There is no doubt that investment incentives are an important instrument of attracting investors. Investment incentives really interfere in the natural function of the business environment, and can be partially credited with economic growth and encouragement of investments. The system of investment incentives was created as an instrument to encourage the flow of foreign direct investments counterbalancing the comparative incentives offered in neighbouring countries.
The system of investment incentives basically improves the Czech investment and business environment and makes it more effective, but it also plays an indicative and co-ordinating role. In addition to financial support, investment incentives include consultations and mediation. This applies especially to assistance in legal and other operations connected with the foundation of companies, visas, customs, assessment of influence on the environment, etc. During these operations it can be easy to identify obstacles to a smooth functioning of the investment and business environment in the Czech Republic.
The entire system of incentives has the form of immediate response to modern production and non-production trends. The flexibility of the system is taken as a positive aspect. The qualitative aspect of investments will be increasingly emphasized also in the future. This has already been indicated by the approval of programmes in support of strategic services and technological centres designed to secure the creation of production know-how and thus also prerequisites for the location of investments in the Czech Republic irrespective of cheap labour and similar factors.
We are certain that the Investment Incentives offered by the Czech Republic will encourage you to examine the great benefits that our country can offer your company. The Czech incentives scheme works on the basis of law (The Act on Investment Incentives). It was discussed with the European Commission and follows European rules on public support.
The System of Incentives package is very good described on the Czechinvest´s pages. That is why, it is described here in short form.
The incentives consist of:
income tax relief (“tax holiday”), for ten years in the case of the establishment of a new entity and five years in the case of expansion or modernisation of an existing manufacturing plant;
financial support for the creation of new jobs and retraining of employees: the amount of such financial support depends on the unemployment rate in the region in which the investment takes place;
transfer of sites with infrastructure at advantageous prices and/or transfer of agricultural and other kinds of land at prices determined in accordance with the Property Valuation Act;
exemption from customs duty and VAT on the import of technology (ie machinery).
Applicants for investment incentives are required to contact CzechInvest, the government agency charged with handling all applications for investment incentives.
Basic data on investment incentives as well as eligibility criteria in the particular sector you can find going to CzechInvest pages:
