Czech Republic » Why Invest?

Out of all the countries in Central & Eastern Europe (CEE) the Czech Republic has proved to be the most stable in terms of economic developments and has also had the highest level of FDI. The domestic demand has increased in importance over the past five years since 2005. Microeconomic reforms have contributed to a steady annual growth, price stability, and a decrease in unemployment.

• The Czech Republic has a strategic location in the geographical heart of Europe making it extremely accessible from both the established western markets and emerging eastern markets.
• Highly educated and skilled workforce.
  
  
  
• The Czech Republic ranks among countries with the lowest average labour cost. It is still much lower than in western European countries.
• In 1998 the government introduced investment incentives that led to a marked increase in investments in Greenfield and Brownfield projects. More recently non-statutory incentives have been introduced for investment in so called “strategic services� applying to projects such as headquarters operations, shared service centers, call centers, research & development and high tech repair. There have been a number of large investors as well as small service sector companies that have moved their operations and re-located to the Czech Republic. The countrys current rate of corporate tax is 26% (which will be reduced to 24% in 2006) and it is understood that the finance ministry has plans to lower the tax rate even further by 2006 in order to strengthen its position and remain the most competitive in the region. There is even talk of introducing a flat rate tax to simplify the overall tax system.
  
  
  
• Strategic Services of the country include headquarters operations, customer contact centers, shared service centers, research & development centers, software development, expert solution centers, design centers and hi-tech repair centers.
• Investment in hi tech manufacturing sectors is particularly attractive due to the Czech Republics long and rich industrial heritage as well as the highly attractive package of investment incentives on offer as mentioned earlier in this article.