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“After the record-breaking FDI inflows of previous years, we expect 2026 to be a year of transition and consolidation,” Gábor Farkas, head of tax and legal services at PwC Hungary, tells the Budapest Business Journal.
“We anticipate a more moderate pace of new project announcements as investors adopt a ‘wait-and-see’ approach, assessing global market demand and the stability of local energy and logistics infrastructure before committing further capital. Traditional partners, particularly Germany, will likely prioritize the stability and optimization of their existing automotive footprints over expansion,” he explains.
Tamás Vékási, country managing partner at EY Hungary, points to the ongoing regional and national success in attracting foreign capital. “Although global FDI into Europe has fallen to a nine-year low, Central and Eastern Europe remains one of the few regions where investment continues to grow. Hungary has climbed to 15th place in the European ranking, with a 4% year-on-year increase in projects,” he says.
“Against this backdrop, we expect Europe, particularly Germany and Hungary’s regional neighbors, to remain the dominant source of new investments in 2026. At the same time, East Asian investors will continue to play a strategic role, especially South Korea, China, and Japan,” Vékási says.
“These three countries already account for more than 15% of Hungary’s FDI stock, and employment in South Korean companies has nearly quintupled over the past decade. We also expect the United States to remain a key non-European investor, particularly in high-tech, IT, and data-driven services, even though its overall share of European FDI has decreased in recent years,” he adds.
Primary investment projects anticipated for the upcoming year are expected to mirror previous years, while new opportunities may also arise in emerging sectors.
“Based on current trends, manufacturing and technology will remain the backbone of investment in Hungary in 2026. Automotive, EV, and battery-related manufacturing will continue to drive growth, alongside electronics and digital hardware, [while] software, IT, and tech-enabled services are expected to attract both greenfield projects and startup funding,” Vékási comments.
“We also see opportunities in food and agri-food, pharmaceuticals and life sciences, and renewable energy, as sustainability and energy transition become increasingly important across Europe,” the expert adds.
Farkas points to another area of growth and success for Hungary: shared services. “The Business Service Center sector is poised to remain active. In a challenging economic climate, global firms often look to these centers to drive process efficiency and automation,” he notes.
“By shifting from transactional tasks to high-complexity ‘Centers of Excellence,’ these hubs in Budapest and university cities like Debrecen, Szeged, and Pécs can provide the economic stability that the manufacturing sector might lack during a downturn,” Farkas explains.
Upcoming legislative changes are also expected to influence Hungary’s economic environment in 2026. Specific tax changes to be introduced this year will be “directly relevant for investors, particularly in manufacturing, energy, and high-tech industries,” says Vékási.
One of the “key developments” will be “the introduction of new tax allowances designed to encourage environmentally sustainable investments, including an income tax allowance for energy suppliers investing in new energy infrastructure and an EU-aligned corporate tax development allowance supporting the expansion of clean-technology manufacturing capacities,” he says.
There will also be a “new corporate tax allowance targeting environmental remediation and nature-protection projects, offering support of up to 70%, and even 100% in some circumstances, with a maximum of EUR 30 million,” Vékási notes.
“In addition, from July 2026, companies will face expanded VAT reporting obligations, requiring invoice-level disclosure of the actual VAT deducted, a change that will significantly increase short-term administrative workload and accelerate the shift toward Hungary’s eVAT system,” he warns.
“The financial sector will also be affected by a stricter extra-profit tax scheme, which may influence capital-allocation decisions for large banking and investment groups. Overall, the 2026 framework strengthens compliance while introducing sizable incentives for strategic, green, and technology-driven investments,” Vékási adds.
Farkas also highlights tax changes. “2026 marks a significant milestone for tax compliance with the first major reporting deadline for the Global Minimum Tax (Pillar 2). While the rules have been in effect for some time, June 2026 marks the first major reporting deadline for large multinational groups,” he says.
“This transition requires companies to move from strategic planning to rigorous data reporting. Although Hungary’s combined tax system generally aligns with the 15% requirement, the new framework fundamentally changes how international groups must evaluate their traditional tax incentives,” Farkas points out.
“On the incentive side, new green corporate tax benefits emerge as a notable new incentive element, specifically targeting energy efficiency and the production of net-zero technologies,” the consultant says.
Other factors expected to contribute to Hungary’s economy in the coming year include the 11% and 7% increases in the national minimum wage and the national guaranteed minimum wage, respectively, as well as the continuation of the 3% fixed-rate housing loans for first-time property buyers and family-oriented personal income tax (PIT) exemption policies.
Whoever wins, Hungary’s parliamentary election, set for April 12, is also expected to bring significant shifts to the country’s economic landscape, influencing both foreign and domestic investments and deals.
“Elections naturally introduce a period of ‘wait-and-see’ for large-scale, long-term investments. In the first quarter of 2026, we expect investors to prioritize predictability and policy continuity,” says Farkas.
“The outcome of the April vote will be closely watched for signals regarding the future trajectory of Hungary’s economic policy and the management of fiscal discipline. Regardless of the political outcome, the ongoing labor market tightness, with unemployment around 4.4%, will remain a key challenge, forcing companies to focus on efficiency and automation.”
Meanwhile, Vékási predicts that Hungary’s economic standing in 2026 will be shaped less by short-term fluctuations and more by its ability to adapt to global trends.
“Volatility, regulatory complexity, and rapid technological change are now permanent features of the business landscape. Companies are accelerating digital transformation, regionalizing supply chains, and prioritizing sustainability,” he says.
“Hungary’s strengths, including EU membership, industrial capabilities, and competitive operating costs, position it well to benefit from these shifts. However, maintaining predictable regulation, investing in talent development, and supporting technology and ESG initiatives will be critical to attracting and retaining investment,” Vékási adds.
Hungary has long battled to better integrate its small- and medium-sized enterprises into the economy. “Improving SME efficiency is essential, and a key solution lies in integrating these companies more effectively as suppliers into the global value chains of multinationals present in Hungary,” Farkas notes.
“By fostering stronger links between large international players and local firms, we can ensure that technology transfer and innovation permeate the entire economy. In the coming years, the real test will be whether Hungary can successfully pivot toward an innovation-led model that reduces reliance on sheer labor volume and builds a more integrated, resilient domestic business environment,” he concludes.
It is an opinion that Vékási fully supports. “In my view, companies that focus on innovation, digital transformation, and sustainability will be best positioned for long-term growth,” he sums up.
Editor’s note: Andersen, Deloitte and KPMG were also invited to contribute to this article, but were unable to meet our print deadline.
This article was first published in the Budapest Business Journal print issue of January 16, 2026.
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