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Czech Republic Encouragement Laws
The Czech Republic is one of the most successful states in Eastern Europe in all that concerns attracting foreign investors.
The Czech Republic is particularly attractive to investors for the following reasons, among others:
An efficient infrastructure - principally in all that concerns the railway network that has been significantly improved and has direct links to most European centers.
A skilled work force - despite the reduction in economic output since 1945, it should be remembered that between the two World Wars, Czechoslovakia was ranked seventh in the world in respect of industrial development.
The work force is comparatively cheap if cost is compared to output.
A high credit rating - the Czech Republic has a very high credit rating in the world credit market compared to other Eastern and Central European states.
The following are numbered among the large overseas investors: Coca Cola, Volkswagen, Daewoo, Danone, Pepsi Cola,Siemens, Tesco and others.
Czech Investment Agencies
With the aim of encouraging foreign investment, an investment encouragement network was set up. The agencies provide assistance, among others matters, in:
Providing investors with information
Help in dealing with investment documents and facilitating bureaucratic procedures.
Locating a defined area for the investing company
Locating Czech investors / joint ventures.
Locating potential suppliers in the Czech Republic.
Accompaniment to the investment site.
Apart from the head office in Prague, there are offices in the following countries:
U.K. (London)
France (Paris)
U.S.A. (Chicago)
Germany (Dusseldorf)
Japan (Yokohala)
Assistance for Foreign Investors
In order help create employment, particulary in development areas in the Chech Republic, relief is offered for foreign residents making investments of czk 200 million or more in a new Cezch company or in a joint venture. At least 40% of the investment must be in new machinery.
The relief is as follows:
Tax relief - 10 years.
Grants per employee - to a maximum of US $ 5,700 for a new employee.
The amount of the grant depends on the development area.
Training grants - up to 50% of the cost of training.
Infra-structure supplied at low cost.
Exemption from customs duty on imported machinery and equipment.
Purchase of Real Estate - Foreign Resident
A foreign resident may purchase real estate in the Czech Republic after obtaining a business license and setting up a company with the Companies Registrar.
The incorporation may be in one of the following forms:
A public company, partnership, limited company, cooperative or stock company. It may be a new company or stock may be purchased in an existing company.
An individual who is a foreign resident may own real estate in the Czech Republic in any of the following instances:
By inheritance.
On purchasing real estate for a diplomatic representation.
Division of real estate on divorce, when one of the partners is a foreign resident.
Exchanging foreign-owned real estate in the Czech Republic with other real estate in the Republic.
Construction of a building when the land is already owned by a foreign resident.
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