Basic Information • Macroeconomic Data • Foreign Trade • Foreign Direct Investment Anti-recession Measures • Legislation • Sources 16.06.2022 Basic Information 1 Ministry of Industry and Trade Ministry of Industry and Trade www.mpo.cz Czech Republic Czech Republic – – Your Partner Your Partner
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Basic Information • Macroeconomic Data •
Foreign Trade • Foreign Direct Investment
Anti-recession Measures •Legislation • Sources
19.04.2023
Basic Information
1
Ministry of Industry and TradeMinistry of Industry and Tradewww.mpo.cz
Czech Republic – Czech Republic – Your PartnerYour Partner
Basic InformationBasic InformationCzech Republic in GeneralCzech Republic in GeneralCultural HeritageCultural HeritageCzech SpasCzech Spas
Basic Information • Macroeconomic Data •
Foreign Trade • Foreign Direct Investment
Anti-recession Measures •Legislation • Sources
19.04.2023
Basic Information
3
Czech Republic in GeneralCzech Republic in General
AreaArea 79,000 km79,000 km22
LocationLocation in the very heart of Europein the very heart of EuropePopulationPopulation 110.2 million (94% Czech)0.2 million (94% Czech)Political systemPolitical system parliamentary democracy parliamentary democracy Head of state Head of state ppresident Václav Klausresident Václav KlausCurrency Currency (CZK, koruna)(CZK, koruna)
Macroeconomic DataMacroeconomic DataOverview of the Czech EconomyOverview of the Czech EconomyGross Domestic ProductGross Domestic ProductIndustrial OutputIndustrial OutputInflationInflationEmploymentEmployment
Basic Information • Macroeconomic Data •
Foreign Trade • Foreign Direct Investment
Anti-recession Measures •Legislation • Sources
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Macroeconomic Data
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Overview of the Czech Economy…Overview of the Czech Economy…
Main characteristicsHigh economic growth in recent years – gradual catch up with the average EU GDP level (77% of EU 27 level in 2008)
Big share of manufacturing sector
Small, open economy
Strong trade and ownership links with EU
Basic Information • Macroeconomic Data •
Foreign Trade • Foreign Direct Investment
Anti-recession Measures •Legislation • Sources
19.04.2023
Macroeconomic Data
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……Overview of the Czech EconomyOverview of the Czech Economy
Fast and balanced real convergence
Low inflation
External balance – trade surplus and modest current account deficit
Fiscal prudence – reduced public deficit (1,2% GDP in 2008), moderated public debt (29,4% GDP)
Basic Information • Macroeconomic Data •
Foreign Trade • Foreign Direct Investment
Anti-recession Measures •Legislation • Sources
19.04.2023
Macroeconmic data
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Gross Domestic Product..Gross Domestic Product..
Peak in the half 2006 (6.9% growth)
Still good results for 2008 with significant deterioration in 4.Q 2008
2.8% growth in 2008
Czech economy in recession – contracting in two consecutive quarters: in the forth quarter 2008 (-0.1% q/q) and in the first quarter 2009 (-3.4% q/q)
Basic Information • Macroeconomic Data •
Foreign Trade • Foreign Direct Investment
Anti-recession Measures •Legislation • Sources
19.04.2023
Basic Information
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……Gross Domestic ProductGross Domestic Product
Signs of recovery: 0.1% growth (q/q) in the second quarter 2009
The outlook for this year is influenced by weak demand in the euro zone with negative impact to the Czech exports
Agriculture Manufacturing IndustryBuilding Industry Mineral Wealth MiningElectricity Production and Distribution TourismServices
Basic Information • Macroeconomic Data •
Foreign Trade • Foreign Direct Investment
Anti-recession Measures •Legislation • Sources
19.04.2023
Macroeconomic Data
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Industrial OutputIndustrial OutputFlat growth in 2008: 0.4% y/y growthImportant share of automotive industry (23%)Falling down since October 2008 (in 1st quarter 2009 -19.1% y/y, in 2nd quarter 2009 -18.8% y/yNew orders falling dramatically downBut signs of stabilisation in recent monthMain reasons - poor external demand, decreasing domestic demand, slowdown in private investment
Basic Information • Macroeconomic Data •
Foreign Trade • Foreign Direct Investment
Anti-recession Measures •Legislation • Sources
19.04.2023
Macroeconomic Data
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Industrial OutputIndustrial OutputIndustrial Production
(y/y changes)
-30
-20
-10
0
10
20
30
40
2005
/ 1. 2.
3.
4.
5. 6.
7.
8. 9. 10.
11.
12.
200
6/1. 2.
3.
4.
5. 6.
7.
8. 9. 10.
11.
12.
2007
/1.
2.
3.
4.
5. 6. 7.
8. 9. 10.
11.
12.
2008
/1.
2.
3.
4.
5. 6. 7.
8. 9. 10.
11.
12.
2009
/1.
2. 3. 4.
5. 6.
base idices trend (average month 2005=100) industrial production not SA industrial production trend
Foreign TradeForeign TradeOverviewOverviewForeign Trade in Current PricesForeign Trade in Current PricesForeign Trade by Regions 2008 - USDForeign Trade by Regions 2008 - USDForeign Trade by Regions 2008 - EURForeign Trade by Regions 2008 - EURForeign Trade by Regions 2009 - USDForeign Trade by Regions 2009 - USDForeign Trade by Regions 2009 - EURForeign Trade by Regions 2009 - EURExports in 2008 - 2009Exports in 2008 - 2009Imports in 2008 - 2009 Imports in 2008 - 2009
Basic Information • Macroeconomic Data •
Foreign Trade • Foreign Direct Investment
Anti-recession Measures •Legislation • Sources
19.04.2023
Foreign Trade
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OverviewOverview
Still good results for 2008 - 69.4 bill. CZK (2.7 bill. EUR) trade surplusExport and import falling down since October 2008New foreign orders falling dramatically down - mainly in the car industryMain reasons - in the first half of 2008 - extremely strong CZK, since the second half - decreasing external demandSigns of stabilisation and improving external demand in recent months
Basic Information • Macroeconomic Data •
Foreign Trade • Foreign Direct Investment
Anti-recession Measures •Legislation • Sources
19.04.2023
Foreign Trade
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Foreign Trade in Current PricesForeign Trade in Current PricesForeign Trade
(current prices, y/y change in %, balance in bill. CZK)
Foreign Direct InvestmentForeign Direct Investment
Inward Foreign Direct InvestmentInward Foreign Direct InvestmentInvestment Opportunities - Year 2009Investment Opportunities - Year 2009Investment Incentives SchemeInvestment Incentives Scheme
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Foreign Trade • Foreign Direct Investment
Anti-recession Measures •Legislation • Sources
19.04.2023
Foreign Direct Investment
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Inward Foreign Direct InvestmentInward Foreign Direct InvestmentInflows of FDI (mill. EUR, mill. USD)
Investment Opportunities - Year 2009…Investment Opportunities - Year 2009…
Traditional Sectors of Czech IndustryAutomotive and Aerospace Industry
Electronics
Precision Engineering
Chemicals and Plastics
Sectors with High Potential for the FutureNanotechnology
Biotechnology, Life Sciences and Medical Devices
Renewable and Alternative Energy
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Foreign Trade • Foreign Direct Investment
Anti-recession Measures •Legislation • Sources
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Foreign Direct Investment
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Investment Opportunities - Year 2009…Investment Opportunities - Year 2009…
High-tech servicesInformation and Communication Technologies, Software DevelopmentStrategic Services – Shared Service Centres, Expert and Solution Provider Centres, High-tech Repair Centres
Research and DevelopmentInnovation Activities and Applied R&D
Tax System of the Czech RepublicTax System of the Czech RepublicTax Rates in the Czech RepublicTax Rates in the Czech RepublicThe Main Indirect TaxesThe Main Indirect TaxesLegal RequirementsLegal RequirementsSocial Security and Health InsuranceSocial Security and Health InsuranceProperty MarketProperty Market
Basic Information • Macroeconomic Data •
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Legislation
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Tax System of the Czech RepublicTax System of the Czech RepublicThe tax system of the Czech Republic is similar to other European countriesThe corporate income tax has a rate of 20 per cent (2009)Each taxpayer may choose linear or accelerated depreciationThe terms of depreciation range from 3 to 50 yearsThe real estate tax is levied on land and buildingThe taxation period is one calendar year
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Tax Rates in the Czech RepublicTax Rates in the Czech Republic
Value added tax (VAT) 19% (services & goods) or 9% (reduced)
Excise duty Levied on petrol and petrol derivates, alcohol and tobacco
Road tax CZK 1 200 (cars) – CZK 50 400 (trucks)
Real estate tax According to type, location and purpose of use of the real estate
Real estate transfer tax 3%
Inheritance tax & gift taxProgressive tax rate which ranges from 1% (0.5% for inheritance tax) up to 40% (up to 20% for inheritance tax)
Energy taxLevied on supplies of electricity, natural and other gases, and solid fuels with effect from 1 January 2008
Basic Information • Macroeconomic Data •
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The Main Indirect Taxes…The Main Indirect Taxes…
The VAT has a basic rate of 19% and reduced rate of 9%The basic rate is levied on the majority of goods and servicesExported goods are exempt from tax with possibility of claiming a VAT refund paid on inputThe tax is paid monthly or quarterly depending on the turnover of the taxpayerExcise duties are levied on mineral oils, liquors, wine, beer and tobacco products
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……The Main Indirect TaxesThe Main Indirect Taxes
The tax is paid when goods are released for consumption, i. e. when they leave a registered tax warehouse. Excise duty on tobacco product is paid through buying stamps.
Basic Information • Macroeconomic Data •
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Legal RequirementsLegal Requirements
Starting up a businessA foreign person‘s authorization to carry on a business activity on the territory of the Czech Republic takes effect on the day as of which that person, or that person‘s organizational component, is recorded in the (Czech) Commercial Register
Exempt from this are individuals (natural persons) who have a permanent residential address in a member state of the European Union
Incorporation or establishment of a Czech legal entity is another option
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Social Security and Health InsuranceSocial Security and Health Insurance
Contribution Employer (%) Employee (%)
Health care insurance 9.0 4.5
Pensions 21.5 6.5
Unemployment 1.2 0.0
Sickness and other benefits 2.3 0.0
Total 34.0 11.0
Contributions(of gross salary)
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Property MarketProperty Market
Location Standard A Standard B
Prague
Prague city centre 18.50 – 20.00 12.50 – 15.00
Inner city 14.50 – 17.00 10.00 – 13.00
Outer city 12.50 – 14.00 8.00 – 13.00
Periphery 9.00 – 12.00 8.00 – 11.00
Brno 11.00 – 13.00 7.00 – 9.00
Plzeň 9.50 – 11.00 5.00 – 6.00
Ostrava 9.50 – 12.00 4.50 – 6.00
Office Market(avg rent EUR/m2/month)
Location
Greater Prague location 4.00 – 5.00
Other Location 3.50 –4.50
Business and Logistic Parks(avg rent EUR/m2/month)
Foreign Offices - Investment SupportForeign Offices - Investment SupportSources of Useful InformationSources of Useful InformationThe Most Important WebsitesThe Most Important Websites
Basic Information • Macroeconomic Data •
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Sources
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Foreign Offices - Investment SupportForeign Offices - Investment Support
Basic Information • Macroeconomic Data •
Foreign Trade • Foreign Direct Investment
Anti-recession Measures •Legislation • Sources
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Sources
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Sources of Useful InformationSources of Useful Information
CzechTrade www.czechtrade.cz
CzechInvest www.czechinvest.cz
BusinessInfo.cz www.businessinfo.cz
Confederation of Industry of the Czech Republic www.spcr.cz
Economic Chamber of the Czech Republic www.komora.cz
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Sources
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The Most Important Websites…The Most Important Websites…
General information on the Czech Republic
http://www.czech.cz Official site for the CR
Portal of the Public Administration
http://portal.gov.cz The electronic gateway for the public administration and government services
Zlaté stránky www.zlatestranky.cz Telephone and companies directory
Iuridica http://iuridica.eunet.cz Legal services in the Czech Republic
Czech National Bank www.cnb.cz Monetary, financial and macroeconomic data
Prague Stock Exchange www.pse.cz Prague Stock Exchange data
The Industrial Property Office www.upv.cz Norms, Patents and Standards
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Sources
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……the Most Important Websitesthe Most Important Websites
The Grant Agency of the Czech Republic
www.gacr.cz Awards grants to the best project of basic research in all branches of science
The Register of Advertising Agencies
www.registrra.cz/rra Expert assistance in choosing and working with advertising and communication agencies in the CR
CzechTourism www.czechtourism.com
Official travel site of the Czech Republic
Portal of the Regional Information Service
www.risy.cz Information Website on the regions
Portal of the Czech Judiciary www.justice.cz Course of legal proceedings