Continuing Swiss Investor Interest in Hungary

The most important task of the Hungarian Investment Promotion Agency (HIPA) is to provide professional assistance to foreign and Hungarian companies wishing to invest in Hungary. In 2024, with the help of HIPA, foreign investors decided to launch 77 projects in Hungary, which is estimated to bring more than EUR 10 billion in fresh capital and 18,500 new jobs to the Hungarian economy. One important source country has been Switzerland.

As HIPA CEO István Joó explains to Diplomacy&Trade, over the past decade, Switzerland has proven to be a stable and reliable investment partner, and accordingly, four major investments were decided upon last year, totaling nearly EUR 200 million. “Among these, Nestlé's development stands out in terms of volume: one of the world's largest food companies, with more than 150 years of history, is establishing a new plant and installing two new automated production lines at its Central and Eastern European pet food production center in Bük, W Hungary. An important feature of the production is that nearly half of the raw materials used come from Hungarian suppliers, and thanks to the latest announced investment, this proportion may increase further.”

Good bilateral relations
In May this year, a HIPA delegation visited Switzerland. István Joó notes that the visit, under the leadership of Minister of Foreign Affairs and Trade, Péter Szijjártó, was part of the good political cooperation between the two countries that provides an excellent basis for successful economic cooperation. “Swiss companies are synonymous with high added value and cutting-edge technology, so, in May, we held talks with the leaders of major Swiss companies and representatives of local chambers of commerce on how to attract even more investment to our country.”

Increasing investment and trade
HIPA's interest in Switzerland is not new as, for example, in November 2017, the Swiss-Hungarian Chamber of Commerce organized the 2017 Swiss Business Day in collaboration with HIPA. The theme of that event was ‘Innovation and Talent’. As to what results the development of Swiss-Hungarian economic relations has achieved in recent years, the HIPA CEO highlights that the dynamic development of relations between the two countries has been unbroken in recent years. “The number of investors from the Alpine country here has tripled over the past ten years, reaching EUR 3.7 billion. As a result, Switzerland is currently the seventh largest investor in our country and Swiss companies employ 30,000 people in Hungary. The nearly 900 Swiss companies operating here remained committed to Hungary even during the war crisis, for which we owe our gratitude and thanks to the Swiss investor community. In addition to investments, bilateral trade in goods also increased significantly: between 2017 and 2024, its value rose by nearly a third, exceeding EUR 1.9 billion last year. We are particularly pleased that Hungarian exports to Switzerland have increased by almost one and a half times during this period.”

Important partners
Regarding Swiss and Hungarian partners HIPA works with, he points out that “just a few weeks ago, in May, our most important Swiss partner, Swisscham Hungary, celebrated its 30th anniversary with a truly memorable gala evening. We greatly appreciate that, after visiting several locations outside Budapest, the Swiss Embassy launched the ‘Switzerland in Budapest’ program series in the Hungarian capital in March this year. The aim of the series of events is to showcase Switzerland's historical, cultural and economic presence in Budapest. Of course, we regularly consult with large Swiss companies in our country. We are honored that the Hungarian government's strategic partners include such leading Swiss companies as Stadler, a manufacturer of railway rolling stock; Phoenix Mecano, a manufacturer of automotive electronic components; Kühne Nagel, a logistics company; REHAU, an automotive company; and Roche, which manufactures life-saving medicines and conducts research and development activities in our country.”

Versatile Swiss presence
The Hungarian government's foreign economic strategy has focused on car manufacturing, particularly the production of electric vehicles and components. This industry is currently experiencing a temporary downturn. Fortunately, this latter development does not seem to affect Swiss investments and investment plans significantly. István Joó underlines that “the diversity of Swiss investors is reflected in the fact that, in addition to vehicle manufacturing, they are present in more than ten different sectors in Hungary, ranging from pharmaceuticals, logistics, BSC and the chemical industry to investments focusing on medical technology and renewable energy. Between 2014 and 2024, with the support of HIPA, a total of 53 positive decisions were made on projects involving Swiss companies, representing a total volume of more than HUF 560 billion. The government is providing nearly HUF 34 billion in incentive support for the projects. Approximately 4,800 jobs will be created thanks to the priority investments, and nearly 4,000 jobs have been preserved with the help of the Subsidy to Improve Competitiveness program, launched to combat the economic effects of the coronavirus pandemic, and the Factory Rescue Program, created in response to the energy crisis.

Swiss investor interest continues
In addition to the traditional presence of manufacturers, research and development aspects are also playing an increasingly important role. For instance, Novartis' Hungarian operations have also moved up a level with a new regional R&D center. The aim of the new facility is to increase the weight of the Hungarian operation, which will coordinate R&D activities and clinical research in more than 12 countries and create new highly skilled jobs in Hungary. The HIPA CEO stresses that Swiss investor interest continues in 2025. “In January this year, the first two-story aluminum carriage body manufactured in Hungary was unveiled, which was made possible by Stadler's capacity expansion investment launched in 2023. The implementation of this manufacturing technology is of great significance in the history of the Hungarian railway industry and clearly demonstrates the successes achieved by the continuously developing Szolnok plant over the past 15 years. Stadler has also decided to launch a new investment project: the development aims to introduce a special welding technology that will reduce raw material and energy consumption, and the reduction in waste and auxiliary materials will make production even more sustainable and competitive. In addition to all this, numerous Swiss investment negotiations are currently underway.”

Fine-tuned investment incentives
Looking ahead, István Joó emphasizes that with the decline in the amount of working capital seeking a place in the world and the achievement of full employment in Hungary, a completely new situation has arisen, and it is an important objective of Hungarian economic development policy to move towards even higher added value. Foreign investors with production capacities should be encouraged to bring development and research projects to Hungary after manufacturing and to collaborate with domestic universities. “To this end, we have fine-tuned our investment incentive support system and, among other things, created a new form of support for the development of rural R&D centers, which can be applied for by medium-sized or large companies employing at least 50 people. In addition, we have reduced the investment threshold from EUR 3 million to EUR 2 million in the 11 least developed counties. Based on the results achieved so far this year and the negotiations still in progress, we can confidently say that we are in a good position this year as well.”