Hungary Cybersecurity Opportunities
The introduction of the NIS2 Directive by the European Union, which will take place in October 2024, marks a significant turning point for cybersecurity in Hungary and across Europe. From January 1st, 2024, companies operating in Hungary have faced significant new cybersecurity related obligations under Hungarian legislation implementing the EU NIS2 Directive. Service providers and organizations operating in “high-risk” and “risky” sectors are covered by the new law. High-risk sectors include energy, transport, healthcare, digital infrastructure and electronic communication. Among others, postal services, digital services, food and chemical manufacturing and electronic product manufacturing are classified as risky sectors.
As a main rule, the Hungarian Cybersecurity Certification Act does not apply to SMEs, but to companies that employ at least 50 employees or have an annual net turnover or a balance sheet total exceeding EUR10 million ($10.9 million). The Cybersecurity Certification Act, enacted by Hungary in May 2023, requires basic cybersecurity measures for the electronic information systems of these entities. Companies covered by the act had until the end of June 2024 to register with the Regulated Activities Supervisory Authority, and the measures shall be applicable as of October 18, 2024. Affected companies shall appoint an independent auditor by December 31, 2024, with the first NIS2-compliant cybersecurity inspection completed by December 31, 2025.
Local companies operating in sectors deemed vital to the economy and society are required to take additional measures to ensure they are protected from cyber-attacks, such as establishing incident reporting systems. Therefore, opportunities exist for U.S cybersecurity companies providing stronger supply chain security, enhanced network security, better access control and encryption. With penalties for noncompliance reaching up to 2% of global annual turnover, there is a strong incentive to find good cybersecurity partners.
The Hungarian cybersecurity market, one of the largest ICT subsectors, is poised for robust growth, with expected annual growth of 12.25% from 2024 to 2029. This growth trajectory, coupled with the immediate need for compliance with NIS2, presents an ideal opportunity for market entry. Revenue in the cyber solutions market in Hungary is projected to reach $105.7 million in 2024.
U.S. companies in the IT cybersecurity subsector have a strong worldwide reputation for great quality, innovation and after-sale service, and are well-positioned to compete in the cyber market in Hungary.
To learn more about the impact of NIS2 and how your company can leverage the resulting opportunities, please contact Eva Bosze, Commercial Specialist at CS Hungary: eva.bosze@trade.gov.