Czech Republic

The Czech Republic is an ideal destination for your investments with a combination of many favourable factors. Political, economic and corporate stability, skilled and cost-effective labour force as well as good infrastructure and strategic location providing easy access to western markets. All that offered by one of the most stable, wealthy and developed economies in the world. As EU member Czech Republic also contributes to the economy of the European Union regardless of the maintenance of its currency - the Czech crown.

Since the Velvet Revolution Czech Republic has opened up to foreign investments. Investments consist of consumer goods, IT products and services, aeronautics, automotive, pharmaceutical, other industrial productions and business services.

Czech Republic benefits from its abundant industrial history and many years of experience. Engineering has retained its importance and plays a key role, especially in the production of vehicles, the production of machinery and equipment, and manufacturing of metal structures and other products. The automotive industry is one of the most valuable and profitable sectors of the Czech economy. The dominant position on the market is undoubtedly held by Škoda Auto (more than 100 years of automotive history), a part of the Volkswagen Group. Furthermore, TPCA operates in the Czech Republic TPCA operates a car factory where Toyota, Peugeot and Citroën are produced. Last but not least, HMMC also has production of Hyundai in the Czech Republic.  Not only car production but also related sector such as tyre production (Continental Barum) have found their market place. With a high level of technical education and affordable workforce many research and development (R&D) programs were established to support and motivate international companies to set up a division in the Czech Republic. Nonetheless, other sectors of economic significance in the country include:

• Electrical Engineering and Electronics Industry which is the second most important industry after the automotive sector, the technical level of the products and services is world-class. For example, Honeywell has established a technology centre in Prague in cooperation with Czech Technical University, the Japanese company Panasonic is engaged in the production of television screens as well as research and the development of mechanical solutions and software. (Further examples of companies operating there: Danish company Bang & Olufsen, STMicroelectronics, ON Semiconductor, Siemens, etc.);
• ICT is a growing and dynamic sector that plays a crucial role in the Czech economy. This is confirmed by a strong inflow of high value-added projects from leading global companies like Microsoft, Skype, Tieto, Red Hat, SolarWinds, IBM, Cisco, Oracle, H2O.ai and MSD IT;
• Chemical industry spans petroleum refining, chemicals, pharmaceuticals and rubber and plastics processing;
• Pharmaceutical industry also plays a heavy role in the Czech economy, with considerable production capacity as well as research and development programs. Companies such as VUAB Pharma or Synthon conduct research further development here;
• Support services for businesses are represented by companies such as DHL, IBM, Accenture, Infosys and others.

These sectors are all continuously evolving to remain competitive in a global environment. To support companies operating R&D activities can benefit from a special tax deduction. Many more types of state aid are available to boost investments e.g. corporation tax relief for ten taxable periods, cash grants for job creation, cash grants for training and retraining of employees, etc. Investment promotion is one of important issues for the Czech Government, the CzechInvest agency was established by the Ministry of Industry and Trade to support business development and investment, ensuring the integrity of services and the ability to integrate global trends with regional conditions in the Czech Republic.

The growing competitiveness of the Czech economy is also reflected in the results of global rankings (conducted by Cushman & Wakefield) assessing several factors of suitability for the relocation of global manufacturers. The comparison takes into account geopolitical stability, long-term sustainability goals, market transparency and investment potential. Since 2016, when the Czech Republic was first included in the ranking, it has regularly ranked among the most suitable destinations where manufacturing companies could locate their operations.

To make sure investors take advantage of every possible measure to optimally implement their projects in the Czech business environment, our legal team readily provides its clients with professional legal services in establishing a comfortable starting position and provides them with continuous support throughout the entire lifespan of the project. Down to the slightest detail, our team focuses on common legal issues, but also specializes in many specific areas of law, including, but not limited to:

• banking & finance;
• insurance law;
• corporate compliance;
• financial regulation;
• energy law;
• insolvency and restructuring;
• telecommunication and media regulation;
• data protection regulation;
• capital markets;
• M&A;
• corporate law;
• real estate;
• litigation, arbitration and other proceedings;
• labour law;
• competition law;
• and more.

Our team does everything to fully understand and meet client’s needs and to make sure that the client understands every step of the process.