Infographic: How To Start Your Startup In Budapest

Check out the full Budapest Startup City Guide!

Hungary’s capital, Budapest, is well-known for its vibrant nightlife, mouthwatering gastro-pubs, and mysterious ruin pubs. Many of the young people filling these locations are well-educated, creative, and share a hunger for innovation. These people, coupled with relatively low wages and a thriving entrepreneurial ecosystem, should put Budapest in the crosshairs of founders looking for a place to launch their next venture. Prezi, Ustream, LogMeIn, NavNGo, Tersorit, and Antavo, just to mention a few, were not founded in this city by accident.

Budapest: The Ups & Downs

Why Budapest? Good question! First off, if you are used to Western European standards, you will realize that living expenses are relatively low, event though Hungary has the highest VAT in the world (27%). Second, the country has very high-speed internet. Budapest achieved the 6th rank globally bang-for-the-buck internet bandwidth at $1.16/mbps. As a consequence, you’ll encounter excellent 3G or 3G+ connection wherever you go, with 4G growing at a fast pace.

Apart from economical and technical upsides, Budapest is also home to a welcoming startup community, where all you need to enter is a simple “Hi!” at one of the many startup events happening in this city. Budapest’s professionals are well-educated in any field as the country itself is also known for its high level of education. Business, technology, and medicine are where universities excel.

Another major benefit is the cost of opening a one-person company – it’s for free and you’ll be able to start in a few hours at most. Additionally, while your one-person company’s income is below HUF 6,000,000 (ca. 21,000 Euro) per year all you need to pay is a fixed HUF 50,000 (ca. 170 Euro) per month of taxes.

For the downs, let’s start with the most obvious one: the political environment. At the moment it’s unclear where Hungary will go, which is worrisome due to the unpopular actions that were taken by the government. First and foremost, this situation emerged due to a funky immigration process, which is not the most fun process to go through if you want to settle in Hungary for a longer period. Prepare for a rollercoaster ride!

One downside, which has already been mentioned, is the incredibly high VAT – if you want to sell goods and services in Hungary, this is definitely something to keep in mind. And although a fixed amount of taxes is to be paid, the tax on employee wages is high. For example, the starting salary for a developer is around 700€ net, which is 1400€ in total company expenses. For a non-technical person, it’s around 500€ net.

Now that you got an overview, are you still interested in founding in Budapest? If so, check out the infographic below to find out who the key players in the city’s ecosystem are:

 

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