incentives to investors

List of links on this page

• Production sector
• Strategic services and technological centres
  • Strategic services
  • Technology centres

production sector

RRA UK provides information to investors about National Investment Incentives Scheme offered by CzechInvest. as a sole organisation appointed to accept applications. National Investment Incentives Scheme on basis of Resolution No. 298/98, today on basis of Act on Investment Incentives No. 72/2000 Coll. as amended in January 2002 provides to foreign and domestic investors the following incentives:

• Corporate tax relief for up to ten years (newly established company) or partial tax relief for up to five years (already existing company);
• Industrial property (infrastructured) at a discount;
• Financial support for creation of new jobs;
• Financial support for retraining of new employees;
• Transfer of land owned by the Czech state at a discount.

• The investment must be made into manufacturing, either into hi-tech sectors (aviation, astronautics, transport means and facilities, P.C., I.T., electronics, radio communications, telecommunications, pharmaceutics), possibly into other manufacturing sectors under condition provided that the production line consists of machinery listed on a government-approved list of high-tech machinery and that the cost of this part of the production line is at least 50% of the total cost of the production line.
• The investment must be made into the acquisition of a new production plant or into the expansion of modernization of existing production facilities to launch a new production activity.
• The investor must invest at least 350 mil. CZK, in regions with high unemployment this requirement is reduced to 100 mil. CZK.
• Investment of at least 145 mil. CZK, in respect 50 mil. CZK must be covered by own investor´s equity.
• Investment into machinery must account for at least 40% of the total investment.
• The proposed production, construction, processes, activities and machinery must meet all Czech environmental standards.
• Acquisition of machinery within the investment cannot be started before the application form for investment incentives is submitted.

List of investors who, since establishment of the system in 1998 has been awarded investment incentive, amounts to more than 147 Czech and foreign companies.

CzechInvest elaborated an Investment Incentives Manual for Manufacturing sector, which will lead the interested party through the entire process from submission of the application to incentive acquirement. The manual contains review of basic rules associated with awarding investment incentive.

strategic services and technological centres

Beside investment support into the manufacturing sector CzechInvest supports also development of technology centres and strategic services from 2003. Newly introduced Framework Programme for Support of Strategic Services Projects and Framework Programme for Support of Establishment and Expansion of Technology Centres offer support in form of a subsidy for the business activity up to the level of 50% of investment costs and subsidy for training and re-training up to 35% of costs for special training and 60% of costs for common training. Main conditions of awarding the subsidies according to new program:

• Minimum level of investment 50 mil. CZK (in areas with high unemployment 25 mil. CZK) within 3 years.
• Creation of at least 50 new jobs within 3 years for persons with permanent residence on the territory of Czech Republic.
• Minimum 50% of turnover to be realized abroad.
• Minimum 25% of the investment must be covered with own equity.
• Maintaining investment for the period of 5 years.

• Minimum level of investment 15 mil. CZK within 3 years.
• Creation of at least 15 new jobs within 3 years for persons with permanent residence on the territory of the Czech Republic.
• Share of external employees of the centre must not exceed 40%.
• At least 25% of investment must be covered with own equity.
• At least 50% of the small project results and products shall be intended for export.
• Maintaining investment and jobs for the period of 5 years.

Here you will find the Manual for the Framework Programme for Support of Technology Centres and Centres of Business Support Services.