Immigration

Hungary's Entrepreneurs Flock to London


Hungary's Entrepreneurs Flock to London

Illustration by 731

When Istvan Bozo first moved to London in 2010, he craved the flavorful pancakes he’d loved as a child in Hungary. After sampling some at more than a dozen restaurants and tasting only disappointment, he resolved to open his own establishment. It took just two weeks to line up the permits and financing for Crepe Fun-Tastic, a pink-and-green-fronted shop near Victoria station. “It’s much easier to work here,” says Bozo. “At home—even if you’re very, very good at what you’re doing—if you don’t have friends to help you along, you’re never going to get ahead.”

London has long been a magnet for entrepreneurs and job seekers from all over the world, as the city’s high concentration of ethnic eateries, from curry houses to kebab shops, attests. Now the British capital has become home to a growing community of Hungarian immigrants. The U.K. last year displaced Austria as the No. 2 destination for Hungarian migrants, after Germany, according to Seemig, a European Union-sponsored program for managing migration. In 2012 there were 47,000 Hungarians residing in Britain, up from 5,000 in 2001. The community is large enough to support its own magazine—named 6:3, after the score of a seminal 1953 soccer match in which Hungary’s national team beat England’s.

Spurring the influx is Hungarians’ ability to work in the U.K. without a visa, following their country’s 2004 entry into the EU. And job opportunities are more plentiful abroad. The Central European nation has endured two recessions in the last four years, and its jobless rate was 10.5 percent in May, compared with the U.K.’s 7.8 percent.

The U.K. ranked No. 7 in ease for entrepreneurs in the World Bank’s latest “Doing Business” report, and No. 2 in the EU, after Denmark. Hungary came in 18th among the 28 members of the trading bloc and 54th globally.

Zsoka Bekefi, the owner of NemSuti, a vegetarian bistro that opened in downtown Budapest last December, says it took about three months to line up the necessary paperwork. Before she could even apply for a permit from the local authority—which took 45 days to come through—she had to hire an architect to draw a plan of the premises. The process of setting up a business is “overregulated,” and the rules don’t always make sense, says Bekefi.

There’s a slew of administrative fees as well. Hungary requires business owners to hire a lawyer, which can be as much as 100,000 forint ($447). On top of that, there’s a registration fee of 50,000 forint. In the U.K., registering a private limited company online costs £15 ($23), takes 48 hours, and requires no solicitor.

The Hungarian government is working to pare back the red tape through a program dubbed “Simple State” and a new civil code set to go into effect next year that will allow companies and cooperatives more flexibility in setting up a founding charter, according to an e-mail from the press office of the Ministry of Public Administration and Justice.

It remains to be seen whether any improvements in business conditions would lure entrepreneurs back to Hungary. Bozo is already mapping out an international expansion for his crepe business. “I’d love to turn this thing into a franchise,” says the onetime car mechanic. He says he’ll be heading to Dubai soon on a scouting expedition.

The bottom line: Hungarian entrepreneurs are trooping to the U.K., drawn there in part by its business-friendly environment.

Lovasz is a reporter for Bloomberg News in London.
Balazs is a reporter for Bloomberg News in Budapest.

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