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New aspects of financial support for investments in the Czech Republic

The European Commission has approved a new operational programme for drawing European aid. At the same time, the most recent amendment to the Investment Incentives Act has come into force.

15.05.2015

The investment environment in the Czech Republic has recently undergone two fundamental changes. At the end of April, the European Commission approved the long anticipated Operational Programme Enterprise and Industry for Competitiveness (OPEIC). The Ministry of Industry and Trade of the Czech Republic, which has authority over OPEIC, concurrently released preliminary information on the parameters of the initial calls of the programme for applicants. The ministry will begin accepting aid applications in June.

OPEIC follows the successful Operational Programme Enterprise and Innovation 2007-2013, but it’s allocation of EU funding in the amount of EUR 4.331 billion (approx. CZK 120 billion) is one-third larger than that of the previous programme.

The latest amendment to the Investment Incentives Act came into force on Friday, 1 May 2015. The amendment brings forth new types of investment incentives and eliminates a number of restrictions connected with the Investment Incentives Act and related acts.

The amendment significantly expands the number of districts in which cash grants for job creation and training and retraining of new employees. At present, four districts are supported, whereas under the new amendment that number may be increased to as many as fourteen.

The concept of special industrial zones is also being established in the Czech Republic. By means of a decree, the government designates industrial zones in which more attractive incentive conditions will be offered, e.g. greater cash grants for job creation and a completely new incentive consisting of a property-tax exemption  for a period of five years.

Between 1998 and 2014, CzechInvest registered 924 decisions to grant incentives in the amount of CZK 730 billion and involving the creation of 170,000 jobs. Nearly half of the applications were submitted by Czech companies with the intention of expanding their operations in the Czech Republic. The largest number of investment-incentive applications were submitted in the automotive and mechanical-engineering sectors.

More information on the amendment to the Investment Incentives Act is available here.