Business as Usual (Changes in Hungary)
Coming up in this episode of Hungary’s online radio show (and podcast)… “Business as Usual (Changes in Hungary).”
In the second of a series of Budacast episodes, Uncle Drew once again speaks to Barbara Ürögdi of Helpers Hungary who tells us that doing business in Hungary is always about changes, but last year’s wave of new legislation could rock your boat.

These days in Hungary, one might feel like they’re lost in the woods given all of the legal changes, protests, and economic turmoil. Lately, Drew says it can almost be a bit overwhelming if one pays too much attention to news about Hungary.
Not to worry – Barbara has some more tips for those living and working in Hungary, to help them sift through the facts and fiction. Hopefully she addresses any concerns listeners might have about what’s been going on.
First, she speaks about the kinds of clients that Helpers has to later address some of their specific concerns.
She says the basic idea of Helpers is to provide core services: to provide business consultancy and project management; and relocation – basically for small business owners, foreigners who do work or business in Hungary.
“In this, we are quite unique on the Hungarian market,” she explains, “because the services we provide are only typically available for big businesses, through consulting companies and big relocation companies – things like financial consulting, business planning, market research, partner searches, legal and accounting advice and also practical project management.”
Barbara continues: “I think what’s important is that our core client base is made up of small- and medium-sized businesses that are owned and run by foreigners, and that’s a very niche market because they typically have to rely on consultants and the local experts to make sense of the regulations and to run their businesses, not only compliantly but also successfully. But because of the size of their business, they generally do not have the same concerns as corporations have.
“Big consulting companies and also the media and government communication tends to focus on the interests of big business, so most of the stuff that you will read in the media does not directly concern you if you’re running a small business but finding out what does and doesn’t concern you is tricky business,” she explains.
“Legislation tends to be written in Hungarian and is very very long and basically incomprehensible to anyone,” Ürögdi quips, “so you have to rely on experts. And you get some of your information from the media, but that’s pretty much your only source of information, especially if you’re a foreigner. So what we try to do is provide targeted assistance and information, specifically for small- and medium-sized businesses – that’s why we’re here having this conversation.”
Helpers Hungary has actually reacted in a very targeted way to the tidal wave of changes in Hungary in late 2011 and early 2012.
“Two things kind of coincided over the last few months,” she explains. “One of them was expected: we knew that both corporate legislation and the tax regime are going to change from 2012.”
She says that in terms of legislation, things always change in Hungary, so that was no surprise.
“Taxes change every few months; it’s very difficult to keep track, but not only that – it’s also very difficult to plan ahead, which is essential for business,” says Ürögdi in terms of doing business in Hungary. “So this is something we’ve been preparing for for a while.
“We knew that there was a proposal on the table which would be voted on just before Christmas, for example, which affected, more or less, every piece of law that has to do with owning, running or transferring a company. What we didn’t know is that there would also be a modification, which would be passed on December 30th. So then we basically spent the first week of January sifting through those modifications and trying to figure out what actually changed and what didn’t.”
According to Barbara, Helpers also knew that the tax regime was going to change.
“Most of that was public, but until something is actually set down in law, it can always change at the last minute in Hungary. So it’s been a few months of trying to figure out what’s going to happen and trying to prepare our clients for it.
“Interestingly, that has coincided with the whole political and economic turmoil that kind of happened in Hungary over the last few months – we did not plan for that. We also didn’t plan for the inflation that happened. So there’s a lot of stuff that we’ve had to do on the fly and keep in contact with both our partners and advisors to make sure that we are as thoroughly prepared as possible.
She says that at the moment there are two concrete steps that are being taken by Helpers.
“One is that we have prepared a document, which is very short – two pages – and it’s literally the most relevant bits and pieces from the new corporate law and the new tax law that are specifically interesting for small businesses.
“Just to give you an idea, the new corporate law is 300 pages and the modifications which were passed are another 300. It’s lots and lots of stuff, so nobody actually reads that. But our lawyer show specializes in assisting small businesses has provided us with 10-12 pieces of information that are directly relevant, so we’ve compiled this all in a document. It’s on our website and accessible to anyone for free, so it’s not just for our clients.”
As a follow up to that, Helpers Hungary has started a blog.
Barbara explains: “We’re going to have about 1-2 entries every week, detailing the new experiences that we have with the new legislation in Hungary, since a lot of it is currently just information but we don’t actually see how it’s going to work in practice.”
She said the blog will also include reflections on the economic and political situation in general.
Ürögdi gave one example of some information in the document compiled by Helpers.
“One of the things that affects our business directly is that the procedure for incorporating companies in Hungary has changed completely and is actually still in the process of changing. One of the services that we provide, which is pretty much at the core of our service offering is setting up companies and launching them – starting them in their operations, for foreigners.
“Until last year this was pretty much the simplest process in all of Europe, and one of the cheapest, because it was basically a ‘one-stop shop’, all filed electronically and basically in a day or two you’d end up with a company with a new VAT number and you’d be ready to go. You can open a bank account and trading the next day.”
She says now a new step has been introduced for registering companies in Hungary.
“The trade registry actually has to request a VAT number from the tax authority before actually registering the company, so technically if the tax authority does not approve of the owners or the CEOs it could reject the application and basically the trade registry would not be allowed to register the company.
“We informed our clients about this last year, because we knew that this was coming; what we didn’t know was how this was going to work out in practice. So far we have found that in the case of foreigners it’s actually quite simple, because what the authority looks for is previous tax liability, and if there isn’t any, for example in the case of a foreigner who’s never done business in Hungary, the issue of the tax number is basically automatic.”
According to her, this is one aspect that might actually disadvantage Hungarian business owners that have a long tax history in Hungary.
Barbara continues, “In the document we do outline the procedure, but we also include reflections on how this is going to affect clients’ businesses. In this case, for example, it might end up just being a formality for them – something that they should be aware of, because there is a hypothetical possibility that it could hinder the registration, but in the end it seems that in practical terms it’s not going to hurt them.
“So we’ve tried to keep it sort of practical, rather than translating the law we try to publish our experiences and kind of warn clients about realistic pitfalls and not burden them with too much legislation.
She points out that the Hungarian business environment gets a bad rap.
“It’s true that in some things it’s quite harsh. Most of the time that has to do with employment: taxes on employment including income taxes, social security, pension payments and all those are quite high. That is true, although I have to say that there are places where it’s higher and where it’s lower, but our corporate tax is one of the lowest – it’s on the same level as Cyprus, at 10%. Cyprus is well known as a tax haven. Hungarian dividend tax is at 16% which is also not so horrible.
“There are a lot of items in our tax system which are favorable and some which are not, but that’s kind of how it is to do business, you kind of make your way through the good and the bad.”
Of the Helpers document, she concludes: “In the end we kind of try to keep it realistic and focus on stuff that can actually help our clients get started and focus on their business rather than spending a lot of time working on legislation and worrying about tax laws.”
She says if one is well prepared and well informed, it’s possible to do good business in Hungary.
“I think a lot of the time people run into walls, because they don’t know what to expect in advance, and then they are shocked and surprised when their accountant tells them that they have to pay this or that thing, but technically that is something that you can plan for. And if you plan for it, if you have a solid business plan and financial plan, then you won’t have those kind of surprises.”
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0Citizenshift (Acquiring Hungarian citizenship)
In this episode of Budacast, Uncle Drew files this special report on how to become a Hungarian, i.e. how to acquire Hungarian citizenship (if you’re eligible). Drew accompanied his wife Andrea and his mother in law to the district mayor’s office in Budapest’s 12th district for the swearing in ceremony.
In connection with officially becoming a Hungarian national, Andrea provides some tips for others who hope to become Hungarian.
Andrea smiles when Drew asks her if she’s excited to become a Hungarian citizen. She says the process took her about seven months (the Hungarian government has fast-tracked the process to swear in ethnic Hungarians living outside of Hungary’s borders, like those from Transylvania, like Andrea). Things weren’t so easy for her 13 years ago, when she tried to gain Hungarian citizenship when she first moved to Hungary. “They were not interested in me,” she jokes.
Drew says she’s interesting; that’s why he married her.
Andrea says the entire process of applying for Hungarian citizenship is no longer as complicated these days. She explains that she had to submit certain documents and prove relations between herself and her relative that was born in Hungary (her mom). In other cases, it could be someone’s grandparent as well.
In the Hungarian citizenship swearing in ceremony, a district government official makes some short remarks about becoming a Magyar, before the entire crowd repeats the citizenship oath and is officially handed their citizenship certificate.
At the end everyone makes a toast to the new Hungarian citizens, who receive flowers. Egészségedre!
After a bit of organization in the ceremonial hall, the Hungarian citizenship proceedings begin. Everyone stands to sing the Hungarian national anthem and then the participants take the oath, which contains the line: “I consider Hungary my home.”
When the ceremony is finished, everyone starts milling around and clinking glasses.
Outside, Drew realizes that his wife has officially become a Hungarian citizen, so he asks her how she feels.
“I’m so proud,” says Andrea, who offers a few tips for others seeking to redeem their Hungarian citizenship.
She says, “Don’t even start the procedure if you don’t speak the language, because you will need it through the entire process, starting with the application through to the very last step, when you take the vow. That’s the most important [tip].”
Andrea adds that becoming a Hungarian citizen take a heck of a lot of patience, because the process takes a lot of time (and effort).
To get started: gather all your documents, like birth certificates and supporting documentation to prove that one of your ancestors was Hungarian.
If you need help with your citizenship request, don’t hesitate to contact Andrea Szalczer-Leifheit, who heads Expatriate Services at Helpers Hungary. She can offer you more information on Hungarian citizenship requests and even guide you through the entire process.
Stay tuned!
Uncle Drew & Andrea
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Budapest Action Figure
In this episode of Budacast, Hungary’s online radio show, we introduce you to Budapest artist Milorad Krstic and his wife Radmilla, who has become the subject of her husband’s creations. Drew visits them in their studio in a funky, old part of Budapest. The three of them speak about their gallery from the early 1990s, what inspires them in the Hungarian capital, and how Milorad began using his wife to reinterpret many of his paintings, and photographs, of Budapest.
Check out more of the Adventures of Radmilla at Milorad’s website.
Stay tuned!
Uncle Drew & Andrea
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0Biking in Buda
In this episode of Budacast, Hungary’s online radio show, we take you on a little video tour of some things you can run into biking around in Buda. Uncle Drew and Andrea head out to Nagykovacsi, find the “Nagyret” and end up stuffing their faces at one of Budapest’s most famous restaurants, Nancsi Neni. Stay tuned!
“Expatified,” Hungarian style
In this archival edition of Budacast, the hosts of Legal Alien, a now defunct English language radio show in Budapest, pummel Uncle Drew with questions about what it’s like to live as a foreigner in Hungary.
Drew says he arrived to Hungary in the fall of 1990, when he lived in a town called Szentes, which is on the Hungarian Great Plain not too far from Szeged.
He recalls that his friends planned on going to Hungary for a few months after experiencing the exotic manner of a legendary photography professor at Beloit College, Michael Simon, who was of Hungarian origin. Drew says Professor Simon was a bit eccentric, sometimes suggesting, tongue-in-cheek, that students seek psychiatric help based on the photographs they had taken.
According to Drew, Hungary was likely a very popular destination in Beloit’s study abroad program because of Michael Simon’s popularity with students.
Professor Simon had some connection to Szentes, where Drew’s friends told him they were headed. Drew says that after hearing about their impending adventure, he asked “Can I go, too?”
“Sure thing,” said his buddies, Lesley and Matt.
Drew says that before deciding to come to Hungary he felt like he was “23 going on 50.” He just wasn’t excited by the 40-hour workweek and blue business suit lifestyle in the United States. He remembers his job at a video production company in the San Francisco Bay Area as a mixed blessing.
After graduating, and not having been on an exchange program at Beloit College, Drew says he was still searching for something.
“I thought I would teach English for a few months,” he says, explaining that he spent about 9 months in Szentes before hitchhiking a whole summer with his friend Matt.
Crazy things happened to him when he arrived back in Hungary at the end of the summer to gather his things and say goodbyes before heading back to the US: he got involved with a nice Hungarian woman (surprise!), and then someone offered him a job.
“I didn’t know what I was going to do if I went back to the States,” he explains.
Over the years, Drew says, he’s stayed in Hungary for different reasons at different times.
Living out of a suitcase or really setting down roots in Hungary are things that he says he has struggled with for a long time. Over the 20 or so years, he’s lived in about a dozen different flats in different parts of Budapest, dragging that suitcase.
Despite that tenuousness, Drew says he can imagine Budapest as one of his base camps in the long term.
In that context, he adds: “I know a lot of expatriates who live here in a state of suspended animation. They are here for years and years, but still live out of a suitcase.”
After all this time, though, he suspects he’s committed to staying in Hungary.
After having lived here a few years, Drew recalls that he tried moving back to the US at the end of 1996, but it didn’t really take.
“Once you’ve lived overseas somewhere your interests change. It was tough, especially going back to the Midwest; I often think maybe if I’d gone back to the East Coast perhaps I would’ve been in more international circles, and stayed.”
Alas, that’s not the way things turned out.
“My interests just changed and I always found myself gravitating towards immigrant groups in the US; I kind of feel like an outsider there, especially in the place like where I come from.”
Drew says his hometown of Rockford, Illinois is a very blue collar town with very nice people, but there’s a caveat: “People are not really interested in the outside world, or know very little and are really not curious enough to figure it out.”
“For example, my parents own a restaurant and we have lovely waitresses. A couple of years ago, one of our waitresses said, ‘Oh yeah, Drew, I hear you’re over there in…Afghanistan.’”
He says that in much of the US, most people would not know where Hungary is.
So, what’s it like living in Hungary, according to Drew?
He says that while Budapest is such a gorgeous city, he finds most Hungarians in the capital to be joyless.
“Despite the frowns on the metro, this place is like a village,” he says of Budapest. “Over the years I’ve met so many people, and not all of them are my best friends, but I love the feeling of living in a city centre – that’s what’s missing in a lot of America; I can travel on public transportation here and literally probably see one person I’ve met over the years every single day. Maybe it’s delusional, but this really gives you the feeling that you’re connected to a place. You really feel a lot more like you belong, instead of being in the ‘hyperbaric chamber’ of your automobile, and never running into anyone.”
He says that with such a great public transport system, all kinds of people rub elbows in Budapest. Still, he thinks he’s even adopted some of the slightly sulky national character here, for example being irritated by tourists who are having a good time out in public.
“There may be something good in that,” he says of his attempted subterfuge, trying to act like a Hungarian. “I like being discrete and being an incognito expatriate. If you’re quiet, you can just kind of live your life. You don’t have to be pointed at as a foreigner.”
Drew talks a bit about why Hungarians are the way they are and their sense of schadenfreude.
“In connection with that, I have an Iraqi friend whom I’ve known here since 1991,” he explains. “He has a shop in the 9th district and whenever a customers come in, and maybe they’re frowning, he’ll just start singing and snapping his fingers. Invariably, the Hungarians crack a smile. So maybe that could be a personal mission for some people, trying to cheer people up a bit.”
Finally, Drew talks a bit about podcasting and why he started Hungary’s online radio show (and podcast), Budacast: a passion for doing radio in Budapest.
Stay tuned!
Andrea & Uncle Drew
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1Ties That Bind (or not)
In this episode of Budacast, Hungary’s online radio show, “Ties That Bind,” we talk about the difference between how close families are Central Europe compared to in the US.
We also give you the scoop about how to get your residence established in Hungary (like Drew did) when you’re married to an EU citizen (Andrea), give a mention to what happens in Hungary on St. Stephen’s Day, 20 August, and recount how a Slovenian border guard didn’t want to let Drew out of the Schengen Zone (at 4am no less!).
Be sure to contact Andrea, head of Expatriate Services at Helpers Hungary, if you need help with sorting out your work visa, residence permit or any other official permit that you may need as a foreigner in Hungary.
Happy St. Stephen’s Day, August 20th. Drew says that while in the US the July 4th holiday feels like it’s the start of the summer, Hungary’s national holiday is always a signal that the summer is ending. Andrea says it’s because school is set to start on September 1st.
Perhaps you’re an international Erasmus (exchange) student, newly arrived to Budapest and you need some help sorting things out in Budapest? Again, Andrea might be able to help you with your residence permit or anything else.
And speaking of that, as he is now married to an EU citizen, Drew (an American) just received a 5-year residence card to stay in Hungary. If you’re like him, you know that renewing these is much more frequent for US citizens (and other non EU nationalities) than it is if you’re European.
Andrea and Drew talk about some of the steps necessary to get the so-called “tartózkodási kártya.” She says that, for an American, having an EU wife is the same as having a Hungarian wife (or husband). The residence card is much better than getting a Hungarian residence permit, which is like a visa sticker that is placed in your passport, because it’s good for 5 years. (Drew’s last permit was for less than one year.)
Now Drew is waiting for his address registration card (a “lakcím kártya”), which lists your address and basic information. It will be more permanent than the white cardboard thingy he has received so many times and never shown to anyone, and should arrive in the mail.
How was your summer vacation? We just got back from Tuscany, where our goal was to taste a lot of wine. Andrea says the landscape (taj) was beautiful. Drew says he was amazed at how expensive things were in Italy and is thankful for how affordable Hungary still is. They ended their trip in Venice, a beautiful place that can charge whatever the hell it wants.
Here’s a travel alert for those taking the overnight train from Venice to Budapest like we did: Beware of evil Slovenian border guards (at least one) who don’t want to let you out of the Schengen zone at 4 am! The guy couldn’t find the stamp in my passport when I had entered Schengen, so he didn’t want to let me out. It didn’t matter that I told him I was a resident in Hungary and showed him a paper from the immigration office that I was waiting for the renewal of my residence permit.
There was no reasoning with him, but eventually he stamped my passport out of exasperation. Was he looking for a bribe?
So what’s the difference between family relationships in Central Europe versus in America?
Andrea thinks family ties are not as strong in North America and recalls when she used to work on a cruise ship and one of the American guests kicked the bucket. She says that the family members accompanying him stayed on the cruise ship after he’d died.
Drew talks about the stereotype of Hungarians not being incredibly mobile, almost never moving far away from where their families are. He admits that he’s lived on both coasts in the US and that Americans just don’t feel distances in the same way.
While Andrea worked on cruise ships for about 8 years, she says that every 6 months she would spend one month back home to be around her family. She says she can’t imagine moving to a far away place like Australia, and especially as her parents are starting to get old.
Drew says that a long-time Budacast listener recently told him that she listens to the show to give herself a taste of what it’s like to live in Budapest, which she left when she was 8 years old. For him it is just shocking that any Hungarian could stay away for so long.
Budacast listeners, let us know what you think in the comments section of this site.
Our Word of the Week is tűzijáték, which is the Hungarian word for fireworks.
And, finally, I not only promise to stop talking about the weather (which has been absolutely sweltering in Budapest), but also will try not to introduce my wife with her super duper long last name.
Stay tuned!
Uncle Drew & Andrea
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