It is already more than one year, since outsourcing specialist ASB Group, aimed to strengthen the position in the CEE region, and announced its expansion to Hungary with a new office on Andrássy út in Budapest. Today, we interviewed Attila Szedmák, Managing Director of ASB Groupʼs Budapest office. He is in charge of all BPO and corporate services for the clients in Hungary.
Tell us how you started to work as Managing Director of ASB Hungary in 2018? Where did you gain your previous experiences?
I worked in both, first and second-tier service providers (TMF/UCMS and Deloitte) for a relatively long time, where I had an opportunity to work in various job positions in finance, accounting and tax business lines and with responsibilities related to them. During this period, I gained a complex insight to the business process outsourcing. When the ASB Group was expanding, I was most attracted to the fact that the company was dynamic even with a relatively high number of employees in the region, besides also to its strategic management and business plans in Hungary.
What has been the recent progress of ASB Hungary on the market from 2018, when you started the business from scratch?
That is right, we started from scratch on the Hungarian market. Now, we have quite a colourful portfolio of about 15 clients. Like in the ASB Group’s other branches, it is a combination of foreign and local companies. In this context, we have extended our existing accounting and payroll teams. This is not quite so easy with regard to the current situation on the labour market. The ASB Group has a relatively strong position in the Czech Republic and Poland, so I believe that we will manage to grow significantly as well in the near future.
You work for both local and foreign companies operating in Hungary. What are main issues you help to solve for them? What is your scope of services and main competencies?
The Hungarian branch of the ASB Group provides almost identical services for all clients in the entire region. Therefore, we focus on company domiciliation and administration services, corporate services as well as accounting, financial, tax and payroll services. Another business line includes transaction services, specifically financial and tax due diligence. As regards to the legislation and economic environment for entrepreneurs, Hungary does not significantly diverge from the other CEE countries. Our economy is markedly oriented on export, and GDP growth is one of the highest among EU countries. This makes our market relatively stable also from a long-term perspective, which is profusely analyzed and considered by the foreign investors.
What is your portfolio of clients?
As I have mentioned, our portfolio of clients is quite varied. Some of our clients have relatively strong relations origin from the Czech Republic, and they perceive the presence of their business in Hungary as a great opportunity. One of our significant clients is a Czech online food retailer, who is running delivery of groceries in Budapest from December. Now the client is competing with established companies by offering faster delivery as well as products previously unavailable in Budapest. Then, e.g. a Czech development group (residential), which focuses on investments in renewable resources in Hungary. This is also one of the business sectors of our other important client – the fund management company Redside, which is, through the Nova Green Energy fund, a significant player in the field of investments in renewable energy in Hungary.
Hungarian companies come mostly from the service sector, which dominates the Hungarian economy – if I am right, the share in our economy exceeds 65%. Our branch serves also so-called group clients, investors and funds with active portfolios across the countries in Central and Eastern Europe, most often in the commercial real estate industry.
Generally, do you see some specifics in terms of doing business in Hungary?
With regard to economic indicators similar to other countries of Central Europe, I don’t see significant differences. The company formation process is relatively quick in terms of time and costs (in comparison, for example, to the Czech Republic, where the process is still more time demanding), and the accounting and reporting standards are now identical to the EU regulation. With regards to payroll, I do not perceive any significant differences. However, in tax system, we have a certain specific one in the form of a so-called municipality or local business tax.
Local municipalities may impose taxes on entrepreneurial activity carried out in the territory of the municipality. The most important and frequently introduced local tax is the latter one – local business tax. The amount of local tax is not deductible for corporate income tax purposes and is calculated by reference to trading profit. The maximum rate of local business tax is 2% of the tax base. Within this limit, it is at the discretion of local municipalities to set the applicable tax rate.
ASB Hungary works for a Czech online food retailer, which is dynamically spreading from the Czech market to the CE region. Is not it quite a specific industry to operates in e-commerce sector?
Definitely. Generally, we perceive e-commerce as a very interesting industry, which thanks to technology, is changing continuously, so we must also adapt to it. This client is for some time yet a large company which has built a sufficient structure, and all management positions are at the level of both HQ and local markets. To us, it is quite a full-valued partner in all areas.
Start-ups and e-commerce projects often perceive finance as a painful necessity which, compared to all creative processes, is not too interesting I guess. However, as a result, it holds true that if you want the company to grow, you can not avoid the financial aspect. In addition, from a certain phase of company size, you can not avoid to deal with reporting, risk management, financial planning – these are all processes that will be required from you by potential investors or financial institutions which, with the appetite for expansion, you will probably reach out.
What are the benefits of the ASB Group for your clients?
The ASB Group’s strategy is applicable at the level of all countries, which is to provide the full scope of services on a one-stop-shop basis for all BPO processes and, at the same time, to provide regional clients with an individual approach and a single point of contact. For a large number of our clients from the real estate – which is our strongest sector – the high added value is certainly evident in the fact that ASB operates as a BPO provider and, at the same time, also has a strong track-record in the field of transaction advisory services (financial and tax due diligence). It means that apart from company formation and SPV administration, fund reporting, corporate, accounting and tax services, we are able to assist our clients with major transactions as well. Which is, as I have heard many times in the feedback, appreciated by our clients.
Attila Szedmák
Attila Szedmák has 18 years of technical experience gained at first and second-tier service providers in the fields of finance, accounting, tax advisory and controlling, possessing valuable knowledge and practical know-how of compliance, consulting, management reporting, and tax structures within different operation models. Prior to joining ASB, Attila became a registered International Tax Expert and Tax Advisor with UCMS (TMF), and worked for Deloitte in Budapest. He also gained six monthsʼ experience in corporate trust in Luxembourg. He is also a certified accountant.
ASB Group specializes in outsourcing services in the areas of accounting, company formation, tax advisory, transaction advisory, trust management and payroll.