Hungary became the country of six hundred thousand entrepreneurs
The number of sole proprietorships in Hungary is growing faster than the number of joint ventures. In 2021 alone, 85,000 new entrepreneurs chose this form of enterprise, as a result of which the number of sole proprietorships increased to 587,000 by the end of 2021, and the trend is likely to increase further. Opten from the latest data.
The number of sole proprietors in 2019 is higher than that of joint ventures, but the difference has increased since 2021, as despite the increase in the number of companies, there are currently “only” 530 thousand joint ventures in Hungary.
Interestingly, the increase in the number of sole proprietors in 2021 also denied the increase in 2020, despite the fact that in 2021 the KATA rules for services between affiliates were much tightened.
The fact that it is easy to pause the activity for longer or shorter periods also contributes to the individual’s popularity. The bulk of the self-employed population is not provided by entrepreneurs on a temporary basis.
Currently, about 91,000 sole proprietors are down, while there were nearly 110,000 downtime during the first wave of the coronavirus.
When analyzing sole proprietorships, this plays an important role in what kind of economy will be affected by the growing mass of sole proprietorships in the long run. In the short term, there is no doubt that loose tax regulation could have an economic stimulus effect, therefore the there are also downsides to being an individual entrepreneur, especially in such a large mass. On the one hand, the low administrative burden on sole proprietors is accompanied by a lighter level of transparency, which points in the direction of the gray economy and the abuse of legal loopholes.
On the other hand, it is likely that many, due to the tightening regulations in 2021, will opt for this form rather than the corporate form of employment rather than the employee relationship, backed up by sham contracts. Employees who are “employed” in this way may be more vulnerable to their employer in the long run, and the value of their expected retirement will also be much better. The magnitude of these impacts is difficult to assess, so the number of individual entrepreneurs increases the risks to this guideline.
In regional terms, the number of sole proprietors is in Budapest and Pest County, and the growth is also the strongest in these areas. Tolna, Szabolcs-Szatmár-Bereg and Heves counties had the lowest growth, but the number of sole proprietors also increased in these areas, Opten writes.