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Business etiquette for foreigners in Hungary

September 28, 2020

Hungary is an ideal place if you want to move your business to Europe. Company formation takes just 4-5 business days, corporate tax is only 9%, and there are no restrictions on the nationality of the owner of the company. However, if you want to build lasting and fruitful business relationships locally, you should get familiar with basic business etiquette in Hungary.

Build trust through transparency

Since you will probably be new to the local market, it is important to present yourself as a trustworthy partner. Having an up-to-date LinkedIn page is a good start, especially if your Hungarian company does not have its own website from Day 1. It is great if you have a local partner you already know and who can introduce you to new partners and vouch for you. Without that, you can still attend networking events in your business sector to find new contacts.

Face-to-face meetings are highly appreciated, and you can make a good impression with a strong handshake and the right amount of eye-contact. Mind you, because of the recent pandemic, business etiquette has also changed: meetings might be replaced by video calls, and some people might also refrain from shaking hands, while there is no widely established alternative for it just yet, since bowing or namaste are not (yet) customary.

Formality and direct communication

Especially at the beginning of a new business relationship, it is essential to show your respect towards your new partner. Respectful behavior includes not only the way you talk, but also the way you dress (formal attire means dark suit, white shirt, and closed shoes; a bit overdressed is always preferable to being underdressed), and arriving on time (preferably even 5-10 minutes before the meeting).

Hungarian people tend to communicate more directly in all situations, including business situations, which might make them come across as rude. In fact, they are just more focused on the goals to achieve, and if you do the same, you will find that they are open to negotiation and you will be able to arrive at a reasonable compromise together.

Mind you, “arriving at a compromise” is usually not an option when dealing with authorities or utilities. Some prices are regulated officially, in which case there is no room for bargaining.

Settings for a business meeting

Business meetings often take place at the office of one of the partners. Because of the pandemic, some of the meetings are being replaced by video calls, while sometimes other venues are chosen to protect the office staff from unnecessary risks, e.g. an open-air restaurant or café.

If you meet your business partner at a restaurant, clarify beforehand whether the meeting is supposed to involve a full meal or just a discussion over coffee. Having lunch together is still a popular option, so keep in mind that a traditional full lunch or dinner usually consists of having soup, a main course, dessert, and coffee at the end. In Hungary, a 10% tip is customary, unless there is a service fee indicated on the menu. If you are not sure, you can ask your partner or the waiter – this will reinforce your image as a considerate person who respects local customs as well as hard work.

If the discussion becomes more informal over the course of the meal, it is still better to avoid sensitive topics, which in Hungary include politics and religion.

Accepting and giving gifts

In Hungary, giving business gifts when meeting a new partner is not customary, and it is not expected. At the same time, you can pay for the meal you had together with your business partner as a courtesy towards them. Moreover, companies often send Christmas gifts to long-standing partners in December. However, please note that taxation for giving business gifts is a bit complicated, so this is something you should always discuss with your Hungarian accountant beforehand.

If you don’t know something, ask

Presenting yourself as a trustworthy business partner involves asking the right questions. If you are not sure about Hungarian business etiquette or standards of communication, you can always ask your local business partner to give you some guidance. Thanks to the more direct communication approach prevailing in Hungary, if you do this politely, it will be taken as a sign of genuine interest in and respect for local business culture, and will help you get established in the Hungarian business environment.

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