Starting a company in Hungary is as easy as it can get, with the 4-5-day registration and the instant EU VAT number that makes international trading possible even from day one, as soon as you open your company bank account. But how to make your company a success in a foreign business environment? Of course, a solid business plan will come in handy – but knowing the market does not only include the trends and niches, but also an understanding of the business culture that lets you build lasting business relationships.
Build lasting business relationships
In Hungarian business life, personal relationships are crucial to build trust. Face-to-face discussions are essential, which might mean multiple visits or phone calls. Being transparent and visible can add to your credibility, so maintaining an up-to-date LinkedIn page for your company and for yourself, and/or having a company website where the managers are also listed, with their photos included, will add to that effect. When you decide on company formation in Hungary, having a local partner who can introduce you to potential business partners is also a great way to establish trust.
Hungarians tend to be formal in business situations, especially at the beginning of a business relationship. Great importance is attached to organizational structures and hierarchy. Expressing respect towards your business partner and their whole organization is essential. Respectful behavior includes arriving to meetings on time (in fact, 5-10 minutes early is encouraged), and wearing appropriately formal attire (dark suit and white shirt, closed shoes; being a bit overdressed is preferable to being underdressed).
Break through cultural barriers
At the same time, Hungarians tend to be outspoken, and prefer direct communication to hedging. While first meetings will most probably be quite reserved, once the ice is broken, your potential partners will usually express their expectations in a more direct fashion and rarely mitigate controversial statements, which might make them come across as rude or abrupt. However, do not let this general communication style discourage you. Hungarians are open to negotiation and you will most probably reach a reasonable compromise.
Make sure you do not let cultural barriers hinder your business relationships. Treat your business partners with respect and focus on the goals you want to reach. A strong handshake and steady eye-contact will set you on the right track. (Bowing is not customary.) When going out for a business meal, avoid discussing politics. If you go to a traditional restaurant, probably at least 3 courses will be served (soup or some other starter, main course, dessert), and waiters are usually tipped around 10%, unless a “service fee” is included in the price of the meal. And in the long run, your outspoken or “rude” Hungarian business partner might become a reliable friend of yours.
Work with the right employees
Your success will greatly depend on the people you work with. This is true not only for your business partners but also your employees. When selecting employees for your new Hungarian business, besides their experience and expertise, it is essential that their values and goals also match those of your company. Several headhunter agencies will readily assist you find the best candidates, or you can look for a partner that also helps you formulate the positions according to the needs of your Hungarian company, set a reasonable salary range, and even screen candidates, and even obtain the residence permit in Hungary for them. Depending on their origins, some of your employees might even be eligible for Hungarian citizenship by ancestry.
If you already have a company in your country of origin and you have trusted expert employees who are willing to transfer to Hungary, it might be an excellent decision to work with colleagues you already know. Moreover, a skilled workforce is always welcome in Hungary. For moving your existing employees to Hungary, you will need to learn how to obtain Hungarian work permit for them. Please note that there are different work permit procedures in Hungary based on where your employee is coming from (EU or non-EU, that is, a “third-country”) and who the employer will be (the Hungarian company or the related foreign company). Getting a Hungarian work permit may take up to 70 days after submitting the application, which you should keep in mind when planning your operation. The permit will be valid for 2 years, and can be extended to the closest family members of your foreign employee.
As you can see, succeeding as a foreigner in the Hungarian business is not that hard, provided that you follow certain rules, meet the right people and know the local business etiquette. If you satisfy these conditions, coming to Hungary to do business might easily prove to be a lucrative venture.
