Moving to Budapest - looking for general and business advice.

Dear Paul,
I was interested to read your list and about your life choices:-)
My living experience in Europe consist of times spent in vienna, berlin, swansea and a bit in helsinki. I have no idea about the service sector/restaurants other than being a consumer.
I can offer lots of 'random' thoughts:)

My 'home town', Budapest, is a great city, not only in terms of culture, and a scenery, which easily rivals that of most other cities, but also in terms of atmosphere which is much harder to count than parks. Regarding the latter, in terms of youthfulness I feel we outshine the 'ethernal rival' Vienna, and we are definitely not very 'germanic' but this is a very personal judgement. All that comes at some costs - economy is mediocre and it is not so easy to enjoy all of this if you have an average local salary. As we were behind the curtain, cultural links to the mindset and habits of the 'west' (of Europe) are obviously weaker than in the rich western neighbour. Hungary offers the advantage in that it is cheaper, hence the investment and timeframe requirements for your business to start generating profits are weaker.
But, but: Hungary is experiencing relatively hard times, the stupidity of the government is not helping. What the chances are that you can open and successfully operate a Thai restaurant in Budapest without a local network of relationships - I have no idea. At least, it is a good time to buy property though...
I am still learning the bureacracy (just moved back a year ago)  it is safe to say, it is worse than in germany but better than in india. I would expect (from my brasilian experience) that mexican bureaucracy has only one major advantage over the hungarian - it is in Spanish.
I know you don't like smaller places - should I mention the second-coolest place in Hungary, Szeged? Not so large, but all Budapestians who move there (my friends are around 30+), seem to love it, they say it is more relaxed, safe, but still not too sleepy, and, of course, cheaper. (Short explanation: I am in Debrecen now, and slightly annoyed I didn't try Szeged)

My 'second home', Vienna is the exact same size as Budapest, but it feels smaller and quieter, so it comes at the top of all 'quality of life' lists, like Zürich (which is - as viennese say- even though twice as large as their own Central Cementery, offers only half its liveliness - ach, neighbour's love comes in many shades, as does viennese humour;)
Here you have the usual package: safety, parks, public transport, everything is shiny, culture galore(still a capital of classical music).   And, from the perspective of a young, not-so-loaded student, perhaps a bit... boring? Objectively surely more international than Budapest, but that is might be largely 'serious folks' like bussinessmen and bankers. Lots of CEE-immigration though (and Turkish goes without saying).
While spending high school and university years there, I remember it as a not-so open minded place, where it may be hard find (local) friends - depends, of course what you compare with, surely better than Salzburg or (god forbid!) Innsbruck - but I am comparing to Berlin. However, in terms of general economy, it far outperforms Budapest and many other European locations. So, an average salary will buy you a comfy lifestyle.(Don't expect immigration laws to be easy though!)

But indeed, Hungarian's mentality is much closer to a 'latino' one - as far as I can judge, and there are good chances you like the people more here. But that reflects on the economy too...
 

Have you considered Berlin, the new Paris of europe? I just lived there for 7 years - it is  larger(still smaller than London or Paris!), but very exciting, international, youthful, but also relaxed, a city with lots of parks, water... and no mountain or even a hill (the northern German dialects are called 'Plattdeutsch' for a reason!).
While having plenty of safe neighbourhoods, it is perhaps not quite as safe and boring and shiny as Vienna or Zürich, I consider that a plus.
It is full of foreigners and immigrated germans, but the natives are prussians in dwindling numbers, so they make up for it by their elevated level of 'charm' - the kind which leaves bloody bruises, but you get used to it:-)
Ultimately, one realises though that it is a German city - which is not a straightforward thing to describe. I may try by saying that most officially organised cultural entertainment events made the impression on me of being terribly well organised, running with the smoothness and charm of krupp stahl machines, but at the same time the city has many, many wildly flourishing, charming subcultures which make it what it is.
Being german, there is some economical growth, still the city is somewhat poorer, and hence slightly cheaper! - than other major western cities, including Münnich or Hamburg.
The weather is slightly colder than in Budapest, I suffered from lack of light during the Winter - surprisingly 500km north-south distance make a difference.

As I know these cities, I can say that, I personally could live modestly on 550 EURs p.m. in Budapest, ~1000 in Berlin, and ~1200 in Vienna. I guess, ca. 2000 eurs would be  a good guess for London?(I am single, don't like to cook, but don't mind flatshares..).

Warsaw is, I think, better economy wise than Budapest, and afaik, quite comparable to it in many respects (not in terms of tourist masses and old buldings, unfortunately, but that would lead us to topics like the Kniefall). For Indo-european speakers, Polish is still easier to learn than Hungarian, provided they don't swallow their tongues in the process. But with Thai as first language, I don't know... Hungarian without 'r' is easier to imagine than polish...(try to say 'Trzesniewski' casually a few times;)

I have only been to Barcelona one day - but the statement 'shools only in catalan' seems too much to believe, did you double check it?  To me it almost sounds like saying that Cardiff/Dublin shcools would offer only welsh/irish as teaching language, or that Budapest schools only offer teaching in hung..ups, sorry, that's only strange when looking from Vienna:-)

I have never seen Ljubljana:-(  I would expect a 500k, reasonably rich 'city' to be very pleasant, and still (slightly) less 'germanic' than Vienna. I remember that Slovenia already had lots of 'western' cars in 1988 - you guessed right, that was the only thing which got me excited enough to remember till today. I do wonder, wonder how business relationships look like in a country(pop:2M) smaller than Budapest's or Vienna's agglomeration (both 2.5M).

Just as a random Idea, I would expect the regions near the german-swiss-french border to have a good economical outlook and be 'southern' enough to offer a bearable 'vibe', from my perspective.

My two cents: one of my ex customers opened offices in Zagreb an Ljubjana as well, and I have to say the performing much better than the mother company in Budapest.

Maybe consider Malta, member of the eu, the private education is not expensive and the tourist season is looong.

There are also charming little choices on a less global scale, like Sopron, the rich 'dentist capital' experiencing masses of 'dentist tourism' from mainly German speaking folks(EU common market in health care services). Who probably appreciate good service. 1hour from Vienna, 2h from Budapest, I guess usually cheaper than either.
Debrecen, 2nd largest hungarian city makes lots of money of its 3000  foreign students (paying 1k EUR/month for medical school) which obvious effects for the service industry. Unfortunately, 'lively' is not the best word to describe the city, even with its 30k student population, if compared to the cool competition in Hungary and abroad. Also, it is more 'eastern' than more 'western' places if you know what I mean:)

PaulBart1 wrote:

We can either open a Thai restaurant

In Hungary, if required by your specific business sector, you must take, and pay for, required business courses and gain certain certificates before you can operate your business. Many courses and tests are only in Hungarian. Your experience abroad does not necessarily count -- you may be a great Thai cook, but to cook here you need to have a cook's certificate. Yes, even the waiters need to take a course and have a certificate.

This is the official site, only in Hungarian but if you use the  Chrome browser you can get it instantly translated:

http://www.szakkepesites.hu/

Further mention of that here:

https://www.expat.com/forum/viewtopic.php?id=134786

And don't forget the VAT in Hungary is 27%. That makes just about everything just a little more expensive.

@fireroller - Nice post with lots of useful information. I am curious, do you have experience/opinions of Pécs**?

**We have 30 cm of snow on the ground here, and I "heard" they have not had any to speak of. I like snow, but the climate in Pécs certainly seems warmer for those that might want to consider that.

klsallee wrote:

@fireroller - Nice post with lots of useful information. I am curious, do you have experience/opinions of Pécs**?

Thank you and sorry, not really, only that it is apparently ranked after Szeged and before Debrecen in terms of 'coolness factor':-) It had the oldest university of the country - which apparently ceased to exist in the 15hundreds, recreated later. And yes it should be warmer there, it is a wine region as well - which you surely know better than me.(We also have a nice layer of snow here in Debrecen.)  Not sure about the economy though, I mean it is surely not like Vienna.

By the way, there is the Indian gentlemen 'yoursumashankar' on the forum who wanted to establish a 'culinary academy' of some sort in Budapest, he was still on it a year ago - he may know more about how to fight the local bureaucracy-beast.

Edit: ok, replace the 'nice layer of snow' with 'nice layer of snowy-muddy water'...

Hi everyone, I'm late to the party but would like to address the original question mostly sidestepping the ongoing conversation, please forgive my rudeness:

First of all, it can be below freezing for 2-3 months in the winter, and it rains a lot in autumn. The weather is nice most of the year though, but it's not Paradise.

In Hungary the local language is Hungarian, all public schools are in Hungarian. Lovely language, but maybe not the first you'd want your kid to learn :-) Schooling in English will cost you money, but that money will buy you "private schooling", with the best and most motivated teachers, select classmates, nice surroundings.

Having grown up in the city (Budapest) and raising my kids out in the country, I strongly recommend the later. Plenty of towns and villages within commute distance to Budapest. Szentendre might fit your profile from what I can glean from your little introduction.

Regarding "OKJ" qualifications, there are plenty of Chinese restaurants operating with just one person barely speaking enough Hungarian to take orders and handle cash. I think you just need people with certain qualifications on payroll (at least that's how it is with retail shops and the "retail shop manager" OKJ qualification my wife has.)

Hmm, OKJ courses (exam preparation and testing) in English, there's a business opportunity :-) Or better yet, interpretation service for the exam :-)

Oh, and a personal question: Why did you rule out Canada?

szocske wrote:

Hi everyone, I'm late to the party but would like to address the original question mostly sidestepping the ongoing conversation,
...
Oh, and a personal question: Why did you rule out Canada?

hey, we totally stayed on-topic:
'All thoughts, however random, much appreciated'
;-)
I do find a good way to describe hungary is to describe how various places feel to a hungarian.
E.g. the hot summer('95) in Toronto reminded me of a sauna. I heard that winters are slightly better in this respect though... (Ontario lake prevents proper 'continental weather')
If we interpret the 'european culture' requirement loose enough, one could also come up with the two charming Australian cities offering the most European lifestyle: Melbourne and Sydney. Would they not be so far away I would consider moving there. (Australian economy is fuelled by Asian growth, and the mines in WA.)
I conclude that hungarian summers are less damp than in Ontario or GB, but more damp than australian ones. Winters are less harsh than in most of Canada.

szocske wrote:

Regarding "OKJ" qualifications... I think you just need people with certain qualifications on payroll (at least that's how it is with retail shops and the "retail shop manager" OKJ qualification my wife has.)

This is correct. For example, you can hire a store manager with the OKJ certificates. But this adds fixed costs to the business versus having a family only operation.

Also, family businesses, as I understand it, have a bit more wiggle room here, so your wife can have the OKJ certificate and you do not need it to work retail in the store even if she is not there. But, also as I understand it, this is not true for an employee. In that case the non-OKJ employee can not work alone but must be supervised by an OKJ certificate holder. That is, only family members get this benefit.

Also, consider food services is particularly heavy in regulations. For example, I would check, officially from the government office -- not just someone telling you, if every cook needs the OKJ certificate or just the "head chef" (who would have to be then present all the time to supervise the other non OKJ certified cooks -- no vacations, sick days etc...).

Finally, I heard that the law changed some weeks ago (another law change here, what a shock), and I have not had a chance to read it yet, so any part of what I wrote above may be now different.

On the other hand those certs are a joke to native speakers with half a brain, Just pay the money, sign off on the courses, and take a brain-dead test supervised by your instructors who advertise themselves with "100% pass rate" and will do anything to keep it up.

szocske wrote:

those certs are a joke

Agreed.

However, the problems start when the inspector comes by and hands the business person a huge fine for not doing something they should have learned in the course.

szocske wrote:

Hi everyone, I'm late to the party but would like to address the original question mostly sidestepping the ongoing conversation, please forgive my rudeness:

First of all, it can be below freezing for 2-3 months in the winter, and it rains a lot in autumn. The weather is nice most of the year though, but it's not Paradise.

In Hungary the local language is Hungarian, all public schools are in Hungarian. Lovely language, but maybe not the first you'd want your kid to learn :-) Schooling in English will cost you money, but that money will buy you "private schooling", with the best and most motivated teachers, select classmates, nice surroundings.

Having grown up in the city (Budapest) and raising my kids out in the country, I strongly recommend the later. Plenty of towns and villages within commute distance to Budapest. Szentendre might fit your profile from what I can glean from your little introduction.

Regarding "OKJ" qualifications, there are plenty of Chinese restaurants operating with just one person barely speaking enough Hungarian to take orders and handle cash. I think you just need people with certain qualifications on payroll (at least that's how it is with retail shops and the "retail shop manager" OKJ qualification my wife has.)

Hmm, OKJ courses (exam preparation and testing) in English, there's a business opportunity :-) Or better yet, interpretation service for the exam :-)

Oh, and a personal question: Why did you rule out Canada?

Canada is a lovely country with nice people - I lalways prefer then to Americans - but it is very, very cold and last time I checked very, very difficult to move there and live.  I you know something I don't, tell me but the rehirements looked very tough to reside there.

Cheers

Paul

Szerbusztok folks ...

I've also been thinking about buying an apartment in Budapest, (I have dual citizenship and speak reasonable Hungarian). The original thought some time back was to buy an investment property, but the ridiculous tax regime which advantages companies over private landlords put a kybosh on that.

More recently I've been toying with the idea of moving to Hungary, (probably Budapest) and starting some sort of business. A restaurant being one option I'd considered, some of the above concerning regs is a tad discouraging. Does anyone know if there is much red tape involved in operating a bed and breakfast?

Everything is complicated, but there are people to take care of the complication for you for a small fee :-)
Budget for professional help starting up, then a monthly fee for accounting services.

Don't know about Restaurant.

I'm running an IT business.
It takes a lot of patience and money to do that.
Though I'm a third world original. It took a whole lot more money than for EU citizen.
The Laws change almost everyday.
January brought us new re-registration problems which cost money.
Last January we had a compulsory registration in Chamber of Commerce (15K HUF in a year).
It's a small addition to new taxes which rise (because most of our workers have minimal wage) every year.
The economical climate is unpredictable, I just hope Fidesz will drop out of country, as it brings the country down once again as in 1990's.
Fidesz is a local mogul's group who helps them to takeover local spots. The problem is, these moguls have no money to buy out. So Fidesz bent over to get money (private pension funds screwing, new taxes, compulsory registrations and vat rise to 27%, taxes on communications, cables, SMS, telephones, banks, new constitution).
Only this did not bring any results again. There was some info on CBA buying local Match, but it did not work out. However international corporations live better in this, though they are taxed, they have more money, and they know Fidesz can't sit more than 2 times.
The banks got bad a bit, because they moved taxes on clients and those just took money off the banks.
The funniest thing it brought local businesses to their knees. And now with re-registrations they are stripping bankrupt and stealthy companies off the way. The question is for what cause?
Seems like whenever the MSZP loses popularity FIDESZ comes to play and ruin everything Hungarians had so MSZP can gain popularity again, bring back the best and ride into parliament on a horse.

By the way if you want Hungarian residence permit you need to keep at least 3 workers in company (and pay their taxes).
That is around $32K nowadays per year.
Add to this a price for a good accountant (around $100 per month) $33200 only to keep business running and not losing your temporary residency.

About b2b, smaller companies who speak English are pretty robust. Big companies (like telecoms) are VERY rigid and stubborn...

If you have more questions, just ask.

Ikinoki wrote:

By the way if you want Hungarian residence permit you need to keep at least 3 workers in company

Most recent law passed, as I understand it, "simply" requires a foreign non-EU citizen "investor" to buy at least €250,000 of Hungarian government bonds (last time I checked, these bonds were claiming to return the unsustainable, national bankrupt generating rate of 8%).

Note: Switzerland and the US also have investor residency laws, but these are not so directly tied to buying government bonds. That is, there is a difference between offering residency to foreign nationals who are really interested in investing in a country (in theory to generate real jobs and business), compared to what appears to be almost purchasing residency by paying into a scheme set up by the national government (and where does that money really go?).

It's very interesting how foreign ppl see Hungary.
Keep posting please

It will give you temporary residency, not permanent.
For permanent residence you will have to live here for 3 years.
So your money will be out of use for 3 years.

Hello Ikinoki

Perhaps there's something lost in the translation as English is clearly not your first language, but you sound just a little bitter. A good number of my Hungarian friends and relatives talk in similar manner about Hungarian politics, only the roles of Fidesz and MSZP are reversed.

Fortunately I don't have any issues with respect Hungarian residency. While I consider myself more Australian, I was born in Hungary, speak the language reasonably fluently, and have dual nationality.

Kisalle

The Government bonds with an 8% yield you mentioned; would the investment be held in Euro's or would it be converted to Forint?

Phil S. Stine

I had good English language skills before arriving here.
Unfortunately low level of practice shows results after years, both my native and English degraded a lot.
I hope I will be able to recover soon, but talking with Hungarians in English or Russian makes me adopt (because people here think they understand those languages but they make a lot of mistakes which result in financial losses, had a lot of incidents because of this). One main difference between languages is that Hungarian allows for the order of words to be almost completely random. Sooner or later I started talking with random word order in other languages too, though my Hungarian is on a 3-grade school level.
But that's my reaction to changes as I adopt fast (that helps with the business a lot).
So sorry if my post was a bit confusing.

Phil S. Stine wrote:

Hello Ikinoki

The Government bonds with an 8% yield you mentioned; would the investment be held in Euro's or would it be converted to Forint?

There was an Premium Euro bond, I don't know that still exists.
Mainly the Goverment bonds are in HUF.

Phil S. Stine wrote:

The Government bonds with an 8% yield you mentioned; would the investment be held in Euro's or would it be converted to Forint?

Forint. Euro bonds are about half that yield.

See http://www.allampapir.hu/ for rates.

Ikinoki wrote:

It will give you temporary residency, not permanent.
For permanent residence you will have to live here for 3 years.
So your money will be out of use for 3 years.

The residency law requires (as I understand it) buying 5 year bonds. So it puts the "investor" on the path to permanent residency.

Yeah, just read it too.
But you'll still need money for permanent residency, like income or money in the bank (a lot, around 70k usd). I'm not sure if you can show bonds as necessary funds for Hungarian lifestyle (as they call it at Harmat street), as bonds will be locked for additional 1 year and 8 months.

Thanks Entity and kisalle

Aha .... thought it sounded too good to be true, not nearly as attractive. I saw 9% offered by a bank when I was last in Hungary (oct/nov 2011). I think 5% currently available in Australia is a safer bet.

Is there income tax payable on the yield of government bonds?

If you pay tax in hungary, you have to pay taxes after the income from shares, bonds, debits etc. it has a flat rate of 20 or 16% ( i am not sure )

Fantastic, I invest in Government(forint)bonds and receive 8% interest, on which they tax me 20% leaving me a nett of 6.4%.

With the official inflation rate in Hungary at around 5.5% I'm not left with much; and that if I can trust the official rate. If the official rate differs from the real rate by only as much as it does in Australia (official 2.2%, real rate about 4%) then I'm actually losing money.

Cost of living is increasing much faster than that, the KSH agency that publishes the official inflation figures keeps stuffing the basket with whatever had an artificial tax rate drop that year: tobaco, alcohol, etc.

Phil S. Stine wrote:

Fantastic, I invest in Government(forint)bonds and receive 8% interest, on which they tax me 20% leaving me a nett of 6.4%.

Isn't it a wonderful country?
add 0.2% tax transfering funds from 1st january..
and 0.3% if u take money from ATMS
Now you start understanding why I left it...

I noticed your post was  a year old. I wonder if you have made Budapest your home or not.
Your are a world traveler it seems.
My husband and I have plans on visiting Thailand, sounds great there but in your case it seems it didn't fit what you are looking for.
I am glad for you that you didn't settle in Texas, too much of an Old Boys attitude in the American SW for most outsiders to adjust to.
I am an American and my husband is a Hungarian.
We have lived in many US states and now have retired here in Hungary. We lived for many years in Hawaii and think after all the travels we have had that perhaps that place is best suited for us.
My husband has been gone from HU for more then 40 years. Of course we have made long visits over the years but now that we are settled here we see things that we didn't see before when we lived here only part-time.
One thing the weather is not to our liking, the winters are too dark and long for us.
The people are friendly enough once you get to know them but since we are used to a more open attitude of knowing people we find most people here way too private and at the same time way too nosey.
Since your wife is Asian, I wonder how it will be for her over here. Almost all the Hungarians we know in the US are married to Japanese women. There wives rarely visit Hungary , they often send their husbands to visit alone.
They are too uncomfortable with the way they are sometimes treated here.
Nothing really bad has happened to any of these ladies but they just don't enjoy it here.
Business wise, 23 years ago we had a small time import/export business from Calif. to HU.
We will never do business here again, way too difficult with too many people wanting to make a fortune in a short time. Not worth the stress.
good luck.

Szervusz.. Yes realy difficult for hungarians, cause those England's banks sucks them out day and night and day after day, you left modern slavery tough positions and sattle closer to the master. Someone works in the fields, someones in the kitchen , here always more crumbs   
I believe in most cases, the mess inside of the people's soul, force them to find excuses, unsatisfaction with outside world and that is the primary force to become expats. I am not talk about  expats.
Financial issue cases crashes with time, new toys keeps baby out of cry for a while.
When I was young and crazy on the west part of europe I met roffless man, he was originaly Romanian, as I remeber, he worked at Swedish embasy at Ceausescu regime and escaped to Sweden.
Anyway thats not important , the important what he said about his expat life (he left family in Sweden,burn passport, left a note, and gone)  "After living a while as an expat , you can make 2 mistakes: 1. - continue to be an expat, 2. - back to home." (Back to home he didnt mean, back to regime, fear. Ceausescu was already murdered, so in his case its even more advantage to return as a hero, for a new political force to build new Romania and cash lots of money, lots of as everybody did after communism fall") At that time I though, oh dude, no matter how  educated you are, seems you dont get how beautiful west life is and when you have money in the pocket(!). I was 20 years old and he was heading to Vatican on his feet from Helsingborg,Sweden. Hope he reached his destination safe and now high in the sky laughing at me:  "You got it? Why it took so long?
I totaly agree changing place, can help to clean the mess, but not in all cases. Or maybe I am cursed  
Good luck. The most important to feel happy no matter where you are and how much % they charge. Peace brothers in arms we will never surrender.