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Stable Political and Economic Environment

Stable Political and Economic Environment

Stable Political and Economic Environment

The Czech Republic is a parliamentary democracy and one of the most advanced CEE countries. Its economic policy is consistent and predictable. An open investment climate is a key element of the Czech Republic’s economy.

The Czech koruna is fully convertible. All international transfers (e.g. profits and royalties) related to an investment can be carried out freely and without delay. The country’s strong and independent central bank (the Czech National Bank) has maintained an extraordinary degree of currency stability since 1991.

Czech legislation is in accordance with the regulations of the European Union. Furthermore, Czech commercial, accounting and bankruptcy laws are compatible with western standards. Under Czech law, foreign and domestic entities are treated identically in all areas, from protection of property rights to investment incentives. The government does not screen any foreign investment projects with the exception of those in the defence and banking sectors.

The Czech Republic has attracted a large amount of foreign direct investment (FDI) since 1990, making it one of the most successful CEE countries in terms of FDI per capita (Inward stock per capita as of 31th December 2018: Czech Republic EUR 12,712; Slovakia EUR 9,151; Hungary EUR 7,576; Poland EUR 5,467. Source: wiiw Database, The Vienna Institute for International Economic Studies, 2019).

The country’s investment grade ratings from international credit-rating agencies and its early membership in the European Union and OECD testify to its positive economic fundamentals. The country is a member of NATO and is fully integrated into other international organisations such as the WTO, IMF and EBRD.

Investment risk rating

Country Standard & Poor's Moody's Analytics Fitch Ratings
Czech Republic AA- Aa3 AA-
Slovakia A+ A2 A+
Poland A- A2 A-
Hungary BBB Baa3 BBB
Romania BBB- Baa3 BBB-
Russia BBB- Baa3 BBB
Bulgaria BBB- Baa2 BBB
Source: Czech National Bank, 2019

Improving Competitiveness

The Czech Republic is the most competitive country in the CEE region. According to the 2019 Global Competitiveness Report published by the World Economic Forum, the Czech Republic ranks 32nd among 141 economies in terms of  competitiveness (rank/141).

The Global Competitiveness Index 4.0  – Czech Republic

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Source: The Global Competitiveness Report, 2019