Investment Opportunities in the Czech Republic
Protection of Foreign Investment
- Bilateral Investment Conventions Signed By the Czech Republic
- To date there were signed 77 bilateral conventions
- International Controversies Registered By UNCTAD
- Some disputes took place regarding TV NOVA (commercial TV) and IPB (bank)
- Organizations Offering Their Assistance in Case of Disagreement
ICCWBO , International court of arbitration, International chamber of commerce
- Member of the Multilateral Investment Guarantee Agency
Country Comparison For the Protection of Investors
|Czech Republic||Eastern Europe & Central Asia||United States||Germany|
|Index of Transaction Transparency*||2.0||6.3||7.0||5.0|
|Index of Manager’s Responsibility**||5.0||4.0||9.0||5.0|
|Index of Shareholders’ Power***||8.0||6.2||9.0||5.0|
|Index of Investor Protection****||5.0||5.5||8.3||5.0|
Source: Doing Business
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.
Procedures Relative to Foreign Investment
- Freedom of Establishment
- Acquisition of Holdings
- A majority holding interest in the capital of a Czech company is legal.
- Obligation to Declare
- submission of an initial application by the person intending to make the investment
- consideration of the application by the relevant government bodies
- following approval, an offer of incentives
- a formal application for the incentives by the person who will actually claim them – this may be a person other than the investor, e.g. a Czech subsidiary of a foreign investor set up following the offer of incentives
- final consideration and approval
This is valid for all sectors applying for state aid (investment incentives).
- Competent Organization For the Declaration
- Requests For Specific Authorizations
- Generally, there is no need to get an authorization before setting up a company, except in some sectors such as national defense, national security, nuclear energy, etc. In particular cases, companies have to contact the respective ministries. Investors shall contact CzechInvest, the agency of the Ministry of Industry and Trade of the Czech Republic, in order to get further information on investment matters.
Office Real Estate and Land Ownership
- Possible Temporary Solutions
As a temporary solutions could be used office rental usually in big cities, but also small cities offer such a place.
There are many business centres in the biggest cities (Prague, Brno, Ostrava). Most of them are owned and operated by commercial companies. For instance, CTP Invest .
- The Possibility of Buying Land and Industrial and Commercial Buildings
- Risk of Expropriation
- Usually it is not possible, but in public interest (highway construction) it is possible. Risk can be reduced through visiting locally relevant construction office which is responsible for urban development plan (so called uzemni plan). This plan identifies possible function of every ground for next several years, so be aware of fact that you can not build where ever you want.
- Forms of Aid
- income tax relief for up to 10 years for the establishment of a new manufacturing entity and for the expansion or modernization of an existing manufacturing plant,
- employment subsidies in the form of grants for the creation of new jobs and training, the amount of which depends on the unemployment rate in the region in which the investment is made,
- transfer of land at a discounted price
- Privileged Domains
- Manufacturing, technology centers
- Privileged Geographical Zones
- Not specified, but better subsidies have those regions having higher rate of Unemployment (Northern Moravia, Northern Bohemia)
- Free Zones
- Free zones with control type I in following cities: Ostrava, Cheb, Prague, Pardubice, Hradec Kralove.
- Organizations Which Finance
It is the agency of Ministry of industry and trade. Czechinvest is also intermediate body for all structural fonds interventions oriented on industry and trade.
- The Key Sectors of the National Economy
- Automotive, machinery, electronics, life sciences, airplane technique, IT,
- High Potential Sectors
- Information technologies, Software development, Life sciences
- Privatization Programs
- Tenders, Projects and Public Procurement
Ted - Tenders Electronic daily, Business opportunities in EU 27
DgMarket, Tenders Worldwide
Sectors Where Investment Opportunities Are Fewer
- Monopolistic Sectors
- Energy production
- Sectors in Decline
- Textile industry
Finding Assistance For Further Information
- Investment Aid Agency
Czech Invest representation abroad in Brussels (Belgium), London (UK), Paris (France), Hong Kong (China), Yokohama (Japan), Munich and Koeln (Germany), Chicago (USA).
- Doing Business Guides
Deloitte Business Guide
KPMG Investment Guide
Czech Republic Commercial Guide 2010 - Buy USA
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