1. 1 Business and Investment Opportunities in the Czech Republic 31-03-2009 Petr Pavlík

2. 2 2 General View  The Czech Republic is a small and highly open economy.  Foreign trade is a decisive factor for economical growth. (In 2008 compared to 1993 the trade balance turnover was app five times higher)  Presently Czech Republic  exports three fourth of its production  has become one of the most export-oriented countries in the EU (exports more than Finland o Greece, Luxembourg and Slovak Republic together)  is one the most attractive country in EU for foreign investors  Czech firms get more and more stabile position on the world markets

3. 3 3 Sectors with the highest share of exports  Machines and transport vehicles  road vehicles  industrial machinery  electrical devices / appliances  Energy generation technologies  biomass boilers, generators, hydraulic turbine  Chemical products  Tires, plastic and rubber products  Metallurgy products  iron and steel semifinished materials

4. 4 Trade and Investment – Institutional Framework  Ministry of Industry and Trade  * Trade Promotion  CzechTrade Agency  * Investment Attraction  CzechInvest Agency 4

5. 5 5 Trade Promotion - CzechTrade CzechTrade is a pro-export organization, the subsidy of the Ministry of Industry and Trade of the Czech Republic. Established in 1997 33 Offices worldwide Services → Exporting from the Czech Republic ISO 9001 certified as from october 2002

6. 6 6 Doing Business - CzechTrade  MISSION To contribute to the export growth of our clients through our professional services.  VISION To be the first choice for Czech companies when penetrating and developing international markets.

7. 7 7 Export success Individual assistance abroad Consultancy and Education Export Information Structure of CzechTrade services

8. 8 8 CzechTrade services  Free of charge and confidential services to help your company find Czech suppliers and business partners  Represent a reliable and time and money-saving way of building your business relationships   Encouraging alliances of SMEs  Supporting industrial design and innovation  Promoting czech industry through fairs and exhibitions

9. 9 9 Your Czech Supplier  Are you looking for a new supplier?  Your Czech Supplier is an exclusive on-line service that links you direct with suppliers in the Czech Republic.  Information and registration forms on  www.czechtradeoffices.com/supplier

10. 10 Czech Industrial Partner Search  Are you interested in outsourcing or long-term business cooperation?  CzechTrade saves you time, money and help you select the right business partner. We carefully research your requirements, offer you a portfolio of reliable industrial partners and help you establish long-term partnership.  www.czechtradeoffices.com/cipas

11. 11 Business Visits  Follow-up service of YCSupplier service and CIPASearch.  CzechTrade can organise an individual or a group buyers´ visit in the Czech Republic.  We will set up meetings, arrange itineraries  and help you with planning your business visit.  Contact our headquarters in Prague or your nearest CzechTrade office abroad for further details.

12. 12 Czech Exporters Directory Company database  Regularly updated  Search by name, region, sector products,services  EN, DE, RU version  available on-line http://exporters.czechtrade.cz

13. 13 Export Alliances  Partnership for complex solutions.  CzechTrade initiates formation of Czech exporters´ field alliances.  Czech Water Alliance  Czech Water Technologies  Czech Extraction and Mining technology  Czech ICT Alliance  Czech NBC Team  Czech Space Alliance  Czech Health & Safety Alliance   http://alliances.czechtrade.cz  Fashion Point Alliance  Czech Surfacing Alliance  Czech Valves Alliance  Czech Energy Team

14. 14 Business Information  Government business portal  provides a wealth of information  for companies that are looking for guidance,  assistance and business in the Czech Republic.  www.BusinessInfo.cz/en

15. 15 Czech Republic: On-line Oficial website of the Czech Republic  www.czech.cz www.czech.cz  Business Info  www.businessinfo.cz  National Statistics Institute  www.czso.cz  Companies Register  www.justice.cz  Fairs of Brno  www.bvv.cz

16. 16 The Czech Republic is one of the most successful transition economies in terms of attracting foreign direct investment. Over 130,000 Czech firms across all sectors are supported by foreign capital. Since 1993, more than USD 50 billion in FDI has been recorded. Strategic Location Stable Economic Performance Educated Workforce Competitive Infrastructure Investment Incentives Supplier Base Developed Real Estate Market Quality of Life CzechInvest's Support Why Invest in the Czech Republic

17. 17 Main objective = to advise and support existing and new entrepreneurs and foreign investors in the Czech Republic. Established in 1992 9 Foreign and 13 Regional Offices System of quality management was certified by Quality Austria in accordance with ISO 9001:2000 Services focused on:  Investments with high added value  Development of clusters  Research and development activities Investment Attraction - CzechInvest

18. 18 CzechInvest provides the following services free-of-charge:  Comprehensive services for investors  full information assistance, handling of investment incentives, business property identification, location of Czech suppliers,  aftercare services  Business infrastructure development  Access to structural funds CzechInvest Services

19. 19 National incentives scheme - the Act on Investment (n°72/2000 Coll.) Tax incentive Corporate tax relief for up to 5 years for new companies Partial tax relief for up to 5 years for existing companies Job creation grants Financial support for creation of new jobs Training and retraining grants Financial support for training new employees Site support Transfer of public land at a favourable price National Incentives Framework

20. 20  Priority Sectors Automotive Industry Aerospace Industry Precision Engineering Electronics and Electrical Engineering Life Sciences Medical Devices and Engineering IT and Software Engineering R & D  Czech Republic offers to investors:  - strong industrial tradition  - high-qualified workforce in the field of engineering  -linguistic capacity and widespread knowledge of English Financial Support for Investment

21. 21 Support is directed to production activities in manufacturing industry (investment incentives) and to investments into progressive technologies and activities with high added value and strong export potential. 1/ Incentives for manufacturing industry 2/ Technology centres Support is provided up to the amount given by the Regional Map of State Aid Intensity. The actual amount therefore depends on investment’s location; small enterprises are awarded by 20% bonus, medium enterprises by 10% bonus. Financial Support for Investment

22. 22 Regional Map of State Aid Intensity (% of deductible costs) Financial Support for Investment

23. 23  Offered incentives  Corporate tax relief  Full tax relief for 5 years (newly established companies)  Partial tax relief for 5 years (expanding companies)  Job-creation grants  50,000 CZK per employee in the regions worst affected by the unemployment (A)  Training and re-training grants  35% of training and retraining costs in the regions worst affected by the unemployment (A)  The total amount of the mentioned investment incentives (with the exception of training and re-training grants) must not exceed 40% (50% in case of medium enterprises, 60% in case of small enterprises) of the investment made into long- term tangible and intangible assets. Incentives – manufacturing industry

24. 24  Eligibility criteria  A B C  Minimum investment (mil. CZK) 50 60 100  Minimum coverage by own equity 25 30 50  (mil. CZK)  Minimum % of the total investment 60 60 60  into machinery Incentives – manufacturing industry

25. 25  Supported through the system of programmes approved by a government resolution within the strategy of support to projects in progressive technologies and activities with high added value and strong export potential.  Technology Centers  -focused on the development and innovation of high-tech products and technologies, including the development of specific software and applications which are a part of these products and technologies  Business Support Services Centers  - engaged in the selected activities of companies, which are characterized by their close ties to information technologies and distinct international focus, in particular:  shared services centers,  high-tech repair centers,  software development centers,  ICT expert and solution centers. Incentives – Technology Centres and Business Support Services Centres

26. 26 The most important investment projects CompanyCountry of Origin Total investment (in mil. USD) sector Hyundai Motor Manufacturing CzechSouth Korea 1 222 automotive Toyota Peugeot Citroën Automobile CzechJapan/France 850 automotive Škoda AutoGermany 562 automotive Mondi Packaging Paper Štětí a.s. Netherlands 394 paper Nemak EuropeMexico 317 automotive Denso Manufacturing CzechJapan 255 automotive Bosch DieselGermany 238 automotive Panasonic Mobile and Automotive System Czech Japan 235 electronics ChemopetrolCzech 219 chemical DHL Information Services EuropeGreat Britain 190 IT Source: CzechInvest, 2008From 1993 to 2007

27. 27 CzechTrade Office in Spain C/Apolonio Morales n°6, 305-A 28036 Madrid Tel.: 91 571 86 15 Fax: 91 572 29 50 E-mail: madrid@czechtrade.cz www.czechtrade.org.es Petr Pavlík Thank your for your attention. Agencia de Promoción de la República Checa