[SINGAPORE] According to a new analysis, Singapore companies looking to expand into the European Union (EU) should consider Hungary as a gateway due to the country's talented labor, low corporate tax, and export-oriented economy.
It stated that Hungary, like Singapore, relies on foreign enterprises for 70% to 80% of its exports, which is aided in part by its 9% corporation tax rate, the lowest in the EU.
Hungary’s strategic location in Central Europe further enhances its appeal as a business hub. The country serves as a logistical bridge between Western and Eastern Europe, with well-developed transport networks, including the Danube River for freight and major highways connecting key industrial zones. This infrastructure is critical for Singaporean firms looking to distribute goods across the continent efficiently.
More than 70,000 graduates are added to the central European nation's workforce each year in industries such as construction, engineering, and manufacturing, supplementing Singapore enterprises' personnel needs, particularly those in the innovation and research-led sectors.
Mr Lennon Tan, head of the Singapore Manufacturing Federation (SMF), which contributed to the report, told that on April 4 that Hungary had a lot to offer.
Recent policy initiatives in Hungary have also made it more attractive for foreign investors. The government has introduced grants and subsidies for companies in high-tech sectors, including electric vehicle manufacturing and artificial intelligence. These incentives align with Singapore’s push for Industry 4.0 adoption, creating synergies for firms from both nations.
He mentioned its school system, which emphasizes science, technology, engineering, and mathematics, as leading to a trained labor pool that benefits tech-driven enterprises. This will make it easier for Singapore enterprises to expand their operations in the country.
"The accessibility of skilled local talent, along with the availability of competitive infrastructure, enables Singapore companies to innovate and grow without the typical financial burden of entering Western European markets," says Mr. Tan.
"While high costs can make much of Europe seem out of reach, Hungary offers a clear edge with low corporate taxes, widespread English proficiency and strong support for foreign businesses, especially in tech and research."
Beyond manufacturing, Hungary is emerging as a hub for fintech and biotechnology. Budapest’s startup ecosystem has grown rapidly, supported by co-working spaces, venture capital funding, and partnerships with EU innovation programs. Singaporean firms in these sectors could leverage Hungary’s dynamic environment to test and scale European market strategies.
Mr Tan also stated that because Hungary is an EU member, Singapore enterprises may benefit from the EU-Singapore Free Trade Agreement, which provides duty-free access to most goods, lowers non-tariff barriers, and streamlines Customs procedures.
"This helps to lower costs and enhance market access for businesses operating between Singapore and Hungary," according to him.
The report, prepared by the SMF, the Hungarian Investment Promotion Agency, the Hungarian Embassy here, and communications firm Rothman and Roman Group, stated that Hungary has always attracted investment from Asian companies, notably those in the automotive sector.
Patec Group, a Singapore-based business, specializes in metal stamping, tooling, and precision manufacturing solutions for industries such as automotive and electronics. The company established operations in Hungary in 2009 to better service its clients in the region.
Commercial director Benjamin Chia told that the company has continued to operate in Hungary "mainly" because of the low corporation tax rate.
“Hungary is also very centrally located – it is connected to seven neighbouring countries by expressways, so it’s very easy for us to transport our products to our customers in western and eastern Europe,” he said.
“A lot of university graduates in Hungary are mainly from the engineering-related faculties; they are skilled enough to adapt to our company’s manufacturing pace as well.”
Hungary’s resilience during global supply chain disruptions has also been a draw. During the pandemic, the country maintained stable production and export levels, partly due to its diversified industrial base and government-backed support for critical sectors. For Singaporean companies, this stability reduces operational risks when expanding into Europe.
Bilateral trade between Singapore and Hungary surpassed US1billion(S1billion(S1.3 billion) in 2024, while Singapore firms employ 7,000 workers in Hungary.
WhatsApp
Instagram
Threads
