- 106 arranged investment projects in the value of CZK 65.6 billion
- 30% of the investments involved high-tech projects
- the latest amendment to the Investment Incentives Act is bringing greater support for high-tech investments
Based on negotiations concluded with CzechInvest in 2017, foreign and domestic companies plan to invest more than CZK 65 billion in the Czech Republic. Every third investment out of the total of 106 investments is a high-tech project, i.e. a project that has a high degree of technological focus or that is connected with research and development activities. In 80% of cases, the investments involve expansions of companies that are already operating in the Czech Republic. Eighty-three investors plan to use investment incentives.
“New investors are no longer coming to the Czech Republic in the extent to which we were accustomed in the past. We are not as able as we once were to absorb purely production activities that are not very technologically demanding. At the same time, we are relying more on high-tech investments,” says Silvana Jirotková, CEO of CzechInvestu. “With more advantageous investment incentives, which should be applicable starting next year, we will motivate firms to undertake more technologically demanding and R&D-focused investments.”
“Obtaining incentives will be easier for investment projects that cooperate with research organisations or universities and employ a certain percentage of workers with university education,” Silvana Jirotková explains. “For investments with higher value added, the prepared amendment to the Investment Incentives Act will automatically take into consideration investments in technology centres and business support services centres. In the case of production activities, setting employees’ wages at least at the level of the average wage in the given region will be a condition.”
In eighty cases, firms already operating in the Czech Republic expanded in 2017 with CzechInvest’s assistance. Those projects will bring CZK 53.5 billion to the Czech Republic. The Czech Republic received 26 completely new investment projects from countries such as Japan and the Netherlands, as well as from Austria, Spain and China, for example, which will bring CZK 12.1 billion to the country.
CzechInvest arranged the largest number of investments – whether new projects or expansions – with investors from Germany (17 in the value of CZK 23.8 billion), the United States (ten in the value of CZK 2.6 billion) and Japan (seven in the value of CZK 4 billion). Chinese investors accounted for two projects in the combined value of CZK 0.9 billion.
CzechInvest arranged the largest number of investment projects in the metalworking and metal-processing industry (21 in the value of CZK 11.6 billion), vehicle manufacturing (16 in the value of CZK 17.9 billion) and IT and software development (ten in the value of CZK 1.6 billion). In comparison with previous years, the number of projects in the area of IT and software development grew significantly. From 2013 to 2016, there were only sporadic investments in this field in the value of tens of millions of korunas. Those arranged in 2017 were most frequently placed in Prague or in the South Moravia region. Overall, investors in 2017 most often planned to locate their activities in the South Moravia (15 in the value of CZK 3.7 billion), Ústí (13 in the value of CZK 6.3 billion) and Central Bohemia (11 in the value of CZK 10.5 billion) regions.
The biggest investment project arranged by CzechInvest in 2017 is the expansion of Siemens. In the coming years, the company will expand and modernise its branches in the South Bohemia, Moravia-Silesia, Olomouc, Hradec Králové, South Moravia and Ústí regions. Part of the investment in the value of CZK 7 billion comprises a development centre in Ostrava. Due to its nature, this investment fulfils the requirements of a high-tech project.
The second-biggest investment of 2017 also fulfils the requirements of a high-tech project. Praha Vaccines a.s. is investing CZK 2.5 billion in the expansion of its production of vaccines again infectious diseases, especially polio, in Říčany in the Central Bohemia region. The five biggest arranged investments of 2017 also include the expansion of production of frozen baked goods by La Lorraine, a.s. in the Central Bohemian city of Kladno, the expansion of OP papírna, s.r.o. in Šumperk in the Olomouc region and the expansion of ŠKODA AUTO a.s.