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9. BUSINESS UNITS AND NON-PROFIT ORGANISATIONS

Registered business units

The data of registered business units presents the contents of the Statistical Business Register. The SBR contains daily updated information on the status (creation and termination), legal form and regional data of all organisations with tax numbers. These come from public administrations managing public registers, which are transferred to the SBR through a one-stop shop. The code of the main statistical activity and the staff category are set by the HCSO to support the organisation of the collection of data. The final production of data is based on the most recent data available as of January of each year, in order to have preliminary information on the main characteristics of that year. Due to the stability of data collection, data changes only in the rarest of cases during the year. The most important concepts of publication are the following:

The population of the SBR is constantly updated on a daily basis via the one-stop shop system, therefore it is considered to be an important prosperity indicator. Although the contents of the SBR is heavily affected by the administrative public registers and data collection management, as a result the changes in the SBR population can reflect economic, administrative (mainly register and data collection management) aspects. Administrative changes are recorded in the "methodological change" section.

The most important concepts of publication are the following:

A registered business unit is a legally existing economic organisation with a tax number according to administrative records. The scope of legally existing organisations includes bankruptcy, liquidation, winding-up and compulsory liquidation proceedings at the time, as well as sole proprietors who are suspending their activities.

A newly registered business unit is a registered business unit, which was legally established during the reference period, i.e. that when it was entered into the administrative registers and received a tax number.

Applied classification

The applied activity classification of the registered and the active enterprises follows the NACE Rev.2. Enterprises are classified by the HCSO according to their principal statistical activity. The statistical main activity is identified as the activity which contributes the most to the total value added of the enterprise concerned.

Size classes: the size class of the registered business units in the SBR is set at the beginning of each year to support the data collection procedures and activities. The size class data is based on the latest information available at the beginning of the year, and during the year the data will only change in special justified cases. At aggregate level, the reason for the inter-annual changes can be traced back primarily to changes in the population. The data of ceased business units will be removed, and the data of newly registered business units will be included through the OSAP No. 1032 questionnaire recording their expectations of the reference year.

In the case of active enterprises, the way to determine the number of persons employed has been changed from 2007 onwards in line with the methodological recommendations of Eurostat. According to the recommendation of Eurostat, an enterprise performing an economic activity has to have at least 1 employee; therefore, in the case of all enterprises with a personnel of 0, the number of personnel is increased by 1.

Methodological change, 2021: the methodology used to support the organisation of data collection for number of personnel data changed in 2020. Previously, if data were not available for an organisation for the reference period examined at setup, it retained data of the previous year. The new methodology eliminates this and classifies the organisation as zero or unknown. As a result, a significant reclassification occurred in January 2021, with primarily 1-person organisations transferred to the zero or unknown category.

Methodological change, 2024: business units whose activities have ceased but have not yet fulfilled all their tax obligations (e.g. they have not submitted their final tax return etc.) are treated as technically ceased by the taxpayer register. The SBR treated the technically ceased private individuals with tax number (GFO = 233), other entrepreneurs (GFO = 232) and households (GFO = 961) as registered business units. In March 2024, this practice was changed due to data collection organization: the status of technically ceased business units of the three previously listed legal forms recorded in the SBR changed to ceased (therefore excluded from the registered business units' population).

Data on registered business units are prosperity indicators. Time series data on enterprises are provided by Business Demography, and separate statistics on nonprofit organisations are also available. Personnel data independent of legal form can be found in the labour market statistics. The Business Demography and the statistics on non-profit organisations similarly to the registered business units are available under the "9. Business units and non-profit organisations" section. The labour market statistics can be found under the "20. Labour" section.

Business Demography

The Business Demography (BD) statistics present the demographic events (birth, death and survival) of the active (it has either turnover or employment) enterprises for the reference year. In accordance of the Regulation No. 2019/2152 of the European Union, adopted as European Business Statistics (EBS), the population of Business Demography statistics is based on the non-financial (S.11), financial (S.12) enterprises and households (S.14) sectors of the National Accounts. Instead of legal units, the statistical units are based on the economic statistical unit (enterprise) which is defined by the Regulation No. 696/93 of the European Union. The Business Demography statistics is harmonised with the Structural Business Statistics (SBS), which describes the structure and performance of businesses. The detailed methodology of Business Demography is available in the Manual on Business Demography published by Eurostat-OECD in 2007.

An enterprise by definition is an organisational unit producing goods or services which has a certain degree of autonomy in decision-making. An enterprise can carry out more than one economic activity and it can be situated at more than one location. An enterprise may consist out of one or more legal units.

The use of the statistical unit enterprise is required by the EBS regulation. The advantage of the enterprise statistical unit is that it better eliminates the impact of organisational transformations due to legal, administrative or financial reasons, thus enabling a more accurate presentation of economic processes and events in the national economy. A natural consequence of this change is that the number of active enterprises has decreased compared to the statistics based on the legal unit.

In reference year 2021, the data sources have been expanded with social security records from the National Customs and Tax Authority, as a result the number of active enterprises increased with the number of private individuals with tax numbers, which appeared primarily in agriculture. Starting with reference year 2022, the data sources will also be expanded with the online e-invoice system data.

Definitions

Active enterprises: an enterprise is considered active if it has turnover or employment in the reference year. The definition follows the methodology of Eurostat's business demography statistics. Since 2015, nonprofit business associations have been included in business demography statistics. The employee count of an enterprise is counted as an annual average, which is rounded to the nearest integer, thus the zero employee count means the enterprise had an annual average employee count less than 0.5.

Entrepreneur: private persons who fall under the competency of the Act on private businesses and also those who perform a business activity and have a tax number (e.g. freelance professions). In the case of active entrepreneurs, the definition covers only private persons who fall under the competency of the Act on private businesses.

Companies and partnerships: the total number of companies and partnerships contains both the number of companies with legal entity and the number of partnerships without legal entity. The definition "companies and partnerships" contains all enterprises except entrepreneurs.

Real births of enterprises: an enterprise is considered a real new enterprise if it is active in a given year and was not active in the previous two years. An enterprise birth with a predecessor is not counted as a real birth.

Real deaths of enterprises: an enterprise is considered to have had a real death in a given year if it ceased its activities and is not reactivated within two years. An enterprise death with a successor is not counted as a real death.

High-growth enterprises: an enterprise with average annualised growth in number of employees greater than 10% per year of a three-year period and having at least 10 employees in the beginning of the growth.

Survivor enterprises: an enterprise is considered to have survived if it is active in the year of birth and the following year(s). The survival data is calculated up to 5 years.

In the Dissemination Database, there are currently two archived sections titled as Business Demography.

Annual performances and expenses of enterprises

(Description of the methodology of Structural Business Statistics (SBS) by size-class and of SME Statistics)

Observed sections of national economy (NACE Rev. 2):
– Until reference year 2017: A–J, L–N, P, Q, R and S.
– From reference year 2018 to 2020: B–J, L–N, P–S, excl. S94
– From reference year 2021 onwards: B–N, P–S excl. S94

According to EU regulation 2019/2152 on European business statistics (EBS) and EU regulation 2020/1197 on technical specifications and arrangements (hereinafter referred to as EBS regulations) from reference year 2021, the population includes the data of financial enterprises (NACE sections B-S, excluding section O and division S94).

Reference population:

Until reference year 2020 the population covered the active enterprises defined in Commission regulation (EC) No 250/2009. The legal form of these companies included 1 enterprise with legal entity, 2 enterprises without legal entity and 7 other business organisations – according to Classification of Legal Forms of Enterprises (GFO).

In addition, from reference year 2015 onwards, the data of nonprofit business associations employing three or more persons in sections E, P and Q and of those employing 50 or more persons in sections A–D, F–J, L–N, R and S were also included in this survey. In 2015, the weight of nonprofit business associations within the entire population was as follows: number of organisations: 0.1%; turnover and value added: both 0.3% and the number of persons employed: 2.7%.

From reference year 2021, in accordance with EBS regulations, the reference population covers the market producers as defined by ESA 2010 – S.11 Non-financial corporations, S.12 Financial corporations, S.14 households as entrepreneurs (S14.1: Households as employers, S14.2: Own-account household producers)

Statistical unit:

Until reference year 2017 the statistical unit was the legal unit.

From reference year 2018, according to the international methodology (Council Regulation (EEC) No 696/93), a new statistical unit – enterprise – has been introduced. An enterprise is a part of an enterprise group, and is the smallest combination of legal units, which benefits from a certain degree of autonomy in decision-making. By monitoring the internal flows between individual members (i.e. legal unit) of the enterprise, consolidated data (off-group transactions) can be calculated in order to measure the national value creation processes more accurate.

For the reference period 2018–2020, both legal unit and enterprise level data are available in the national publication (Dissemination database).

The purpose of the Infra-annual performance statistics is to provide short-term indicators to show the development of the market for services. On the one hand, the data are needed by Hungarian users, chiefly for the calculation of quarterly GDP. On the other, regular data transmission are carried out for Eurostat as value and volume indices.

For the period 2021–2023, the STS Regulation 1165/98 as well as the EBS Regulation 2019/2152 and its implementing regulation (2020/1197) define the range of service sectors and aggregates to be provided to Eurostat.

In this period in the STS regulation defined divisions and aggregates (NACE rev.2) of services were published in every quarter-year based on the Quarterly performance statistics survey (OSAP 2236).

Data of legal units, required by the EBS Regulation were published monthly. Monthly performance data were prepared by model estimation, based on the Quarterly performance statistic survey (OSAP 2236) and the turnover data from the monthly VAT return as auxiliary.

Methodological change:

From the current year 2024, based on the EBS regulation and its implementing act (2020/1197) monthly data will be published at Kind-of-Activity Unit level with first reference period January 2024.

From 2024 the monthly value and volume indices sent to Eurostat includes the monthly data generated by model estimation from the OSAP 2236 Quarterly performance statistics survey and OSAP 2562.

Monthly performance statistics of Kind-of-Activity Units questionnaire, as well as designated non-industrial activities from the OSAP 2235 Monthly Report on Economic Statistics – Industry. According to the STS Regulation 1165/98, quarterly legal unit level data will be updated last time in 2024 Q2 after the annual revision. From 2024 Q3 the quarterly data of the time period 2019–2023 at legal unit level will be available as archived data.

Monthly data of the time period 2019–2023 at legal unit level will be available as archived data.

Data sources:

Quarterly performance statistics survey (OSAP 2236)

The "Agriculture, trade and services" questionnaire of the Quarterly performance statistics (OSAP 2236) is completed by a data supplier with at least 50 employees, which are fully observed, excepted the data providers of the OSAP 2562 Monthly performance statistics of Kind-of-Activity Units questionnaire, whose 3-month total sales turnover data is integrated into the quarterly observationThe "Agriculture, trade and Services – Simplified" questionnaire of the Quarterly performance statistics survey (OSAP 2236) is filled in by data suppliers with 5–49 employees, selected by representative sampling. The simplified questionnaire does not collect data on the capitalised value of self-produced assets, the value of materials used, services used as well as other services.

Monthly performance statistics of Kind-of Activity Unists questionnaire (OSAP 2562)

The Kind-of-Activity Units were designated by the experts of the Busines Statistics Department of the HCSO using the data from the T/2 table of the survey OSAP 2239 Annual performances and expenses of enterprises.

Monthly Report on Economic Statistics – Industry (OSAP 2235)

From 2024, the monthly data of the designated "Kind-of-Activity Units" in agricultural, commercial and service activities, selected from non-industrial activities will be taken over.

According to Eurostat regulations, the time series are also adjusted, netting out the seasonality and the calendar effect. Since January 2002, the time series adjustment has been carried out with the TRAMO/SEATS method using DEMETRA software. JDEMETRA+ 2.2.0 is currently used.

To specify the appropriate categories of SME (micro-, small- and medium sized enterprises and non-SME-s), the criteria referring to the number of persons employed, the financial ceilings (value of turnover and balance sheet total) and the status (autonomous, partner or linked status according to the consolidated amounts of the enterprise(s)) are taken into consideration based on the authorisation granted by Act XXXIV of 2004 on Small and Medium sized Enterprises and Commission Regulation (EC) 2003/361.

Definitions:

Kind-of-Activity Unit: The sales revenue of an economic organization can come from various activities classifies in the NACE Rev.2 classification system. These activities may differ from the organization's main activity. If the economic organization obtains a significant amount of sales revenue from its activity(s) out of its main activity, it will be distinguished during the statistical observation.

Turnover: the value of the products (finished and semi-finished), materials, goods and services sold in the current year, increased by price subsidies and surcharges, including registration, excise and public health taxes, reduced by discounts, excluding value added tax. This also includes the invoiced, VAT-free consideration of the supply of goods and services performed by the non-resident enterprise, or another Hungarian branch establishment of the non-resident enterprise.

Production value:
+ Turnover
+ Own production capitalised
– Goods purchased for resale
– Services purchased for resale
– Changes in inventories of own production.

Value added:
+ Production value
– Material and energy costs
– Costs of contracted services
– Costs of other services
+ Subsidies on products and production
– Taxes on products and production
– Excise duty recorded as other expenditure.

The above value added data include the balance of taxes on products and production and subsidies on products and production (value added at basic prices decreased by taxes and increased by the value of subsidies) and therefore differs from the value added data published in the National Accounts.

Number of persons employed: is defined as the total number of persons who work in the observation unit (inclusive of working proprietors, partners working regularly in the unit and unpaid family workers working regularly in the unit), as well as persons who work outside the unit who belong to it and are paid by it (e.g. sales representatives, delivery personnel, repair and maintenance teams). It includes persons absent for a short period (e.g. sick leave, paid leave or special leave), and also those on strike, but not those absent for an indefinite period. It also includes part-time workers who are regarded as such under the laws of the country concerned and who are on the pay-roll, as well as seasonal workers, apprentices and home workers on the pay-roll.

The number of persons employed excludes manpower supplied to the unit by other enterprises, persons carrying out repair and maintenance work in the enquiry unit on behalf of other enterprises, as well as those on compulsory military service.

Unpaid family workers refer to persons who live with the proprietor of the unit and work regularly for the unit, but do not have a contract of service and do not receive a fixed sum for the work they perform. This is limited to those persons who are not included on the payroll of another unit as their principal occupation.

Nonprofit organisation

Nonprofit organization: according to the international definition, an organisation must fundamentally comply with five criteria to be unambiguously classified as nonprofit:

 1. institutionalisation (separate legal personality),
 2. organisational independence from the government sector,
 3. public orientation,
 4. prohibiting dividend payments (or profit sharing), and
 5. voluntariness, autonomy.

Political parties or similar organisations are excluded.

Organisation features: nonprofit organisations – by their features – may be classified into three types.

 1. Classical civic organisations: private foundations, associations
 2. Interest representation organisations: public bodies (boards), trade unions, professional employer interest representations, professional associations;
 3. Other nonprofit organisations: public foundations, public benefit companies.

Calculated number of full-time employees: full-time (main job holder) employees plus the half of part-time (main job holder) employees and one tenth of non-main job holder employees. This indicator translates different employment types (full-time, part-time employees) into full-time employee units.

Calculated number of contract employees: a ratio of contracted and paid annual assignment fees to calculated full time employee average salary paid in the nonprofit sector. This calculated indicator expresses outsourcing (assignment contracts) related labour savings by replaced full time positions.

Calculated number of volunteer employees (CNVE): ratio of estimated annual volunteer working hours to annual working hours associated with a full-time employee. Estimated wage saving: multiplying CNVE with the annual average wage paid for a calculated full-time employee in the nonprofit sector. These calculated values express – through replaced full-time positions and wage amounts – volunteering related labour substitution.

Shared service center

Shared service center: an enterprise or part of it is a service center (including higher value-added business centers) if it carries out its activities (provision of business support services) within external enterprises or within its own enterprise group to support the parent company's main activity, even across borders.

Data source: OSAP 2444 Shared Services Center (SSC) performance report.

Reference population: NACE sections A–N, P–S

Startup enterprise

Startup enterprise: according to the statistical definition of the HCSO, enterprises are categorized as startup enterprises based on the following set of criteria: startup enterprises are registered business units whose net annual sales revenue does not exceed 100 million HUF; the number of full-time employees of the enterprise is not above 20; the enterprise has been established within seven years before the year of the data collection, the enterprise is either an independent enterprise (the founders have majority ownership rights and manage the operation of the enterprise) or a spin-off enterprise (established by a university, a public research unit or an enterprise for the market exploitation of research results). Furthermore, startup enterprises have innovation activities; their business is based on new, specific ideas or technologies. Startup enterprises usually target foreign markets and aim at high growth rate.

During data collection data providers specify the lifecycle the enterprise is found at. Four startup lifecycle stages are differentiated: 'brainstorming, seed stage', 'early stage', 'growth stage' and 'exit stage'.

Data sources: OSAP Report 2445 on the activities of startup enterprises: annual census survey of startup enterprises that are registered business units whose net annual sales revenue does not exceed 100 million HUF; the number of full-time employees of the enterprise is not above 20; the enterprise has been established within seven years before the year of the data collection.

The survey is a new, annual data collection within the framework of the Digital Welfare Program, as part of the control measurement process of the Digital Export Development Strategy's first pillar. The first data collection took place in 2020 about reference year 2019.

Observed units include: those registered and active enterprises that fulfil the set of startup criteria defined by the HCSO are surveyed for statistical purposes and either report their startup status in the OSAP 1032 (Basic information on the emerging economic organisations) survey, or have received the Hungarian Development Bank's venture capital grant for startups.

Activity of foreign affiliates (FATS)

Inward FATS

Observed sections of national economy (NACE Rev. 2):
– Until reference year 2017: B–N, excl K + S95
– From reference year 2018 to 2020: B–N, P–S, excl K, S94
– From reference year 2021 onwards: B–N, P–S, excl. S94

Foreign AffiliaTes Statistics (FATS) are according to regulation on NACE Rev.2 and to EU regulation 2019/2152 on European business statistics (EBS) and EU regulation 2020/1197 on technical specifications and arrangements (hereinafter referred to as EBS regulations) from reference year 2021 (regulation of the European Council on statistics of foreign affiliates was repealed).

FATS are intended to measure the effects and extent of ultimate foreign control over enterprises that reside in a particular country. Inward FATS observe companies engaged in business in Hungary under foreign control, while Outward FATS include data on companies operating abroad and controlled by Hungarian entities, as well as data on foreign-controlling enterprises and their domestic affiliates active in Hungary. FATS facilitate the comparison of the management and efficiency of Hungarian and foreign-owned affiliates. Foreign-controlled companies are to be classified according to the country of the ultimate controlling institutional unit.

Inward FATS statistics contain the number of enterprises, performance, investment, employment and R&D variables. Outward FATS comprise the number of enterprises and indicators of performance, employment and investment.

Data activity and geographical breakdowns are used for the compilation of inward FATS, based on the regulation on NACE Rev.2 and the regulation of the European Council on statistics of foreign affiliates. The basis of the geographical breakdown is the country register, the usage of which is regulated by Direction No. 2/1997 (SK 1) of the President of the Hungarian Central Statistical Office.

The compilation of inward FATS statistics is mainly based on secondary data processing. There are two methods to identify foreign ownership. For large enterprises, the 'Annual report on capital investment' (questionnaire No. 2168 in OSAP (National Programme for Statistical Data Collection)) conducted by the Central Bank of Hungary is applied, while for the non-surveyed units the information of tax return are used.

Data of annual performances of enterprises, investment and R&D statistics are used to produce quantitative indicators.

The country codes of enterprises having ultimate control over resident affiliates are available from different sources. Information are collected from EuroGroup Register (EGR) (developed by Eurostat) and Business Register Maintenance Survey. Unrevealed country codes of enterprises are searched on the internet or in case of small enterprises are imputed by mathematical methodology.

Inward FATS data are supplied to Eurostat and the OECD on annual basis. Eurostat publishes the data on its website.

The preparations for the obligatory data transmission (from the reference year 2007) was facilitated by the projects announced by Eurostat. In the frame of a PHARE project test data of inward FATS were prepared for the reference year 2003. Since then, inward FATS data is continuous.

Until reference year 2006 the data coverage was below 100%.

Outward FATS

Two voluntary surveys (OSAP questionnaires No. 2147 and 2148) were conducted to collect outward FATS data for reference years 2004 and 2005, which had a response rate of 50%. From the reference year 2007 onward, the National Bank of Hungary collects the data on the questionnaire "Annual direct investments".

Foreign direct investment enterprises

A foreign direct investment enterprise is an incorporated or unincorporated enterprise in which an investor resident in another economy owns 10% or more of the ordinary shares or voting power in an incorporated enterprise, or the equivalent for an unincorporated enterprise.

Data of Special Purpose Entities are excluded.

Source of methodology: Foreign direct investment enterprises: MNB (National Bank of Hungary), Budapest, 2014;

Source of data of foreign direct investment enterprises: MNB (National Bank of Hungary), Statistics Department.

 

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