Hungarian companies – great business opportunities in Germany
Many Hungarian businesses are looking for ways to benefit from the economic boom in Germany. Their chances are good, as many German companies are in direct need of skilled workers. The good news is that in accordance with the Freedom of Services, any Hungarian company is allowed to offer its services in Germany. However, there are some bureaucratic challenges they need to overcome. Therefore, a professional consulting firm like RBO can be a great help and support for Hungarian companies in Germany.
Hungarian companies in Germany: relationships can be the key to success
The simplest way for Hungarian companies to work in Germany is to operate as subcontractors for German businesses. Also, Hungarian enterprises may apply and submit bids for contracts directly, as a main contractor, in high-value tenders that need to be published across the EU. Timing is now perfect, as many German companies are simply unable to meet demand.
Hungarian companies operating as subcontractors in Munich, Berlin or another German city receive an agreed, perforfmance-related payment upon project completion. This income is not taxable in Germany, only in Hungary. That means, a net invoice can be issued.
If you have a team of Hungarian employees working for you on a project in Germany, you do not have to pay social contributions in Germany from their wages.
You should know, however, that German minimum wage regulations do apply to Hungarian companies in Germany. Hungarian companies in Germany have to pay their employees an hourly wage of at least EUR 8.84 (gross, before tax). In some sectors, higher minimum wages may apply pursuant to collective agreements. German companies that use Hungarian subcontractors must therefore pay a correspondingly high wage.
The limit on weekly working hours is also applicable to Hungarian companies
Relevant local regulations, e.g. German Labour Act, shall always be complied with. Pursuant to the German Labour Act, employees are allowed to work no more than 8 hours a day or 40 hours a week on average. Weekly working hours can exceeded 40 hours only temporarily and in exceptional cases, the maximum limit being 48 hours per week.
Hungarian companies in Germany are allowed to accept orders at any time, but note, that companies in the construction or building cleaning industry must report their activities to the customs authorities.
Registration of the corporate seat for Hungarian companies in Munich or other German cities
For Hungarian companies that want to operate in Germany on a regular basis, it is advisable to have a local business address. A local business address makes them more trustworthy in the eyes of German business partners. Hungarian companies in Munich or other cities can count and rely on RBO to act as their trustworthy consulting partner and take care of the necessary formalities for them. Skilled manual workers or skilled tradesmen working for Hungarian companies must also register in the local Craftsmen Register (Handwerksrolle). Permanent Establishments in certain sectors must also prove that their employees have the required qualifications (that corresponds to a German master craftsman title). Here, too, you can count on the professional advisory services by RBO.
A common language makes cooperation easier
Hardly anyone at German companies can be expected to speak Hungarian. It can be therefore helpful if the Hungarian company operating in Germany has employees who speak German or at least English.