a small country, with a population of about 10 million, the Czech
Republic has a decisive role in Central and Eastern Europe concerning
its geographic location and economic strength.
Czech Republic is a fully fledged parliamentary democracy and one of
the most advanced among CEE countries. Its economic policy is consistent
the Czech Republic is the second biggest trading partner of China in
the Central and Eastern European region, and China has been the Czech
Republic's largest trading partner outside the European Union.
open investment climate is a key element of the Czech Republic’s
economy. The Czech Republic has attracted a large amount of foreign
direct investment (FDI) since 1990, making it the most successful CEE
country in terms of FDI per capita.
country’s investment grade ratings from international credit-rating
agencies and its early membership in the OECD testify to its positive
to the 2017- 2018 Global Competitiveness Report published by the World
Economic Forum, the Czech Republic ranks 31st among 137 world economies
in terms of competitiveness.
Czech Republic is characterized as a mature host country for FDI with
low inflation, modest interest rates, a stable currency and a good rate
of economic growth providing favorable conditions for investors.
Summary of the key advantages of the Czech
• Central Location with very competitive costs in comparison to western EU countries
• Innovation & applied research capacities
• Transparent investment incentive policy
• Highly skilled, high-quality pool of labor talents
• A well-developed supplier base
• Strong presence of major leading international companies
• Long Industrial tradition
• Support from the CzechInvest
• Superior quality of life
FDI Trend in the Czech : Services Surpass Manufacturing
structure of FDI inflow into the Czech Republic has been changing
substantially and the trend is expected to strengthen in the coming
years. The Czech Republic is experiencing the introduction of a new,
very valuable type of economy, as investments in research and
development and business support services in the country have outweighed
those in manufacturing projects in recent years.
sectors of Czech economy are automotive industry, electronic industry,
new materials, nanotechnology, aerospace industry, environmental
protection and life science.
heritage of the country is strong and still forms Czech economy. 65 %
of GDP comes from the industry. Roughly 85 % of Czech production is
being exported, mainly to Germany which is the main economic partner of
the Czech Republic.
Republic is very advanced in autonomous driving and artificial
intelligence (word Robot being of the Czech origin), very strong in
cyber security (Company AVAST has one third of global market share),
life science (contact lenses are Czech invention), nanotechnology (using
a breakdown index of Nanotechnology Specialization, the Czech Republic
is on the 4th place in the world; compared to China, Japan, Germany,
Korea, UK, and USA, the Czech Republic comes 3rd just after Korea (USA
is the leading country)) and many others.
In the last years 41 new R&D centers have been established in the Czech Republic with total cost of 21 billion Yuan.
Huge international companies invested in Czech in R&D projects, namely Honeywell, GE Aviation, BMW and many others.
Czech Republic is a member of the Multilateral Investment Guarantee
Agency (MIGA), an international organisation for protection of
investments, which is part of the World Bank-IMF group. The country has
signed a number of bilateral treaties which support and protect foreign
investments with China. The Czech Republic has also concluded agreements
for the avoidance of double taxation.
Czech crown is fully convertible. All international transfers (e.g.
Profits and royalties) related to an investment can be carried out
freely and without delay. Chinese legal entities may acquire real estate
in the Czech Republic without any restrictions and under the same
conditions as Czech legal entities.
Financial Support for Investment
Czech Republic offers both new and existing investors support covering
up to 25% of costs associated with investment projects. Aid is provided
mainly from the national investment-incentives scheme. Certain
activities, for example establishment of R&D centres, innovation
activities and ICT and software development, can be also supported from
EU Structural Funds.
incentives are offered in forms of tax incentives, job-creation grants,
cash grants for capital investments or property-tax incentive for
establishment or expansion of projects in the following areas:
centres； Business support services centres – software-development
centres, shared-services centres, high-tech repair centres, data centres
and customer support centres (call centres)
Belt and Road
the Czech has fully pledged to the Belt and Road initiative. Czech
President, Mr. Milos Zeman said the Czech welcomes Chinese enterprises
to invest and start new businesses and is willing to further enhance
dialogue and coordination between the two governments and actively take
part in the Belt and Road construction. During the CIIE in Shanghai in
2018, both presidents have met 5 times. Xi said China looks forward to
Czech Republic’s continuing contribution to the development of
China-Europe relationship and is willing to enhance cooperation with the
Czech under the framework of China-CEEC cooperation and jointly
safeguard and build an open world economy. Both presidents also fully
expressed their firm opposition to unilateralism and protectionism.
Chinese investment in the Czech
quote president of the Czech Republic, Mr. Miloš Zeman, Czech Republic
is becoming an unsinkable ship of the Chinese investment in Europe and
Czech is a perfect gateway to European market.
of a total of 12 sectors, Automotive Components accounted for 30.3% of
projects. Project volume in this sector peaked during 2016, with four
projects tracked. Total jobs creation and capital investment in this
sector was 2,340 jobs and EUR 244.39 million respectively.But there are
many new projects in various sectors covering areas of electronics,
artificial intelligence, development of 5G network and many others.
Several Case Studies. Changhong’s
investment project in Czech: Sichuan Changhong Electronics (Mianyang,
China) is invested in the city of Nymburk nearby Prague already in 2007,
in the Consumer Electronics with focus on both assembly of the
television sets. After gaining more experience at the Czech market
company has upgraded the facility and will develop new products for the
European market and focus on the improvement of after-sales services.
The company has 300 employees and investment was around 38 mil EUR.
Changhong values Czech Republic is because of its profound industrial
base, superior location and labor cost advantage. Even though we know
that Czech Republic is a small country, but we also believe Czech
Republic is the gate for us to serve the 500 million population of
whole European market.” Mr.Lian Yongping, General Manager of Changhong
YAPP CZECH AUTOMOTIVE Co., s.r.o.YAPP
Automotive Systems Co., Ltd is a global fuel system supplier
specialized in R&D, manufacturing and marketing of automotive fuel
systems: Yapp Czech Automotive Systems, a subsidiary of YAPP Automotive
Parts (Yangzhou, China) invested in 2012 in the city of Mlada Boleslav,
Czech Republic in the Automotive Components sector in a Manufacturing
project which was their first. Yapp Czech Automotive Systems, a
subsidiary of China-based plastic fuel tank manufacturer YAPP Automotive
Parts, expanded their operations with a new production facility in
Mlada Boleslav, Czech Republic. They manufacture plastic fuel tanks
which are highly . There were many reasons why we chose Czech Republic
as our production facility in Europe. Key factors which we considered
were proximity to our key clients in Germany, long tradion in automotive
field and high quality of the workforce in the Czech Republic.
Government support from the CzechInvest proved to be a great help with
the successful start of the operations and we the further expansion of
our activities.“ Cui Long Feng, Vice President of YAPP Automotive
2016 – Foxconn, a subsidiary of Hon Hai Precision Industry into Czech. Foxconn, a subsidiary of Hon Hai Precision Industry invested in the
city of Kutna Hora, Czech Republic in the Electronic Components sector
in a Manufacturing project.
a consumer electronics manufacturer and a subsidiary of Hon Hai
Precision Industry, plans to expand its plant in Kutna Hora, Czech
Republic. The firm will invest 2 billions of Yuan and create 2000 jobs
as part of an expansion of its business in the country, which includes
investments in Pardubice and Kutna Hora as well as previously announced
data centre and R&D centre projects.