Moving To Budapest
Budapest was once three separate cities.
Less than 200 years ago, the cities of Buda, Pest, and Óbuda merged together to form Hungary’s new capital.
Because of that, Budapest’s 23 different districts have very different histories that offer something new at every turn.
Add to this the potential that moving a business to Budapest has post-Brexit, and the city is now seen as one of the strongest cities for expat entrepreneurs.
Expats in Budapest are enjoying a cost of living that is less than half of what it costs to live in New York, and the city itself is becoming a paradise for new startup incubators and tech disruptors.
For Budapest expats, the city is a beautiful and historic European riverside city with music venues, museums, a thriving culinary scene, and galleries.
What to Expect After Relocating to Budapest
- One of the fastest growing economies in Europe with business opportunities in finance, tech, fashion, tourism, and media. Just be prepared to file a lot of paperwork as the city’s bureaucracy is regulation heavy.
- Healthcare is on par with western countries at a comparably small price. Budapest is a growing medical tourism hotspot because of this, and expats moving to Budapest can take advantage of this wonderful public system.
- Beautiful landscapes from Gothic to Baroque periods, numerous UNESCO Heritage Sites, colorful cultural experiences, and an exuberant nightlife. Moving to Budapest is to have access to varied entertainment venues like the State Opera House, numerous health spas, and bars full of character.
Why Should You Move to Budapest?
Budapest is, in a phrase, up and coming. Since the exit of the UK from the European Union, Budapest has become one of the best cities to live in, and the number one city for expats to launch a business.
Those relocating a business to Budapest will find that the city is filled with startup accelerators and funding sources.
Over 150 startups in Budapest are taking advantage of over 4,000 Budapest investment sources, and the result is that the capital of Hungary has become an expat entrepreneur’s dream.
Tech startups make up the majority, but manufacturing startups are also growing due to Budapest’s location and amazing travel amenities that link it to all of Hungary and the rest of Europe.
Add to this the corporate income tax rate of just 9% – one of the lowest in Europe – and moving to Budapest from the U.S. or other countries starts to make a lot of sense for the expat entrepreneur.
The government has also cited plans to lower banking taxes, increase the budget to help small and medium-sized enterprise (SME) funding, and allocate around 60% of EU funding to supporting private businesses and company formation.
Whether you are relocating a business to Budapest or simply want to move to Budapest, the capital of Hungary has a lot to offer expats. It should be on the radar of anyone looking to try living in Europe.
- Tax & Accounting
- Relocation & Shipping
- Visa & Immigration
- Property & Real Estate
- Language & Culture
- Health & Wellness
Everyone in Budapest pays income tax.
This includes Hungarian nationals, expats moving business to Budapest, and digital nomad expats in Budapest working for themselves. Hungarian tax laws offer tax exemptions and tax relief programs, but they are regulated by special rules that may be confusing for those moving to Budapest from other countries.
Budapest expats living permanently in the city must pay taxes on their worldwide income, while those living in the city for less than 183 days have to pay taxes on income earned in Hungary.
Taxable income is defined by the Hungarian National Tax and Customs Administration as:
- Salaries and bonuses
- Cost of living and housing allowances
- Home leave
- Life insurance contributions
- Pension
- Stock options
- Company car or other company provisions
The income tax rate is flat a 15% of a person’s income in Hungary.
Budapest expats or Hungarian nationals employed by a Hungarian company can expect the company to deduct income tax and social contributions from their salary.
They must only file a tax return if they earn income from sources other than the company or if they are employed at two different employers. The tax return filing date is due by May 20 of each year.
Check our Budapest Group Leader Budapest Consultants, a leading accounting business and fiscal advisor in Hungary whose experts will assist you in managing your financial matters in Budapest and provide you with the best possible assistance. As our another Group-Leader in Budapest, KCG Partners Law Firm provides services to expats moving to Budapest, such as business law, litigation and tax advice, with market-leading practices in employee stock ownership plans (ESOP), industrial property development, employment, taxation and regulatory affairs.
Those moving to Budapest will likely want to bring their belongings with them, and doing so on a passenger flight may not be possible.
Relocation services exist to help with the move to Budapest.
Generally, air freight is more expensive but more expedient, while sea freight is slower, but more cost effective, especially for heavy items.
When relocating business to Budapest or relocating to Budapest with your family, it is worth bringing your items with you as resupplying in Hungary will likely cost more than relocation. Find out how Expatland E-Team members in Budapest can assist expats moving their businesses to Budapest in our recorded webinar, Opportunity To Grow Your Business In Budapest.
Hungary is part of the Schengen area, meaning people with EU passports do not need to apply for a visa.
Those who are moving to Budapest and are applying for a Schengen Visa must gather the required documents, complete visa applications, and submit these documents to the Hungarian consulate in their home country.
Residence permits in Hungary are required for expats expecting to stay longer than 90 days.
After five years, long-term residence permits are available.
Expats with residence permits should also apply for a tax card, social security card, and a work permit if they intend to work in Hungary.
Budapest is divided into 23 districts from the three different cities that make up the capital. Prices in Budapest are surging with the new influx of expats moving business to Budapest.
Before moving to Budapest, be aware that the average price in 2022 was around $3,600 per square meter and represented the highest real estate price in the country. The different districts vary quite widely with prices of $2100 per square meter on the lower end and $6,500 on the high end.
Rent, on the other hand, is quite affordable. The average rent for a one bedroom apartment in Budapest was $437 USD (as of mid 2022) though it can rise to around $700 per month for two bedroom apartments.
While rent is affordable compared to other large cities, utilities in Budapest are notoriously expensive, so calculate this into your budget before relocating to Budapest.
The official and most common language in Budapest is Magyar (Hungarian), tough both German and English are widely spoken by the older and younger generations, respectively.
Handshaking is the customary greeting and you should introduce yourself with both your first and last name. When you move to Budapest, be aware that gifts such as quality wine, flowers, or chocolate are acceptable as thanks for invitations to get-togethers or meals.
Smoking is popular but is banned in public buildings and transport.
Both sides of the capital (Buda and Pest) should be enjoyed as they offer widely different experiences. Nightlife is vibrant, and festivals with cultural dances and celebrations dating back to the medieval period should not be missed.
Budapest has numerous spas, sulfur baths, and saunas that are said to have strong health benefits and a great healthcare system at an affordable price for expats moving to Budapest as well.
It covers nearly 100% of the population, and if you move to Budapest with your family and work for a local company, you can take advantage of the system.
Private health care also exists and is very affordable, making the city a top medical tourist destination for expats moving to Budapest from over the globe.
Frequently Asked Question
- Is Budapest Good for Business?
Budapest is a hotspot for new businesses as the government offers lots of support for growing businesses. Tech and manufacturing startups are moving to Budapest in droves, and, as a result, real estate prices in Budapest are surging. Now is the time to move to Budapest if you enjoy peaceful riverside cities and a geographical location that gives you access to the rest of Hungary and Europe.
- How Do I Get a Visa for Budapest?
EU, EAA, and several other large western countries do not need a visa for the first 90 days in Budapest, while other countries must apply for a Schengen Visa at their local Hungarian consulate. Those staying longer than 90 days should apply for residency and work permits if they moved to Budapest and intended to work in Hungary.
- Can a Foreigner Start a Business in Hungary?
Foreigners can start businesses in Hungary for a low corporate tax rate of only 9%. Many are already taking advantage of these benefits, with both tech and manufacturing startups surging to the city. Incubators and investors are also flocking to the city in search of the next big company.
- Is Budapest a Tech Hub?
Budapest is one of the fastest growing tech hubs in Europe because of the low corporate tax rates, large number of startup incubators, and strong investment community. Budapest is one of the best places to start a new tech company in Europe post-Brexit or to relocate your business to.
- Is Budapest a Good Place for Expats?
Yes, it’s one of the best places for expats to move to in Europe.
If you relocate to Budapest with your family, you should expect a cost of living that is less than half as expensive as New York with a great public transit system, affordable public or private healthcare, and affordable real estate and rentals.