Business infrastructure

Hungary promotes entrepreneurship to boost employment

Government trains and funds those under and over 30 to start their own businesses and obtain financial security.

Hungary’s entrepreneurship promotion programs, started this autumn, have been a big success, Sándor Bodó, Secretary of State for Employment at the Ministry of Finance, told Magyar Nemzet. The secretary said that more than 11,000 have applied to the program, and young people under 30 across the country and job seekers over 30 in Pest County can continue to apply for HUF 4.5 million in grants. The limitation to the latter category is due to high demand.

The secretary added that the government’s aim is to help encourage people to set up sole proprietorships as self-employed persons. It is counting on the creation of three thousand companies and estimates that by 2022 nearly eight thousand businesses will be created in less-developed regions and about a thousand self-employed people will start a business in the Central Hungarian region. From the support framework, the government expects three thousand businesses to be started by those over the age of 30, and nearly six thousand new businesses set up by the younger group. 

Out of the 11,000 applicants, 5,000 have thus far taken a competency assessment to measure their financial and theoretical know-how. For those who pass the test, there is then a training course to learn the legal and financial basics, work organization skills and management skills needed to start a business. Three thousand have now joined the course, and they will receive help with their business plans as well. For those who pass an exam at the end of the course, their submitted business plans will be evaluated by experts and, once approved, they will be awarded a certificate.

At this point, with their certificate and business plan, entrepreneurs can then apply for the HUF 4.5 million grant via the Hungarian State Treasury’s online interface. Applications will only be accepted from companies established up to three months before the application was submitted. The Hungarian State Treasury will review the applications received within a maximum of sixty days, and if approved, the entrepreneur will immediately receive half of the HUF 4.5 million grant. They can apply for the final payment and submit their report one year later.

Bodó noted that Hungary has the fifth lowest unemployment rate in the EU, at just 3.5 percent; the employment rate has recently risen above 70 percent. However, youth employment is below the EU level for older workers. So, this incentivizes the government to enact such programs to spur entrepreneurship and get young people working and help them achieve financial security.

Unlike the progress made by Hungary on the employment front, unemployment in the 28 Member States of the European Union stagnated for the fifth month, standing at 6.3 percent in October. The unemployment rate remains the lowest in the Czech Republic at 2.2% and the highest in Greece at almost 17%.

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