.
Gift-giving is not necessary in Hungarian business circles; however, if invited to a Hungarian associate’s house for a meal, then a small gift of chocolates or flowers is appropriate, but roses and lilies should be avoided. Gifts are generally opened immediately.
While there are equal opportunities for women, the majority of senior management positions are still occupied by men.
A firm handshake with direct eye contact is an acceptable greeting between Hungarian business associates. If greeting a woman, wait for her to extend her hand first. Otherwise, a nod of the head is acceptable. Hungarians address each other by their surnames first and then their first names, e.g. John Smith would be Smith John.
Business culture in Hungary
Hungary’s communist legacy means that bureaucracy is still rife in business dealings. That said, Western influences have become more prominent in business culture in Hungary in recent years, and expats should not struggle too much to get accustomed to how things are done in this Central European country.
Hungary is a largely homogenous nation, with a little under 98 percent of the population being Hungarian. The official language is Hungarian, or Magyar as it is known locally, although English and German are also both widely spoken. English is becoming increasingly popular in business circles and is now the unofficial language of business in Hungary. Although expats would do well to learn a few key phrases in Hungarian, it is a notoriously difficult language to learn.
Hungarians are generally friendly and generous hosts, and socialising is an important part of business relationships; face-to-face meetings are key. In line with this, Hungarians prefer direct communication, so vague and ambiguous language should be avoided. Meetings frequently start with small talk, as Hungarians prefer to get to know their business partners. Business relationships are vital and a lot of time is taken to build a solid foundation.
Business structures in Hungary are hierarchical and status is highly valued. Decisions are made from the top down, and senior managers don't consult their subordinates before making a decision. Decision-making can be a slow process, as Hungarians prefer to consider all aspects of a deal before taking any concrete action. Punctuality is essential, and cancelling meetings at the last minute is decidedly detrimental to any further business dealings with the company in question.
Dos and don’ts of doing business in Hungary
Do expect to socialise with Hungarian business associates. Hungarians enjoy getting to know business partners in a social setting before any business decisions are made in the boardroom.
Do address Hungarian business associates by their full titles.
Don't be late for meetings and avoid cancelling at the last minute.
Do show respect to senior managers and older associates, as hierarchy and status are key in Hungarian business circles.
Don't rush meetings and business negotiations. Hungarians prefer taking time to consider all aspects of a business deal before making an informed decision.