Investment Environment

Czechia realizes that enterprise is one of the sources of creating the values and wealth of a society. Therefore it works systematically to create and improve a proper, simple, transparent and non-discriminatory business environment, including the environment for foreign investment, which has become an inseparable and essential part of the global economy.

 

Investment Climate

Increasingly, Czechia, which joined the European Union in 2004, is recognized as the optimal business environment from which to better serve international customers. This is a consequence of several factors – the most notable being the sustained enhancements to the business environment by the Czech Government and the ability of the country’s pre-eminent natural resource, intellectual capital, to respond to the needs of knowledge-based and innovation-driven businesses.

Moving forward, the record flows of foreign direct investment, the European dominance in computer production, the complete automotive supply chain, the track record in supporting global ICT operations, the burgeoning growth of Czech suppliers and the shift away from labour-cost-sensitive investments to high value added activities and extensive R&D as integral parts of global networks, are all pillars sustaining the Czech Republic’s growth and underpinning international competitiveness.

Czechia is one of the most successful CEE countries in terms of attracting foreign direct investment. Over 173,000 Czech firms across all sectors are now supported by foreign capital. According to the Czech National Bank, a total amount of EUR 77.8 billion worth of FDI has been recorded since 1993.

Investment Climate Brochure (PDF, 868 KB)

 

Main Reasons to Invest in Czechia

• Safe investment environment
• Skilled and well-educated workforce
• Favourable labour costs and price stability
• Central location in Europe
• Dense and high-quality infrastructure
• Transparent system of investment incentives
• Strong focus on R&D
• Stable social and political system
• EU membership
• Mentality, culture and attitudes similar to those of western countries
• High quality of life

 

Protection of Foreign Investment

Because Czechia allows foreign investors to make indirect investments, i.e. by means of capital interest in Czech corporations, as well as direct investments through their own companies or organisational components, the proper protection has to be ensured for the investment of foreign entities.

Czechia is a member of the Multilateral Investment Guarantee Agency (MIGA), an international organization for protection of investments, which is part of the World Bank-IMF group. The country has signed a number of bilateral treaties which support and protect foreign investments, for example with the United States, Germany, the UK, France, Austria, Switzerland, Italy, Belgium, Luxembourg, the Netherlands, Finland, Norway, Denmark and China.

The treaties provide that each party shall permit and treat investments and associated activities of the other party’s residents on a non-discriminatory basis, and guarantee full protection and security by law. Czechia has also concluded agreements for the avoidance of double taxation

Czechia’s entry into the European Union has greatly improved the enforceability of the rights and claims of foreign investors because European legislation has become directly applicable on Czech territory and binding for State bodies as well as private entities. The Czech legal environment has thus become accessible, but primarily has been aligned with the legal environment of the other EU Member States. Investors can rely on harmonised legal institutes and the identical legal rules they had known before only from their home countries or other Member States.

The legal regulations of investment protection and promotion in the form of international agreements are thus currently complemented with harmonised legal regulations concerning debt recovery, harmonised rules for determining jurisdiction, simplified procedures for official documents’ delivery and evidence proceedings and harmonised rules of European bankruptcy proceedings. This legal “dualism „of international and European law is combined with a quickly Europeanising Czech legislation.     

Debt recovery within the single market

Without exaggerating, it can be stated that cross-border debt collection within the framework of European Union Member States has never been simpler in the past than it is today. The free movement of persons, goods, services and capital has been complemented with the free movement of court decisions and official documents. Direct communication between judiciaries, the possibility to make submissions and submit applications and documents in several European languages and, primarily, the simplification of the legal rules of debt recovery and enforcement of rights has brought European national judicatures closer to creditors – investors.

Czechia has thus joined countries that have removed borders years ago in the area of the “transferability“ of rulings made by their own judicial bodies. Henceforth, Czechia treats rulings made by Courts e.g. in Italy, France, Germany and other EU Member States as its own, and the same applies in the opposite direction, a Czech ruling is equal to any decision issued by a Court of another Member State.  

The fact that a decision issued in a Member State can now be recognised and implemented in other Member States without the need of holding further lengthy proceedings, as well as the fact that bankruptcy proceedings overreaching into several Member States are subject to identical rules, not only significantly facilitates creditors‘ orientation in the otherwise often dense jungle of legal regulations, but in practice also enables legal specialists to exercise their profession regardless of State borders.

Last but not least, the aforementioned harmonisation helps to encourage cross-border business activities and thus eventually to create a single European area. Czechia, as a Member of the European Union, is actively involved in this process, is part of it, and continues to be one of its creators.

PP Agency, s.r.o.

 

Selected Investors

The change in the structure of foreign direct investment indicates a new trend in Czechia. The number of demanding projects in the fields of research, development and business support services is rapidly increasing. New investors as well as those companies that formerly only came to the country with a production programme are now transferring their higher-value-added development activities (technology centres and business support services centres) to Czechia.

Sector	Investor	Country of origin
AEROSPACE	GE Aviation Honeywell Aerospace Latecoere Textron UGMK	USA USA France USA Russia
AUTOMOTIVE	Hyundai Johnson Controls Robert Bosch Toyota/PCA Volkswagen	South Korea USA Germany Japan/France Germany
BUSINESS SUPPORT SERVICES	Accenture DHL SAP IBM Infosys	USA Germany Germany USA India
ELECTRONICS	ABB Bang & Olufsen Foxconn On Semiconductor Panasonic	Switzerland Denmark Taiwan USA Japan
ENERGY & ENVIRONMENT	Bilfinger Doosan Mavel Solar Turbines Vyncke	Germany South Korea USA USA Belgium
ADVANCED ENGINEERING	Bombardier Daikin Edwards Ingersol Rand Siemens	Canada Japan United Kingdom USA Germany
ICT	Microsoft NetSuite RedHat SolarWinds Tieto	USA USA USA USA Finland
LIFE SCIENCES	Lonza Nanotherapeutics Otsuka Pharmaceutical Sanofi Teva Pharmaceutical Industries	Switzerland USA Japan France Israel
NANOTECHNOLOGIES & ADVANCED MATERIALS	AGC FEI Company Fibertex Nonwovens A/S Saint-Gobain Toray Industries	Japan USA Denmark France Japan

 

Testimonials

“Edwards Company is very pleased with the continuous investment we have made in Czechia. The available infrastructure, quality of education, and the strategic location in the centre of Europe have all positively contributed to the growth of Edwards as a global market leader in its sector.” EDWARDS, UK

“Why the Czechia Recognised as an information technology hot spot for more than a decade, with a focus on investment and innovation. CzechInvest, the government’s investment and business development agency, is very supportive of global businesses locating to Czechia.” FNZ, UK

“Our investments in Czechia over the past 10 years have proven successful, not least because of the skilled and highly educated workforce, and we are looking to further extend and develop our presence in the country.” SENIOR PLC, UK

 

 

Investment in Czechia

Investment in the Czechia is a booklet published by KPMG in the Czechia to provide information to those interested in investing or doing business there. Its purpose is to provide some general guidelines to those considering investment or starting business in Czechia. 

 

Sources: CzechInvest and KPMG