Conference New Address for Your Business Strategická průmyslová zóna Holešov Alexandra Rudyšarová CEO CzechInvest

Strategic industrial zone Holešov New address for your business Conference about investment possibilities April 21 st 2010 Alexandra Rudyšarová CEO of the Investment and Business Development Agency CzechInvest

CZECHINVEST PRIORITY SERVICES ╌ Investment Incentives ╌ Business Properties Support ╌ Supporting Small and Medium-sized Enterprises ╌ Business Properties Identification ╌ Supplier Identification ╌ Supporting Research and Development ╌ Supporting cluster development ╌ „AfterCare“ services Source: CzechInvest, 2010

╌ State receives return of CZK 8.65 for every crown provided as an investment incentive ╌ State expenditures on incentives from 1998 to 2008: CZK billion; income: CZK billion ╌ According to Deloitte’s forecast, the state should earn another CZK 70 billion on incentives this year alone ╌ Incentives account for 308,000 new jobs, employing 9% of all workers in the Czech Republic ╌ Incentives have been granted to 486 projects with a total investment amount of CZK 357 billion INVESTMENT INCENTIVES DELOITTE STUDY

╌ Acquisition of a new plant or expansion of an existing plant ╌ Minimum investment within 3 years 100 mil CZK (app. 3.8 mil. EUR/5.4 mil. USD) (C) 60 mil CZK (app. 2.4 mil. EUR/3.2 mil. USD) (B) 50 mil CZK (app. 1.9 mil. EU/ 2.7 mil. USD) (A) ╌ At least half of the above minimum investment must be covered by own equity ╌ At least 60% from the total investment must be made into machinery ╌ Machinery equipment has to be new INVESTMENT INCENTIVES FOR MANUFACTURING - ELIGIBILITY CRITERIA

MINIMUM INVESTMENT – BY REGIONS GROUPMINIMUM INVESTMENT A 50 mil CZK/1.9 mil. EUR/2.7 mil. USD B 60 mil CZK/2.4 mil. EUR/3.2 mil. USD C 100 mil CZK/3.8 mil. EUR/5.4 mil. USD Valid: January 1–June 30, 2010

INVESTMENT INCENTIVES FOR MANUFACTURING: FORM OF SUPPORT Following items summed up cannot exceed the ceiling of state aid ╌ Tax incentive - New firms: corporate tax relief for max. 5 years - Existing firms: partial tax relief for max. 5 years ╌ Job creation grants - Offered in regions with the highest rate of unemployment only (A) ╌ Discounted price of land - the difference between the market price and the purchase price ╌ Training and retraining grants - Offered in regions with the highest rate of unemployment only (A) Granted above the ceiling of state aid

STATE AID MAP (2007–2013) REGIONSTATE AIDSUPPLEMENT Prague0% South-west 36% (2007–10) 30% (2011–13) Other regions40%

SELECTED EU FINANCIAL SUPPORT ╌ ICT and Business Support Services Programme ╌ Creation and Development of IS/ICT solutions and applications ╌ Acceptance of Registration Applications: – ╌ The min. amount of investment in long-term assets must amount to CZK 0.5/1/3 million and the min. number of newly created jobs is 10–40 (depending on the type of supported activity and on the size of the enterprise) ╌ Eligible costs comprise either tangible and intangible assets or two years’ gross wages (the investor can choose one option) ╌ Subsidy in the amount of CZK 1.5 – 150 million

SELECTED EU FINANCIAL SUPPORT ╌ Potential Programme ╌ Research & Development activities ╌ Acceptance of Registration Applications: – ╌ The min. investment in long-term assets used for the purpose of ensuring the activities of the project must amount to CZK 10 million (CZK 5 million in the case of SMEs) ╌ Subsidy in the amount of CZK 1–200 million ╌ Innovation Programme ╌ Innovation of product and processes ╌ Acceptance of Registration Applications: – ╌ Projects must use the results of research and development (development must already be completed at the time of submission of the application and this fact documented) ╌ Subsidy in the amount of CZK 1–150 million

SELECTED EU FINANCIAL SUPPORT ╌ EDUCA Programme ╌ Specific education of employees ╌ Acceptance of Registration Applications: – ╌ Aid is defined as a percentage of the project’s eligible costs – 25% of the total eligible costs (medium-sized enterprises – 35%; small enterprises – 45%) ╌ Subsidy in the amount of CZK 0.5–8 million ╌ Training centres Programme ╌ Construction, renovation and equipment of training centres and training rooms ╌ Acceptance of Registration Applications: – ╌ Subsidy in the amount of CZK 0.2–100 million

SELECTED EU FINANCIAL SUPPORT ╌ ECO-ENERGY Programme ╌ Utilisation of renewable and secondary energy sources and increasing efficiency during production, transfer and consumption of energy ╌ Acceptance of Registration Applications: – ╌ Subsidy in the amount of CZK 0.5–250 million

SELECTED EU FINANCIAL SUPPORT - only SMEs ╌ Development Programme ╌ Subsidies for technological equipment ╌ Acceptance of Registration Applications: – ╌ Subsidy in the amount of CZK 1–20 million ╌ Guarantee Programme ╌ Programme helps to obtain bank loans in order to implement business projects ╌ Acceptance of Registration Applications: – ╌ Subsidy is provided in the form of a favoured guarantee in the amount of up to 80% of the principal guaranteed loan

RECRUITMENT GRANTS FROM LABOUR OFFICES ╌ An employer can receive recruitment grants for creation of “socially beneficial jobs” based on an agreement with the labour office. “Socially beneficial jobs” are those working positions that must be filled with job seekers from the labour office register. ╌ In 2010, the contribution grants to “socially beneficial jobs” in district Kromeriz ranges from 50,000–60,000 CZK per job position. Source: Ministry of Labour and Social Affairs

╌ Comprehensive supplier linking activities – identify local partners (suppliers or joint-venture partners) for foreign companies ╌ Business property advisory services – (expansion or relocation within the Czech Republic) - identification of suitable industrial zones, lands, existing facilities, brownfields or office premises ╌ Organizing events – e.g. networking events, breakfast meetings with Ministers or regional governors, roundtables, supplier forums, seminars and workshops on specific topics like new legal regulations and its changes, visas and working permits, etc. ╌ Support to human resources – linking investors with international schools, Czech high schools and universities to e.g. align training programs or joint research projects) ╌ Support to visa and working permit procedure – legislation consultancies, direct arrangements for top managers and VIP persons CZECHINVEST AFTERCARE SERVICES

╌ CzechInvest has actively offered the Holesov Industrial zone to 43 foreign investors ( ) ╌ Automotive Industry, engineering and manufacture of plastics - these are the sectors that most companies consider investing in on the Holesov site ╌ The zone is open to a wide variety of projects - from 0,5 ha up to 200 ha, which is a great asset and a unique feature of Holesov ╌ Holesov enables new ways of doing business in the Zlin Region - incoming foreign investors will seamlessly blend with a healthy mixture of up-and-coming local companies CURRENT DISADVANTAGES ╌ 60 % of all investors seek leased premises - investors prefer leasing cheap and already standing halls to building their own premises ╌ Plzen, Usti and Central Bohemian region are again in the spotlight - the global economic crisis caused unemployment to rise even in these traditionally highly industrious region, which together with their geographic proximity to Germany and abundant available space in industrial parks made them very appealing to investor once again. Holešov Industrial zone

CzechInvest, the Investment and Business Development Agency, is an organisation of the Ministry of Industry and Trade of the Czech Republic Thank-you for your attention.