SHARED SERVICES CENTRES HUNGARY - HIPA · PDF fileshared services centres in hungary labour force ... czech romania poland slovenia republic ... ito emea tps, hewlett packard h unay

SHARED SERVICES CENTRES

HUNGARYIN

OPENING DOORSFOR YOUR INVESTMENT

ABOUT HUNGARY

SHARED SERVICES CENTRESIN HUNGARY

LABOUR FORCE

LANGUAGES

LOCATION

QUALITY OF LIFE

HUNGARIAN INVESTMENTPROMOTION AGENCY (HIPA)

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Published by the Hungarian Investment Promotion Agency, HIPA

All rights reserved © HIPA, 2016www.hipa.hu

ROMANIA POLAND SLOVENIACZECHREPUBLIC

SLOVAKIAHUNGARY

Inward FDI stock amounted to 78% of GDP (at the end of 2014), the highest ratio in the region.

Source: wiiw FDI Database

78%

65% 57%

41% 40%

27%

HUNGARY

ABOUT HUNGARYMAIN FIGURES

(Source: *HCSO = Hungarian Central Statistical Office)

CURRENCYFORINT

(HUF)

GDP (PPP)€ 183,989 MILLION

(2014)

UNEMPLOYMENTRATE6.8 %

(2015, HCSO)

INFLATION-0.1%

(2015, HCSO*)

MEMBERSHIP IN INTERNATIONAL ORGANISATIONS

EU, UN, OECD, WTO, NATO, IMF, ECEU member: since 2004

CLIMATETEMPERATE

(similar to the rest of the continental zone)

RISK OF NATURALDISASTERSVERY LOW

FORM OF GOVERMENT

PARLIAMENTARY REPUBLIC

AREA

93,030 km2TIME ZONE

GMT + 1 HOUR

OTHER MAJOR CITIES

Debrecen (203,506)Szeged (162,593)Miskolc (159,554)Pécs (145,985)Győr (129,372)

CAPITALBUDAPEST

1,757,618(as of January 2015)

POPULATION

9,855,571(as of January 2015)

Shared Services Centres in Hungary 7

ABOUT HUNGARYBUSINESS ENVIRONMENT

“We have recently started collaborating with HIPA on a serious HP project. The high quality of the pres-entations available on the website, both content and perspicuity-wise, must not go without mention, in addition to the continuous availability of HIPA col-leagues and their fast communication/reaction. Accurate and straightforward information is indis-pensable when making global decisions regard-ing the economic situation and support system of a given country. Based on our preliminary impres-sions, with your help, we can prepare a strong and effective material for the American leadership of HP.”

Attila Kapitány3rd Party Lead EMEAITO EMEA TPS, Hewlett Packard

Hungary is an open economy where particu-lar emphasis is placed on encouraging foreign investment. Partnership with potential investors

is a national priority; special attention is paid to the needs of companies already settled in Hungary, and to the further improvement of the business climate.


YOU CAN COUNT ON THE GOVERNMENT’S COMMITMENT TO FURTHER IMPROVE THE BUSINESS CLIMATE

IN ORDERTO IMPROVE THE

BUSINESS CLIMATE, THE HUNGARIAN GOVERNMENT…

INV

ESTM

ENTS

IN F

OCU

S

…created one of the most competitive FLEXIBLE LABOUR

CODEs in Europe(in favour of employers).

…has reduced the CORPORATE TAX RATE

to the lowest level in the CEE region.

…has introduceda FOREIGN-TRADE

FOCUSED foreign policyto attract FDI.

…has doubled the amount of

financial support forR&D ACTIVITIES in the 2016-2020

period.

…has reduced the PERSONAL

INCOME TAX

to 15%.

…introduced a new act on a practice based DUAL TRAINING

in favour of business needs.

…has entered intoSTRATEGIC PARTNERSHIP

AGREEMENTSwith numerous companies,

giving fast access to the government via workshops and regular consultations.

ABOUT HUNGARYBUSINESS ENVIRONMENT


Many companies have chosen to offshore, or rather nearshore, finance, accounting, human resources, customer service, and

IT to Hungary because of the technological skills and business knowledge of the local workforce; the expe-riences of these firms are extraordinarily positive.The first regional service centres appeared inHungary in the 1990s. To date, more than 90 compa-nies have established more than 100 operating SSC sites here, employing some 40,000 people, mostly young professionals speaking multiple languages.

Francisco FarrásManaging DirectorBusiness Support CentreAvis Budget Group

"The continuous growth of the centre reflects the Group's unwavering confidence in the shared services model. Over time, we’ve added new and value-added services to the Business Support Centre in Budapest to the extent that we’re now the largest Avis Budget Group site in the world by headcount. We employ talented, well-educated colleagues from more than 30 countries and their excellent linguistic skills ensure we operate effectively in 10 languages. From these strong foundations we are well set up to continuously improve the quality and efficiency of our services and make a significant contribution to the Group’s success in the long term."

SSCs IN HUNGARY


Typically, SSCs are set up with relatively low registered capital. Companies gradually build up and expand their operations with new, high

value-added activities. The workforce comprises mainly of fresh graduates and speakers of foreign languages, and the sector has created hundreds of new jobs. Companies establish an SSC in Hungary to serve their own subsidiaries or to provide outsourced services for other companies. Most Hungary-based regional SSCs are involved in finance, accounting, HR, ICT and other back-office activities.

In addition to these, early positive experiences have led to the emergence of so-called centres of excel-lence in recent years. Beside conducting simple trans-actions, these centres carry out more complex activi-ties with higher added value. Such functions include corporate finance, credit management and control.

SSCs IN HUNGARY


"Europe is home to the global headquarters of many of GE's industrial businesses like Oil & Gas, Renewables, etc. and when we decided to create a shared services organization within the company, we chose Hungary as one of the five global locations for establishing our Global Operations Center. Today there is a diverse multicultural team of 1.500+ at the Center. GE has over 25 years of history in Hungary.We employ more than 10,000 people, and have strong experience in developing centers of excellence and shared services in the country. The availability of skilled workforce with good language skills, mature shared services presence in the market, developed infrastructure, central location and time-zone – all of that within the European Union and in a stable economic environment were some of the parameters in favor of our choice.”

JOERG BAUERPresident, GE Hungary

* Source: HIPA Database, April, 2016

EATONMYLANUNICEF

19971998

200320042001 2005 20071991 1992 1999 2006 2008 2010 2012 20142011 2013 2015

IBMTRANSCOM ALCOA

DIAGEO E-SENSE

TATA

BUWCITIGROUP

BT BUDAPEST BANK

CELANESE COGNIZANT

FAO LEXMARK

NOKIA VODAFONE

HP

ACCENTURE

SSCS IN HUNGARY WITH MORE THAN

EMPLOYEES*

SYKES

AVIS EXXON MOBIL

IBM

IT SERVICES KLM

MORGAN STANLEY NALCO

PHOTEL ROCHE UNISYS

SAPAUNHCR

ACELITYESAB

GRUNDFOSMERLIN

CELERGO RAIFFEISENTETRAPAK

EMIRATESCOMPUTACENTER

GE

BPAGCO

AIGDEALOGIC

DHL

HELLMANNRANDSTAD SYSTEMAX TELENOR

150

2009

SSCs IN HUNGARY


SSC IN HUNGARYLABOUR

Four universities in Hungary appear in the respected QS World University Rankings (which claim to be the most widely read university comparison of the world’s top 800 universities).

ACADEMIC YEAR

2014/2015

NO. OF INSTITUTIONS

67

Undergraduates (BA/BSc) and Postgraduates (MA/MSc)

271,480 of which 203,576

are fulltime

Source: HCSO

TERTIARY EDUCATION IN HUNGARY

"In 2008, when establishing our captive, near-shore Competence Center in Budapest, Lexmark was after highly skilled, language-speaking labor force. We obviously did not regret coming to Hungary: so far staff grew every single year, and instead of simple transactional activities the Hungarian center is delivering high value-added, word-class services that were previously thought to be not even feasible in an SSC environment.The premium quality and diversity of services we offer today on EMEA and WW level would not have been possible without a mature job market providing highly educated people, who speak several languages and already have relevant experience (our 350+ employees have 120 different job descriptions!). Hungary is a great place to start an SSC!"

Péter CsucskaGeneral Manager, Budapest Competence Center

LABOUR FORCEYOU CAN RELY ON GLOBALLY ACKNOWLEDGEDHUMAN CAPITAL AT A REASONABLE COST


“Nokia has a strong presence in Hungary with over 1900 employees including our Financial Shared Services team. Additionally to good infrastructure and closeness to our headquarters well-educated talent pool speaking European languages was one of the reasons why Nokia selected Budapest to provide shared services more than a decade ago.”

Patricia IszakHead of Financial Shared ServicesRecord to Report

Regarding our talent pool, 271,480 students were enrolled in 67 institutions of higher education in the 2014/2015 academic year.

Business and Law students are the largest single group, numbering 100,482 in 2014 but Technical education and IT are also popular faculties.

The HOA was established by leading Hungarian and multinational companies in 2005 to promote and support activities in the service sector. The Association welcomes all companies involved in service and outsourcing activities. HOA provides valuable information to the entire Hungarian business community, and offers the following services to its members:• Information network promoting the benefits and positive impact of outsourcing• A forum for members to discuss service sector and outsourcing related issues and common problems (best practices, techniques, market developments, etc.)• Collection & distribution of market information• Maintaining contacts with foreign purchasing and outsourcing organizations• Intensive Hungarian Government lobbying activities to improve the legal and administrative environment for outsourcing and services (labour code, taxation, etc.)

THE HUNGARIAN SERVICE AND OUTSOURCING ASSOCIATION

(HOA)

LABOUR FORCE


According to SSC employers Hungarian graduates are motivated, loyal, and talented individuals with consid-erable problem solving skills.

In the last academic year, over 52,000 students learnt 33 different foreign languages in 67 universities or colleges. The most common are English, German, French, Spanish, and Russian, but more exotic lan-guages such as Swedish, Norwegian, Finnish, Dutch, Japanese, Chinese, Portuguese, and Arabic are also taught. All tertiary education degrees include a foreign language certificate and computer skills.

High Level language skills are indispensable for successful SSCs and BPOs. Young Hungarians understand, that in order to get ahead in today’s

Europe, linguistic skills are essential.

In 2013/2014 more than 552,589 Hungarian primary school students and 528,273 secondary school students were learning foreign languages, mostly English and German. Hungary has approximately 200 bilingual primary and secondary educational institutions, where 37,000 young Hungarians study in English, German, French, Italian, Spanish, Russian, Chinese, and Hebrew.

Since Hungary’s entry into the EU, there has been a growing number of native language speakers at our universities, and an increasing number of Hungar-ians study abroad. Since 1997, Hungary has been part of Erasmus, the EU’s largest and most successful mobility program. Hungary is also an active partici-pant in the Life Long Learning program, which helps to provide international internships for students.

PART OF ERASMUS INTERNATIONAL STUDY PROGRAM

200

BILINGUAL PRIMARY & SECONDARY EDUCATIONAL INSTITUTIONS

ABOVE THE MOST COMMON EUROPEAN LANGUAGES EXOTIC LANGUAGES (SUCH AS

SWEDISH, NORWEGIAN, FINNISH, DUTCH, JAPANESE, CHINESE, PORTUGUESE AND ARABIC)

ARE ALSO AVAILABLE.

LANGUAGES


YOU CAN MAKE THE MOST OF THE COUNTRY’S STRATEGIC LOCATION: EASY ACCESS TO BOTH WESTERN AND EASTERN EUROPEAN COUNTRIES FROM THE HEART OF THE CONTINENT

Hungary is within two hours by air from most major European capitals, and provides a key link between Europe

and the rapidly expanding markets of the East. The 6 hour time difference from New York and the 7 hour time difference from Tokyo enable SSCs to provide services to the East and West simultaneously.

AN EXCELLENT LOCATION FOR YOUR SHARED SERVICES CENTRE

OPEN TO THE EAST: EMIRATESIn March 2014, Emirates Airlines announced a new contact centre in Budapest with a full time staff of 300. Hungary-based SSCs typically serve European and US parent firms, and it is hoped that the Emirates’ commitment encourages more Eastern companies to set up operations in Hungary.

-6 HOURS +7 HOURS

Karen Bell-Wright Senior Vice PresidentEmirates

ca.120 min

ca.60 min

NEW YORK BUDAPEST TOKYO

LOCATION

“We searched extensively across Europe to find the right location for this facility and Budapest ticked all the right boxes for us. The support from the Hungarian Investment and Trade Agency has been incredibly valuable in bringing this project to fruition. Budapest offers us a population base with the right mix of languages and skill sets, as well as strong telecommunications infrastructure. Hungary is an attractive investment location for global business with a supportive and progressive government and we look forward to developing this relationship.”


Sou

rce:

CB

RE

Res

earc

h

0

10

20

BUDA

PEST

14

BU

CHA

RES

T

PR

AG

UE

WA

RSA

W

30

40

(€/m2/month)

(CA.) 395,800 m2

TOTAL OFFICE SPACE AVAILABLEFOR COMPETITIVE RENTAL PRICE

HUNGARY HAS ONE OF THE LOWEST RENTAL PRICES

IN CATEGORY A.

SSC IN HUNGARYLOCATION

"Over the years, Hungary became a strategic location for TCS. Our first Delivery Centre outside India was established in Budapest, due to multiple reasons: cultural and geographical proximity to almost all European countries, growing economy, favourable investment climate. Last but not the least, Hungary and the region is a treasure-house of technically qualified and highly skilled professionals with foreign language capability."

According to CBRE's database, Hungary has one of the lowest rental prices in Category A. (EUR 14/m2/month) in the region.

In terms of offices, there is over 3.28 million m2. of modern office space in the Hungarian capital, making Budapest the second largest office market

in Europe.

Until very recently, the city was dotted with construc-tion sites; some 172,100 m2 ofice space was built in the last four years. Consequently, compared to many Western European cities, the capital’s office stock is relatively new. In terms of quality, Budapest does not differ greatly from its Western European peers as most buildings were constructed to internationally accepted German and US standards.

Potential tenants have considerable opportunities, with 395,800 m2 - 12.1% (2015 Q4) of the total office space – currently available. Assuming a requirement of 1,000 sq. m. (for a business of 100-120 people), there are over 100 suitable buildings. Cost-conscious solutions in newly built properties, as well as effective lay-outs and close-to-city locations are particularly popular with SSCs.

Prabal Datta, General Manager Delivery Center HeadTCS

LOCATION


YOU CAN COUNT ON THE QUALITY LABOURFORCE ACROSS HUNGARY

EXPLORE THE COUNTRYSIDE

“In 1997, IBM established one of its eleven strategic international service centres in Székesfehérvár, based on the good-quality workforce and great infrastructure.We are working closely with local universities from the region, such as University Óbuda (Software Engineering BSC). Existing IBM programs, such as the dual training program, support the development of new curriculum; while also developing and retaining skilled Hungarian workforce. Through its own Education Centre, also located in Székesfehérvár, IBM is focused on internal education to ensure competitiveness of its employees.”

As for the emerging tier two cities, after two decades of experience, Hungary is considered a mature and effective location for

SSCs. Whilst the majority are located in Budapest, more and more companies are looking to larger towns with universities. Outside the capital, the most popular locations are: Pécs, Székesfehérvár, Szeged, Miskolc, Debrecen, Nyíregyháza.

Apart from abundant and skilled labour force, choosing a tier two city could potentially mean more government incentives as well.

Zoltán ZerényiExecutive, IBM Client Innovation CentreSzékesfehérvár & Budapest

DEBRECENBT, IT ServicesNational Instruments

SZEGEDIT ServicesProvident

MISKOLCVodafoneUnited Call Centers

NYÍREGYHÁZALego, Raiffaisen

PÉCSBUW, Hellmann

IT Services, Unisys

SZÉKESFEHÉRVÁR Alcoa, Harman, IBM

LOCATION


INTERNATIONAL SCHOOLSExpatriates looking to stick with the curricula of their home countries can choose from a range of private international schools for their children. There are also many English, German or French public and private pre-schools for children aged from three to six. The school year starts in September and ends in June, and school buses are usually available at private schools. There are many opportunities to study in a foreign language at universities too.

EXPLORE THE COUNTRYSIDEHungary’s diverse countryside offers a wide range of outdoor activities: 11,000 kilometres of hiking routes; more than 2,500 kilometres of cycle paths; 17 golf courses; ten national parks; and many protected nature reserves for those in love with fresh air. The protected Puszta-region, the Great Plain, the romantic Danube Bend with its historic sites, and pretty baroque towns, such as Eger, attract visitors all over the year. Lake Balaton, the largest fresh water lake in Central Europe, is a perfect holiday resort.

EXPATS LIKE HUNGARYBudapest is a city full of surprises and wonders, with its lively centre, pretty parks, majestic river, tall church spires, and lavish spas. One of the most exciting cities in the world, Budapest is full of secrets, hidden spots to explore, and old favourites to revisit. This is the city where being bored is not an option. According to TripAdvisor, Budapest is offer-ing the best price-value ratio in the world.According to Condé Nast Traveler readers, Budapest is the second best city on earth.

QUALITY OF LIFE

2.BUDAPEST

IS THE

BEST CITYON EARTH

(Condé Nast Traveler,2015)


WE CAN PROVIDE PROFESSIONAL ASSISTANCE

The Hungarian Investment Promotion Agency (HIPA) is a national investment promotion organisation governed by

the Ministry of Foreign Affairs and Trade. It provides professional consulting services to interested companies free of charge in a one-stop-shop service model, support-ing them in selecting a business location, providing tailor-made incentive offers and information on state subsidy issues, iden-tifying investment possibilities and dealing with public authorities.

HIPA operates in close cooperation with diplomats abroad promoting foreign trade activities, helping to

strengthen Hungary’s foreign trade relations at 111 local representations in 76 countries.

You can find the detailed contact list on www.hipa.hu.

HUNGARIAN INVESTMENT PROMOTION AGENCY (HIPA)

111LOCAL

REPRESENTATIONS

76COUNTRIES

HUNGARIAN INVESTMENT PROMOTION AGENCY


BEFORE YOU MAKE A DECISION

WE OFFER YOU…

AFTER YOU HAVE CHOSEN

HUNGARY

PLEASE CONTACT US

HIPAPROFESSIONAL ASSISTANCE

Address: 1055 Budapest, Honvéd utca 20. Customer service: [email protected]

Telephone: +36 1 872 6520Web: www.hipa.hu

We support your further expansion

and plans.

…meetings with HR & real estate agencies,

law firms and other consultants

based on your needs.

…tailor-made incentive offers and information

packages on the business environment,

labour market, tax regulations, etc.

…reference visits at companies that are

already established in Hungary.

… location search & evaluation

+site visits.

…assistance with your incentive

application.

HOW DO WE SUPPORT YOURSSC PROJECT?

…one-stop-shop management

consultancy servicesto address your business needs.

We are open to your feedback and offer mediation

between government and business based

on your inputs.


The maximum available aid intensity decreases if the investment is a large investment (exceeding €50 million): 50% of the maximum aid intensity determined in the regional aid map is available for investment between €50 and €100 million, with 34% of the maximum aid intensity for investment over €100 million.For information on up-to-date and individual incentive packages please contact HIPA directly.

Regional grants are the most typical forms of incentives for greenfield / brownfield investments or reinvestments. The maximum amount of regional incentive is shown on the regional aid intensity map. The map above illustrates that regional aid available for investment for a large enterprise may be up to 50% of the eligible costs of the investment, depending on the region. For investments not exceeding €50 million, the maximum intensity ratio can be increased by 10 percent for medium-sized and by 20 percent for small enterprises.

As a member of the European Union, Hungary’s regulations on incentive opportunities are in accordance with the EU rules. One

of Hungary’s competitive advantages over other countries in the region is the Government’s strong commitment to increase the competitiveness of SMEs and large enterprises in Hungary.Alongside the regulatory tools that contribute to the competitive business environment of local companies, Hungary offers wide-ranging incentives to facilitate foreign direct investments and reinvestments by local enterprises. Subsidies may be granted as regional aid or specific aid, such as R&D subsidies.

GOVERNMENT INCENTIVES

SOUTHERNTRANSDANUBIA

CENTRALTRANSDANUBIA

WESTERNTRANS-

DANUBIASOUTHERN

GREAT PLAIN

CENTRAL HUNGARY, Budapest

NORTHERNGREAT PLAIN

NORTHERNHUNGARY

Pécs

Szeged

Debrecen

Miskolc

Győr

Székesfehérvár

25%

35%

0 / 20 / 35%

50%

VIP Cash Grant may be available in case of creating 50 new jobs.50

CASH SUBSIDIESfor investments,

training, job creation

and R&D

TAX INCENTIVESreduction of

corporate tax, social tax, or for

encouraging R&D activities

LOW-INTEREST LOANS

SPECIAL INCENTIVES

of the free enterprise zones

THESE INCENTIVES INCLUDE, BUT ARE NOT LIMITED TO


HIPAINCENTIVES OVERVIEW

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SHARED SERVICES CENTRES HUNGARY - HIPA · PDF fileshared services centres in hungary labour force ... czech romania poland slovenia republic ... ito emea tps, hewlett packard h unay