Poland and Hungary — gateways to the EU’s 450-million market, cheaper than Western Europe, Hungary’s tax among the EU’s lowest. Vietnamese firms (electronics, textiles, food, logistics) eye Central Europe — but the EU has an FDI screening “net”.
Why Poland and Hungary
- Location: Europe’s centre — distributing across the EU (Germany, France…) within 1–2 days by road.
- Cost: labour, land, operations far cheaper than Germany/France/Netherlands.
- Tax: Hungary’s 9% CIT — among the EU’s lowest; Poland 19% (9% for small firms).
- Community: large Vietnamese communities in both — business, labour and market bridges.
- Policy: both court manufacturing FDI (industrial-park incentives, training support).
EU FDI screening: the investment-review ‘net’
The EU’s FDI Screening Regulation 2019/452 — a cooperation mechanism: member states screen foreign investment in sensitive sectors (critical infrastructure, key tech, defence, data…), consulting the Commission and other members. Plus, Poland and Hungary each run national screening — buying strategic-listed companies may need prior approval.
For Vietnamese firms: ordinary manufacturing (textiles, food, electronics assembly) usually passes clean; but buying tech, energy or telecom companies needs screening assessed upfront — prepare filings, budget approval time.
Labour: different rules from Vietnam
Poland (Kodeks pracy): fixed-term contracts capped at 33 months total, then conversion to indefinite; notice periods scale with seniority.
Hungary (Munka Torvenykonyve): 40-hour week, overtime caps; probation up to 3 months.
EU common thread: strong employee protection — dismissal far harder than Vietnam; unions and works councils have voice; Vietnamese workers posted there need work permits/EU Blue Cards (skilled).
Tax and investment structuring
- CIT: Hungary 9%; Poland 19% (9% small firms) — but look beyond headline rates to real incentives (zone-based holidays, scale-based relief).
- DTAs: Vietnam holds double-tax treaties with both Poland and Hungary — dividends, interest, royalties get reduced withholding.
- Transfer pricing: dealings with the Vietnamese parent must be arm’s length — Poland/Hungary apply full BEPS/OECD rules.
- Outbound investment: on the Vietnamese side — firms need an offshore investment registration certificate under the Investment Law 2025; outward FX transfers per State Bank rules.
Buying companies in Poland/Hungary (M&A)
Vietnamese firms often acquire local companies instead of greenfield — faster, with customers and licences attached:
- Due diligence: legal, financial, tax, labour, environmental — especially tax debts and labour disputes (inherited on purchase).
- FDI screening: as above — assess before signing.
- Contracts: under Polish/Hungarian law (or English law in big deals) — warranty & indemnity, escrow holdbacks.
- Post-M&A: cultural and systems integration — many deals fail here, not at signing.
Risks and notes
Political risk: Hungary/Poland see policy swings (tax, incentives) — watch closely. Labour risk: dismissal hard, strikes strongly protected — leave the “Vietnamese mindset” home. FX risk: VND–EUR–PLN/HUF — hedge. Screening risk: tech/energy deals blocked or delayed — advise from the start. Outbound risk: on the Vietnamese side — offshore investment licences and money transfers must follow rules, no “roundabout” routes.
Frequently asked questions
Why do Vietnamese firms choose Poland and Hungary?
Central EU location (1–2 day EU-wide distribution), lower costs than Western Europe, Hungary’s 9% CIT (EU’s lowest), large Vietnamese communities, and manufacturing-FDI incentives.
How does the EU screen foreign investment?
Regulation 2019/452 — cooperation: member states screen sensitive-sector investments, consulting the Commission; Poland/Hungary add national regimes — strategic-company buys may need prior approval.
What is CIT in Poland and Hungary?
Hungary 9% (EU’s lowest); Poland 19% (9% small firms); Vietnam has DTAs with both — reduced withholding on dividends, interest, royalties.
What licences does Vietnamese outbound investment need?
An offshore investment registration certificate under Investment Law 2025; outward FX transfers per State Bank of Vietnam rules.
Contact FLAT Law Firm
FLAT Law Firm advises Vietnamese firms investing in Poland and Hungary: EU FDI screening, M&A, labour, tax and offshore investment licensing. Contact us from market survey.
This article has been quality-reviewed by the FLAW AI Legal Council