Hungarian Investment Promotion Agency

Further benefits in the asset-based VIP Cash Subsidy

In order to increase the attractivity of Hungary, as investment location for further high added value and innovative investments, and to enable HIPA to promote the industrialisation of Southern counties and smaller countryside locations, and to further encourage the cooperation between investors and universities , the asset-based incentive scheme has been refined.

Accordingly, minimum investment volumes required for VIP Cash Subsidy have been reduced in certain regions. Companies may now qualify for VIP cash grant with investments reaching at least EUR 2 million, depending on the location.

In respect to the above mentioned, the new eligibility condition to the investment volume will be determined accordingly:

• EUR 10 million: Győr, Székesfehérvár, Tatabánya, Kecskemét, Szombathely, Veszprém, Zalaegerszeg, Debrecen, Szeged, and Eger;
• EUR 5 million: Salgótarján, Miskolc, Nyíregyháza, Békéscsaba, Pécs, Kaposvár, Szolnok, Szekszárd, District seats of Hajdú-Bihar, Jász-Nagykun-Szolnok; Pest; Fejér; Komárom-Esztergom; Veszprém; Győr-Moson-Sopron; Vas Counties;
• EUR 3 million: Countryside locations of Hajdú-Bihar; Jász-Nagykun-Szolnok; Pest; Fejér; Komárom-Esztergom; Veszprém; Győr-Moson-Sopron; Vas Counties;
• EUR 2 million: District seats and countryside locations of Borsod-Abaúj-Zemplén; Heves; Nógrád; Szabolcs-Szatmár-Bereg; Bács-Kiskun; Békés; Csongrád-Csanád; Baranya; Somogy; Tolna and Zala Counties.

The commitment system has also been modernized to offer greater flexibility. Companies are invited to generate at least EUR 15 million in additional revenue and EUR 2 million in additional wages during the monitoring period. Beyond these, options will be offered for the companies to be selected as additional eligibility conditions—such as increasing the level of automatization and efficiency, R&D activities, university and supplier collaborations, and renewable energy usage.

Introducing a new incentive scheme for establishing R&D Centers

In order to further promote investors to establish their research and development capabilities in Hungary, a new support scheme has been launched, targeting large corporate groups and mid-sized companies with at least 50 employees.

A For the establishment of the so called research and development centers, instead of financing the operational expenses, the newly introduced VIP Cash Grant scheme enables investors to cover asset related capital expenditures, in case the investment is realised in the countryside locations, thus, enabling companies to conduct R&D activities in the future. Under this new regional investment aid, companies have to commit to create at least 10 new R&D jobs and initiate new R&D partnership with a Hungarian higher education institution. Notably, no R&D qualification is required for application.

Amendments to VIP Cash Subsidy for R&D projects

VIP Cash Subsidy for R&D projects has also become available to mid-sized companies with at least 50 employees together with the parent company. Companies that commit to file patent applications with priority claimed in Hungary may benefit from extra amount of cash subsidy.

Simplified access to Training Subsidy

Training incentive scheme is now available across Hungary to large or mid-sized enterprises employing at least 100 people, for training programs that provide added skills beyond obligatory job requirements.

A favourable amendment has been added in case of applying for training incentive since no longer requires additional investment projects or creation or expansion of Shared Service Centers to be qualified to that incentive scheme. Companies simply need to meet the threshold of EUR 250,000 in training costs and involve at least 25 participants. Additionally, the maximum duration for training projects has been extended from 24 to 36 months, further supporting the development of a highly skilled workforce. The background of this amendment is, that investment in the training of the employees represents a value that is in line with investment promotion principles. Furthermore, profit-based VIP Cash Subsidy is now available to a broader range of large enterprises.

For further information, please contact the colleagues of HIPA. The official amendment to the Decree is available in the relevant issue of the Hungarian National Gazette via the provided link.