Incentives attract 48 firms to ČR in 2012, most since crisis

Prague, Jan 21 (CTK) - The incentives that the Czech Republic offers to investors attracted 48 companies last year, the highest number since the financial crisis in 2008, daily Hospodarske noviny (HN) said Monday, referring to data of government's investment support agency CzechInvest.

The companies want to create 5,472 jobs in projects registered at CzechInvest whose value totals Kc20bn, the paper said.

CzechInvest's data, made public in HN, show that in 2011 there were 43 projects registered at CzechInvest whose planned value was Kc25bn and in which companies promised to create 5,434 jobs.

CzechInvest registered 21 such projects worth Kc10bn with 3,142 planned jobs in 2010 and 21 projects worth Kc10.5bn with 2,575 planned jobs in 2009.

Investors' interest was encouraged by a change of the rules for the right to claim tax advantages effective as of the middle of the year 2012. CzechInvest had registered only seven applications for public aid until then, HN said.

The amended law prolonged the period for making an income tax deduction to ten years, for example. The ten-year period is in effect in the neighbouring countries, but in the Czech Republic it was shortened to a half in 2007.

"The change will help above all technologically advanced projects that usually require a longer investment return period," HN quotes CzechInvest's acting head Petr Ocko as saying.

Among the companies making use of the change in legislation last year were Skoda Auto, Saar Gummi Czech, Trinecke zelezarny and Jotun Powder Coatings, for example, CzechInvest said.

"It is becoming apparent that the amendment to the law on investment incentives was a step in the right direction and that the Czech Republic is able to compete," Industry and Trade Minister Martin Kuba said Monday.

The new jobs that will be created thanks to investment will to a large extent concentrate in regions with high unemployment such as the Ustecky region (northwest Bohemia) and Moravskoslezsky and Olomoucky regions (northern Moravia), Kuba said.

"Thirty-nine cases were expansions of existing companies, and the rest were investors investing for the first time in the Czech Republic of establishing another, entirely new company here," Ocko said.

"This trend shows that we are successful in attracting investment with long-term potential," he added.

The highest number of investment plans submitted last year were in the category of the car industry (19), plastics and rubber sector (seven) and engineering and metalworking industry (six).

Most of the investment plans were manufacturing projects. Two investors plan to build technological centres in the Czech Republic and two investors want to build shared services centres there.

Investment plans - year-on-year comparison

year Number of accepted invest. plans (projects) 2009-2012 Investment (in Kc billions) 2009-2012 Number of new jobs 2009-2012
2009 21 10.5 2,575
2010 21 10 3,142
2011 43 25 5,434
2012 48 20 5,472
Jan 1 - July 11, 2012 7 1 267
July 12 - Dec 31, 2012 41 19 5,205

source: CzechInvest