Investment Opportunities in the Czech Republic Celje, September 17 th, 2012

mission CZECHINVEST Investment & Business Development Agency to support foreign direct investment to develop local companies to implement business-development programs to improve business environment Ministry of Industry and Trade CzechInvest Investment and Business Development Agency Source: CzechInvest, 2012

Priority Sectors (Investment Opportunities) High-Tech Manufacturing Sector:  Automotive, Aerospace  Electronics and Microelectronics  High-Tech Engineering, Nanotechnology  Biotechnology, Pharmacy and Medical Equipment  Renewable Energy and Cleantech Business Support Services:  IT & Software Development, Expert Solution Centres  High-Tech Repair Centres, Shared Services Centres  (HR, Accounting, Finances) Technology (Design) Centres:  Innovation Activities, Applied R&D Source: CzechInvest, 2012

CzechInvest in Numbers 1993 – 2011 Approved Projects (total) 1,798 New Jobs Created228,380 Total Investment Amount27,804 (USD million) Prestigious Awards14 Source: CzechInvest, Best Website among All Investment Promotion Agencies, World Bank (2 nd position in 2012) Inward Investment Team of the Year, Business Destinations Best Practices in Promotion Award, World Investment Forum Best Advertisement Promotion Agency in the EU Accession Countries European Investment Promotion Agency of the Year European Investment Promotion Agency of the Year

Investments by Country of Origin (total value) Source: CzechInvest, 2012

Investments by Sectors (total value) Source: CzechInvest, 2012

More Projects with Added-Value Source: CzechInvest, 2012 Note: MFG - Manufacturing Industry, SC – Service Centers, TC - Technology Centers

Major Investors - Manufacturing ╌ ABB (eng.+el.) ╌ BOSCH (aut.) ╌ CONTINENTAL (aut.) ╌ DAIKIN (eng.+el.) ╌ DENSO (aut.) ╌ FOXCONN (el.) ╌ HONEYWELL (eng.) ╌ HYUNDAI (aut.) ╌ IPS ALPHA (el.) ╌ KIMBERLY CLARK (med.) ╌ MAFRA (print.) ╌ MAGNA (aut.) ╌ NEMAK (aut.) ╌ PANASONIC (el.) ╌ SAINT GOBAIN (build.) ╌ SHIMANO (eng.) ╌ SIEMENS (el.+aut.) ╌ SYNTHOS (chem.) ╌ TEVA (phar.) ╌ TORAY (tex.) ╌ TOYOTA+PEUGEOT+CITROEN ╌ TRW (aut.) ╌ UNILEVER (food) ╌ VOLKSWAGEN (aut.) ╌ CATERPILLAR (eng.) ╌ JOHNSON CONTR OLS (aut.) Source: CzechInvest, 2012

MAJOR INVESTORS - Technology Centres ╌ AUTOPAL (aut.) ╌ BANG & OLUFSEN (el.) ╌ BOSCH (aut.) ╌ DENSO (aut.) ╌ EMERSON (el.) ╌ GE AVIATION (aero.) ╌ HONEYWELL (el.) ╌ INGERSOLL RAND ╌ LATECOERE (aero.) ╌ LONZA (bio) ╌ EATON (eng.)) ╌ MERCEDES-BENZ (aut.) ╌ OLYMPUS (med.) ╌ ON SEMICONDUCTER (el.) ╌ PANASONIC (el.) ╌ PROCTER&GAMBLE (chem.) ╌ RICARDO (aut.) ╌ RIETER ╌ SIEMENS (el.) ╌ VOLKSWAGEN (aut.) ╌ VISTEON (aut.) ╌ VALEO (aut.) ╌ EDWARDS (eng.) Source: CzechInvest, 2012

R&D Financial Support Tools ╌ Deduction of all R&D costs – companies can deduct R&D costs from their tax base and at the same time include them in eligible costs ╌ Grants from the National Research Programme ╌ Investment incentives to support companies setting up or expanding technology centres and centres for industrial R&D ╌ Grants from EU structural funds supporting the creation or extension of the R&D capacities and supporting innovative projects Czech Government supports R&D activities through the use of various tools: Source: CzechInvest, 2012

National Programmes: Ministry of Industry and Trade T.I.P. (Technology, Information Systems, Products) – supports R&D activities in companies and research institutions in order to encourage the creation and transfer of new technologies and innovations into industrial production ensuring its efficiency and competitiveness as well as sustainable economic, social and environmental development of the Czech Republic. Source: Ministry of Industry and Trade, 2012

Investment Incentives -- Act on Investment Incentives No. 72/2000 Coll., as amended Supported activities -- Manufacturing industry - Acquisition of a new or expansion of an existing plant -- Technology centres - Establishment or expansion of R&D centres -- Business support services centres - Establishment or expansion of shared service centres, SW development centres or high-tech repair centres Source: Act on Investment Incentives No. 72/2000 Coll.

Types of Incentives Following items summed up cannot exceed the ceiling of state aid -- Tax incentive -- Job creation grants -- Discounted price of land -- Cash grant on capital investment (in case of strategic investment) Granted above the ceiling of state aid -- Training and retraining grants Source: Act on Investment Incentives No. 72/2000 Coll.

Bilateral Technological Cooperation The objective of the programme is to support technological cooperation between enterprises from the Czech Republic and from a country outside the EU The project should result in production of high-tech products Areas of support:  Mechanical engineering  Electrical-engineering and electronics technologies  Information and communication technologies  Energy, sustainable and clean technologies  Agricultural and food-processing technologies  Biotechnologies  Medical technologies Source: CI internal documents

Structural funds Proposed operational programmes covering R&D to be implemented in the Czech Republic: Operational ProgrammeAllocation Enterprise and InnovationEUR 3,041.3 million Research and Development for InnovationEUR 2,070.7 million Education for CompetitivenessEUR 1,811.8 million Source: CzechInvest, 2012

OP Enterprise and Innovation Supports: ╌ Investment into R&D capacities of companies ╌ Creation of new (particularly innovative) companies ╌ Innovation ╌ Transfer of R&D results into practise ╌ Infrastructure for enterprise and innovation ╌ Cooperation between companies ╌ Consultancy and advisory services ╌ HR development ╌ Regeneration of brownfields ╌ Mediator: CzechInvest Source: CzechInvest, 2012

OP Enterprise and Innovation Programmes: Prosperity - supported activities include the establishment and further development of science and technology parks, business incubators, and technology transfer centres, as well as creation of a network of business angels which encourage the establishment and development of innovative firms. Potential - helps companies to set up and increase capacities necessary for the implementation of research, development and innovation activities. Source: CzechInvest, 2012

OP Enterprise and Innovation Programmes: Cooperation - is intended for those who want to cooperate with other companies in their branch and to establish cluster. This programme enables the improvement of mutual ties and the establishment of long-term, advantageous multilateral partnerships of firms, universities, research institutes, regional authorities and other institutions in the given region. Innovation – the programme contributes to the protection of intangible goods in the form of patents, utility models, industrial designs and protected trademarks. Source: CzechInvest, 2012

CzechAccelerator The objective is to support innovative Czech companies in developed foreign markets.

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