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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:

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.

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, at factor cost, contributes the most to the total value added of the enterprise concerned.

Size classes: from 1 January 2004, the HCSO uses the definition of the number of persons occupied instead of the number of employees. In the case of sole proprietors, the number of persons occupied consists the sole proprietors as well as the helping family members. If a registered sole proprietor only has data on the number of employees, the number is transformed into data on the number of persons occupied by adding 1. If in case of the companies and partnerships there are only available data on the number of employees, they are currently not transformed.

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: 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.

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 at: (20.1.1.11. STADAT table).

Definitions

Registered enterprises: units which, according to administrative registrations, legally exist at the date of survey and have a tax number, including those under bankruptcy, liquidation and dissolution proceedings at the reference date.

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.

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.

Survivor enterprises: an enterprise is considered to have survived if it is active in the year of birth and the following year(s), or is also considered to have survived if it ceased to be active, but its activity has been taken over by another enterprise.

The grouping of business units by legal form (abbreviation: GFO) is based on the classification in force from 15 March 2014. The classification of business units by legal form was published in Regulation 21/2012 (16 April) KIM on the elements and nomenclatures of the statistical code.

Source of data: for registered and active enterprises the source of data is the Business Register (BR) of the Hungarian Central Statistical Office. In the case of Business Demography, the data the BR are completed with are the information of different statistical data collections and administrative sources (e.g. Tax and Financial Control Administration).

Annual performances and expenses of enterprises

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

Reference population: market producers of Nace sections A–J, L–N, P, Q, R, and S.

Legal forms involved in the observation:

1 enterprise with legal entity

2 enterprises without legal entity

7 other business organisations

In addition, from 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 are 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 at factor cost: both 0.3% and the number of persons employed: 2.7%.

The reference population covers the active enterprises defined in Commission Regulation (EC) No 250/2009.

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 the STS regulation, defined divisions and aggregates (NACE rev.2) of services are published in every quarter-year based on the Quarterly performance statistics survey (OSAP 2236), while the data required by the EBS Regulation are published monthly.

Monthly performance data are prepared by model estimation, based on the Quarterly performance statistic survey (OSAP 2236) and the turnover data from the monthly VAT return as auxiliary.
 

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.

The "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.

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:

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 at factor cost:
+ 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)

Foreign AffiliaTes Statistics (FATS) are intended to measure the effects and extent of ultimate foreign control over economic branches in a particular country. Inward FATS observe companies conducting business in Hungary under foreign control, while Outward FATS include data on companies operating abroad and controlled by Hungarian entities. 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 as well as indicators of performance, investment, employment and R&D. Outward FATS comprise the number of enterprises and indicators of performance and employment.

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 ways to define foreign ownership. For large enterprises, the 'Annual report on capital investment' (questionnaire No. 2168 in OSAP (National Programme for Statistical Data Collection)) is used, issued by the Central Bank of Hungary, while in the case of the others we use tax returns.

We take over the values of data from statistics on the annual performances of enterprises, investment statistics (annual integrated business statistics, 9 OSAP questionnaires and R&D statistics (OSAP questionnaire No. 1074)).

The country codes of enterprises having ultimate control over resident affiliates are available in different ways. First, we take the information from the EuroGroup Register (EGR) or we collect them through the annual integrated business statistics questionnaires. We either search for the missing data on the internet, or for the small enterprises we impute them by mathematical methodology.

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

The preparations for the obligatory data transmission (from the reference year 2007) was facilitated by the tenders announced by Eurostat. In the frame of a PHARE project we compiled our first test data of inward FATS for the reference year 2003. Since then, inward FATS data have been compiled every year.

We have compiled inward FATS data from already existing data sources. The only exceptions were the country codes of enterprises having ultimate control on a resident affiliate, which we searched for the data on internet. We could not find for the country codes of the whole population, so until 2006 the coverage is not 100%.

We used two voluntary surveys (OSAP questionnaires No. 2147 and 2148) for reference years 2004 and 2005 to collect outward FATS data, which had a response rate of 50%. From the reference year 2007 onwards, the National Bank of Hungary collets the data by the questionnaire "Annual direct investments".

 

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