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"Hungary: the Profitable Way Into Europe"
(Program Information)
A presentation by
Robert C. Knuepfer, Jr.
Baker & McKenzie
(former managing partner of the Budapest office)
November 17, 2004
World Trade Center of New Orleans
U.S. Investment Opportunities in Hungary – An American
Perspective
Hungary: The Choice for U.S. Investment
- Central Geographic Location
- History of East/West Trade – COMECON
- Political Stability after Berlin Wall
- Privatization Model a Success
- Economic Stability
- Legal Stability
- Infrastructure Improvements
- Regional Headquarters Location for EU
Leader in Attracting U.S. Investment
- U.S. Companies are leading foreign investor in Hungary with more than $40
billion invested to date, representing nearly 1/3 of all foreign investment in
Hungary.
- Investments in all sectors of economy including manufacturing, finance,
technology, telecommunications, real estate, energy, transportation, trade,
and construction.
Leader in Attracting U.S. Investment
- Examples of Brownfield Investors:
- General Electric – Tungsram
- Pepsi – Beverage and Bottling Operations
- SBC Ameritech – Matav Telephone
- Alcoa – Kofem Aluminum Operations
- Sara Lee – Food and Apparel Operations
Leader in Attracting U.S. Investment
- Examples of Greenfield Investors
- Automotive – General Motors (Opel), Ford (Electronics), NABI
(Busses), Lear, ITT
- Technology – IBM, Hewlett Packard, Compac, Tyco
- Food Processing – Kraft, Sara Lee
- Electronics – Ford, Delphi, Packard, Flextronics
Reasons Hungary is Attractive to U.S. Investors
- Superior Labor Force
- Low Cost of Wages
- Highly Productive Employees
- Highly Educated/Trainable Work Force
- High Level of Technical Skills
Reasons Hungary is Attractive to U.S. Investors
- Low Tax Rates and Incentives
- The 16% Corporate Tax Rate one of Lowest in Europe
- Tax Incentives for Foreign Investment (R & D, Training, Employment
Programs)
Reasons Hungary is Attractive to U.S. Investors
- Hungary Now a Member of EU
- Access to European Market of 450 million consumers as of
5/1/04
- Uniform EU Rules and Regulations (Product Certifications, Labelling, etc.)
- Reduction of Tariffs to 4%
- Most Efficient Low-Cost Producer in EU
Reasons Hungary is Attractive to U.S. Investors
- Substantial U.S. investment to date will encourage further investment (i.e.
second and third tier suppliers)
- Additional Privatization Opportunities Available
- Priority Sectors (R & D, Energy, Environmental, Technology, Logistics
and Regional Centers)
Practical Tips for Investors
- Engage Advisors Early (Financial, Legal, Accounting)
- Importance of Due Diligence (GE, Alcoa)
- Patience and Persistence
- Cultural Sensitivity (Pepsi)
- Realistic Expectations (GM)
Practical Tips for Investors
- Examples of Successful Investments
- GM, GE and others
- The Next Wave: Small and Medium Sized Companies
- Suppliers to Existing Investors
- Low-Cost Manufacturing Opportunities
- Regional Distribution Centers
- R & D Centers
Contact Information:
Robert C. Knuepfer, Jr.
Attorney at Law
Baker & McKenzie LLP
One Prudential Plaza, Suite 3500
130 East Randolph Drive
Chicago, Illinois 60601
(312) 861-8913
robert.c.knuepfer.jr@bakernet.com
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