Despite the persistent coronavirus crisis, 2021 brought a revival of investors’ interest in the Czech Republic. CzechInvest provided support for 53 new investment projects, which is almost twice as many as in 2020. As in the previous year, two-thirds of the projects comprised investments with high value added, i.e. technology-oriented investments and investments involving research and development. Most of the investment projects were pledged by companies that are already established in the Czech Republic, as 39 projects were aimed at expanding those companies’ existing activities.
Small and medium-sized enterprises most frequently applied for investment incentives
“In 2021, we focused primarily on attracting investments that were oriented toward research and development of new technologies. We thus succeeded in arranging new investments in the value of CZK 25.25 billion, thanks to which more than four thousand jobs will be created. We are also registering strong interest in investment incentives and, for the first time ever, the majority of applicants were SMEs, which was our goal," says Patrik Reichl, CEO of CzechInvest.
Last year, thirty-six companies applied for investment incentives and pledged to invest CZK 12.46 billion. Two applications requesting support for the expansion and establishment of technology centres were also received. The remaining investments were in the manufacturing industry, particularly in the area of advanced materials. The largest number of investments will be implemented in the South Moravia region, followed by Moravia-Silesia. These investments will create nearly 2,300 jobs across the Czech Republic. Small and medium-sized enterprises comprised 53% of the applicants, which was due primarily to a positive change of the legal conditions for qualification. The estimated sum of the benefits of these projects for the state is nearly CZK 24.5 billion over a ten-year period.
"One of the important investments of last year, which is even more significant due to the current chip shortage, is the expansion of onsemi’s activities. The American company, which has operations in Rožnov pod Radhoštěm, plans to invest in new production processes for silicon and silicon-carbide wafers, thus strengthening the semiconductor industry in the Czech Republic,” adds Deputy Minister of Industry and Trade for Digitalisation and Innovation Petr Očko.
Expansions of companies already operating in the Czech Republic predominate
In comparison with the previous year, when the share of new investment projects increased slightly, expansions of companies already operating in the Czech Republic, which comprised two-thirds of the projects, still predominate. New investors came mainly from the United States and Germany. A large portion of the investments will be placed in the Plzeň, Central Bohemia and Ústí regions, whereas Moravia-Silesia and South Moravia were chosen as the locations for the largest number of projects.
“Foreign direct investments in the Czech Republic showed a significant recovery in 2021, which is in line with global developments. The decision to place an investment is a long process and we are still in talks with many investors who decided to invest after the main wave of the pandemic. We are also registering increased interest in investment incentives. Many companies are changing their supply chain strategy and moving their operations closer to clients in Europe. However, some of the planned investments may be affected by the current war in Ukraine,” adds Eva Jungmannová, head of the Investment and Foreign Operations Division at CzechInvest.