There Are Fewer and Fewer Firms in Hungary

The decline in the number of firms continued in March, with nearly 5,000 fewer firms registered in Hungary than in December last year, and 30% fewer firms formed than closed in the same period. This means that the trend of declining company formation and more frequent company closures continues, the economic portal Piacesprofit.hu reports.

Seasonally, it is the highest number of closures this year – 3,699 – compared with March in previous years, 26% above the average of the past six years, while the number of new business start-ups was below the average of the past six years.

In March, the number of proceedings initiated was around 11,000, affecting more than 2% of firms.

This number of procedures has typically been higher in cases reflecting the results of some measure over the last five years (e.g. the abolition of the moratorium or the popular small business KATA law).

The majority of proceedings, 60%, are enforcement proceedings, but the number of liquidation proceedings is also outstanding, exceeding the 2,000 level. Looking back over the past six years, there is nothing remotely similar to the March figure.

This is four to five times the average number of winding-up proceedings in recent years, even taking into account the pre-pandemic era. March is the seventh consecutive month in which liquidation proceedings have exceeded the 1,000 mark.