Doing Business in the Czech Republic 2016

Doing Business in the C zech Republic

DOING BUSINESS IN THE CZECH REPUBLIC 2015/2016 for foreign business partners compiled by PP Agency s.r.o. in cooperation with Ministry of Foreign Affairs Ministry of Industry and Trade Ministry of Regional Development Czech Trade Promotion Agency/CzechTrade Business and Investment Development Agency CzechInvest Czech Export Bank Export Guarantee and Insurance Corporation, a.s. (EGAP) Czech Tourist Authority – CzechTourism International Chamber of Commerce/ICC Confederation of Industry of the Czech Republic Czech National Bank Centre for Regional Development of the Czech Republic – Enterprise Europe Network Czech Centres Czech Chamber of Commerce Confederation of Employers’ and Entrepreneurs’ Associations of the Czech Republic Editorial Board: Vladimír Bärtl, Marcela Havlová, Josef Jílek, Dagmar Kuchtová, Karel Machotka, Petra Menclová, Jan Mlčák, Marie Pavlů, Miroslav Somol, Jarmila Škvrnová, Jan Špunda, Martin Tlapa, Jan Wiesner Editor-in-Chief: Pavla Podskalská Prague

Jana Pike

Editors:

Graphic design: Graphic designer: Barbora Nejdlová Production: Barbora Nejdlová Barbora Nejdlová

Cover: Issued by:

PP Agency s.r.o.

Myslíkova 25, 110 00 Praha 1, Czech Republic www.ppagency.cz, e-mail: journal@ppagency.cz

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Deadline: 30 July 2015 Copyright: PP Agency s.r.o.

ISSN 1211-0949 It is not allowed to reproduce any part of the contents of this book without prior consent from the Editor.

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DOING BUSINESS IN THE CZECH REPUBLIC 2015/2016 CONTENTS Foreword by Bohuslav Sobotka, Prime Minister of the Czech Republic . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Foreword by Jan Mládek, Minister of Industry and Trade of the Czech Republic. . . . . . . . . . . . . . . . . . . .8

I. CZECH REPUBLIC – ECONOMIC POLICY Useful Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Czech Economy is Back on the Track . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 The Czech Economy in 2014–2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Foreign Trade is Again Heading to Record Heights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

II. CZECH INDUSTRY Czech Industry on the Rise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Czech Engineering Industry Expected to Grow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25 Future Development of the Energy Sector and Its Importance for the Czech Economy. . . . . . . . . . . . . .29 Automotive Industry in CR: Record Results. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 The Chemical Industry is Doing Well . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33 Nanotechnology as a High Card in the Competition Struggle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35

III. HOW TO DO BUSINESS IN THE CZECH REPUBLIC Forms of Business Entities in the CR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Incorporating a Limited Liability Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39 Incorporation a Joint-Stock Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Steps for Acquiring a Trade Licence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 More Business Reliefs in the Czech Republic in 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44 Leasing Business Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45 Time for New Investment Incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47 Public Procurement in CR: Principal Changes not To Be Overlooked . . . . . . . . . . . . . . . . . . . . . . . . . . . .49 Insolvency Law: Protecting Your Claims in 2015. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

IV. FINANCE The Czech Banking Sector is Stable and Liquid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54 Entrepreneurship of Foreign Entities and Its Taxation in the Czech Republic . . . . . . . . . . . . . . . . . . . . .56 Which Tax Changes Await Businessmen in 2015?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57 Employees-Taxation, Social Security and Health Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

V. HUMAN RESOURCES AND EDUCATION Labour Code Lays Down the Rights and Obligations of Employers and Employees . . . . . . . . . . . . . . . . .64 Changes to Czech Employment Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66 Employment of Foreigners: Employee Card. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69 Educational Opportunities in the Czech Republic are Exceptional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 How Well Are Czechs Educated? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .73

VI. TOURISM The Czech Republic – an Ideal Destination for Your Get-Togethers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78 Golf: The CR is a Promised Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .79 The Luxury and Tradition of Czech Spas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

VII. REGIONS Prague Region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 Central Bohemia Region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 Plzeň Region. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90 South Bohemia Region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .93 Karlovy Vary Region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .95

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Bítov Castle

Ústí nad Labem Region. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .97 Liberec Region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 Pardubice Region. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .102 Hradec Králové Region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .104 Vysočina Region. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .107 South Moravia Region. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .109 Olomouc Region. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 Zlín Region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114 Moravia-Silesia Region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117

Photo: CzechTourism archives, Ladislav Renner

VIII. USEFUL ADDRESSES AND INFORMATION Ministry of Foreign Affairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .120 Ministry of Industry and Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .120 Ministry of Regional Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121 CzechTrade – Czech Trade Promotion Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121 CzechInvest, Business and Investment Development Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .122 Czech Export Bank. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .122 Export Guarantee and Insurance Corporation (EGAP). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .123 Czech Tourist Authority – CzechTourism. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .123 The International Chamber of Commerce/ICC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .124 Confederation of Industry of the Czech Republic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .124 Czech National Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 Centre for Regional Development of the Czech Republic – Enterprise Europe Network . . . . . . . . . . . . 125 Czech Centres . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .126 Czech Chamber of Commerce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .126 Confederation of Employers’ and Entrepreneurs’ Associations of the Czech Republic. . . . . . . . . . . . . . 127 Central and Other Key Bodies of the Czech Republic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .128 The Most Important Websites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .129

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Doing Business in the Czech Republic 2015/2016 COMPILED BY PP AGENCY, S.R.O. IN COOPERATION WITH Ministry of Foreign Affairs

Ministry of Industry and Trade

Ministry of Regional Development

Czech Trade Promotion Agency/CzechTrade

Business and Investment Development Agency CzechInvest

Czech Export Bank

Export Guarantee and Insurance Corporation, a.s. (EGAP)

Czech Tourist Authority – CzechTourism

International Chamber of Commerce/ICC

Confederation of Industry of the Czech Republic

Czech National Bank

Czech Centres

Czech Chamber of Commerce

Confederation of Employers’ and Entrepreneurs’ Associations of the Czech Republic with compliments

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Photo: Government of the Czech Republic archives

Centre for Regional Development of the Czech Republic – Enterprise Europe Network

Doing Business in the C zech Republic

In my last year’s foreword to this publication, I stated that the year 2014 would prove to be a turning point for the Czech economy that would return to growth. I am glad to confirm that currently, we are one of the fastest growing economies across the entire European Union.

According to the latest figures, the demand is growing, companies are investing in new equipment and hiring new employees and the Government is delivering on its promise to invest in infrastructure and other sectors which are key to the Czech economy.

From the foreign investors’ perspective, it will certainly be significant that the current Government has managed to push through new rules for public investments which will, inter alia, facilitate creation of new industrial zones. Our goal is to encourage even more multinational companies to open new branches in our country and, at the same time, it is worth noting that a number of major foreign companies have already settled in the Czech Republic. Let me mention the cases of Amazon and Hyundai as an example.

I am convinced that our actions in this area will help to raise awareness about the Czech Republic being a favourable destination for headquarters of international companies. In addition to measures strengthening investments, we are continuing in our efforts to amend the labour market legislation in order to remove all obstacles hindering work life balance. Some of the measures have already been implemented, other steps will follow shortly.

The Czech Republic is a small country but has a very strategic location in the heart of Europe. This location makes it our destiny to foster extensive business ties with our neighbouring countries as has now been the case for a long period of time. Czech exports have already gained reputation across the world and our position continues to strengthen on foreign markets. Thanks to long-term and systematic support of R&D, we have managed to establish a variety of branches in both private and public sector which rely on their international links and make our imports of great significance.

Positive developments in this area can be attributed, besides other things, to the common efforts of the Ministry of Foreign Affairs and the Ministry of Industry and Trade. They have recently considerably boosted the tools of our economic diplomacy, a measure which has enabled us to organise over 50 international events aimed at introducing Czech companies to foreign markets.

Last but not least, I would like to emphasise the fact that, although the Czech Republic has for years been primarily known as an exporter of cars and automotive parts, new high technologies are steadily gaining ground to be complementary to this traditional export article.

A number of Czech software companies have already succeeded on the international stage and also exports of high-tech products, are significantly increasing.

I believe that positive trends in our economy will persist and that strengthened international commercial exchange will be a contributing factor to this dynamics. I consider this edition of “Doing Business in the Czech Republic” as one of the essential ways of presenting our country to international markets.

BOHUSLAV SOBOTKA Prime Minister of the Czech Republic

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JAN MLÁDEK Minister of Industry and Trade of the Czech Republic

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Photo: Ministry of Industry and Trade archives

At the end of October, the World Bank brought out their annual publication, “Doing Business 2016”. In the publication, which ascertains the terms and conditions for doing business in 189 countries, the Czech Republic was ranked 36th.

This is a positive shift upwards in comparison with last year, when the Czech Republic occupied 44th position. This is a favourable outcome of the active collaboration with the representatives of the World Bank.

I am pleased to be able to say that the economy of the Czech Republic continues to grow and that in the past period its growth was even the most rapid of all the EU states. This was reflected in the position of the Czech Republic on the competitiveness ladder of the World Competitiveness Yearbook, issued each year by the Swiss non-profit organisation, the World Economic Forum. This year we were placed 29th, four rungs up the ladder year-on-year, and occupied the best position within the Visegrad Four. This testifies to the suitable concept of the Czech Republic’s economic policy, its high macroeconomic stability and the stability of its financial market in general. We can expect practically the same growth of GDP (approx. 3%) and industrial production (approx. 5%) in the period to come.

These favourable results are largely due to both household consumption and the growing volume of foreign trade. Our optimism as regards the growth of exports is prompted by the improving consumer and business mood among our main export partners, the EU states, as well as the establishment of trade contacts with countries in other regions. As part of our export-oriented policy, measures have been taken to raise the efficiency of financial means expended in this area, which includes in particular easier access of small and medium-sized firms to financing their export operations and sub-deliveries for final exports.

To raise the competitiveness of the Czech economy, we also use the advantages provided by the operational programmes of the European Commission. The aim of the Enterprise and Innovation for Competitiveness Operational Programme covering the period 2014-2020 is to build a competitive and sustainable economy based on knowledge and innovation. Another important document the Government has adopted is its Policy for Support of Small and Medium-Sized Enterprises covering the period 2014-2020.

In this connection, I must not forget the power industry sector and the adoption in 2015 of the State Energy Concept, which outlines the long-term objectives of the state in the next 25 years, setting out trends for the Czech power industry in the long term ahead, especially as regards decarbonisation and decentralisation, and the continuing modernisation of the Czech power industry. The Concept also envisages the further development of the nuclear power industry. All this opens up opportunities both for Czech enterprises as well for foreign investors.

On 1 May 2015, the new Investment Incentives Act Amendment became effective, the aim of which is to harmonise the conditions for granting support with new EU regulations and to improve the investment and business environment in the Czech Republic. In the period from 1 January to 31 August 2015, 38 projects were supported within the framework of the Investment Incentives Programme to the amount of nearly CZK 15 billion.

The Czech Republic continues to be an important location for investment by foreign investors, both as regards its geographical position and, especially, the steadily improving terms and conditions it offers for doing business, as confirmed by the favourable shift of the Czech Republic upwards on the competitiveness ladder, announced by the World Bank in their “Doing Business” publication.

CZECH REPUBLIC — ECONOMIC POLICY

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A limousine will drive you to the airport or back home free of charge We will arrange your check-in, including luggage A private, luxurious lounge with all-inclusive refreshments will be reserved for you A limousine will take you all the way to the aircraft Once you try our services, you will not want to y any other way

Doing Business in the C zech Republic I. C zech Republic – Economic Polic y

USEFUL INFORMATION State Symbols of the Czech Republic Large State Coat of Arms

State Flag

The Czech Republic is a landlocked state situated in Central Europe, neighbouring on Germany, Austria, Slovakia, and Poland.

BASIC DATA Population

10 541 466 (1.–2. Q 2015) Area 78 864 sq.km Capital Praha (Prague) State system Republic Language Czech Highest elevation Sněžka (Snow Mountain), 1603 metres above sea level Time zone Central European Time GMT + 1, Summer Time GMT + 2 Currency 1 koruna česká/ Czech crown (Kč/CZK)=100 hellers EUR 1 = CZK 27.533 (average, 2014) USD 1 = CZK 20.746 (average, 2014) Internet domain name: .cz

UNESCO WORLD HERITAGE LIST The UNESCO World Heritage List includes the following cities and sites: Prague, Český Krumlov, Kutná Hora, the Litomyšl Château, Telč, the Lednice-Valtice area, Zelená Hora - the Church of St John of Nepomuk (in Žďár nad Sázavou), Holašovice, Kroměříž (château and gardens), the Holy Trinity Column in Olomouc, the Tugendhat Villa in Brno (architect Ludwig Mies van der Rohe), the Basilica of St Procopius and the Jewish Cemetery in Třebíč. Newly inscribed in the list of intangible cultural heritage were: in 2010 the Verbuňk recruit dance, and in 2011 the Ride of the Kings procession, both from Moravian Slovakia in the south-east of the country. More information at www.unesco-czech.cz.

NOTABLE PERSONALITIES Czechs are described as a very cultured nation, which has given the world a number of prominent figures. The most significant rulers and heads of state have included Emperor Charles IV and the Presidents T. G. Masaryk and Václav Havel. Figures of world renown include the scientists Jaroslav Heyrovský (Nobel Laureate in Chemistry), Otto Wichterle, a Czech chemist who invented contact lenses, and Antonín Holý, who discovered a drug treatment for AIDS. World renown was also gained by the entrepreneur Tomáš Baťa, as well as by Madeleine Albright, former US Secretary of State. The list of famous people in the cultural sphere includes the composers Smetana, Janáček, Dvořák, and Martinů, the writers Franz Kafka, Karel Čapek, Jaroslav Seifert (Nobel Laureate), Jaroslav Hašek, Bohumil Hrabal, and Milan Kundera. Winners of the American Academy Award are Czech film directors Miloš Forman (born in the Czech Republic), Jiří Menzel, and Jan Svěrák.

Others worthy of mention are the artists František Kupka, Alfons Mucha, and the unique-style photographer Jan Saudek. Famous Czechborn sports people are, for example, Emil Zátopek, Věra Čáslavská, Martina Navrátilová, Jaromír Jágr, Petr Čech, and Petra Kvitová.

President of the Czech Republic: Miloš Zeman

MEMBERSHIP The Czech Republic is a member of the European Union, the United Nations, NATO, WTO, the International Monetary Fund, the International Bank for Reconstruction and Development, the European Bank for Reconstruction and Development, the OECD, and many other organisations.

For additional practical information on the conditions of transport to the Czech Republic and stay in the CR, see www.czech.cz

PRACTICAL INFORMATION Country dialling code: +(420).

Details on telephone numbers are available on the websites www.zlatestranky.cz Licences for Mobile telephone network covering the territory of the Czech Republic have been granted to the following companies: O2 Czech Republic, a.s., T-Mobile Czech Republic a.s., Vodafone Czech Republic a.s., and Air Telecom a.s.

The most widely used credit cards in the Czech Republic are: Eurocard/Mastercard and Visa.

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CZECH ECONOMY IS BACK ON TRACK

REASONS FOR EXCHANGE RATE COMMITMENT The Czech economy went through a lengthy economic recession in 2012–2013 owing to weak external and in particular domestic demand, reflecting budget consolidation and low household and business confidence. The labour market situation deteriorated. There was a risk that inflation would turn negative at the start of 2014 and that deflationary expectations would emerge, leading to a halt in the nascent economic recovery or even a renewed economic downturn. All this was taking place in a situation when monetary policy interest rates had been at technically zero level and the room for using standard monetary policy instruments had thus been exhausted.

In November 2013, the CNB, in line with its previous communication, started to use the exchange rate of the crown as an additional instrument for easing monetary policy within its inflation targeting regime.

The CNB’s exchange rate commitment is one-sided. The CNB will not allow the crown to appreciate to levels it would no longer be possible to interpret as “close to CZK 27/EUR”. The CNB prevents such appreciation by means of automatic and potentially unlimited interventions, i.e. by selling crown and buying foreign currency. If the exchange rate departs from CZK 27/EUR on the weaker side, the CNB allows the crown exchange rate to move according to supply and demand on the foreign exchange market.

EFFECTS OF THE WEAKER EXCHANGE RATE The Czech economy has benefited from the weaker exchange rate. The economy grew by 2% in 2014 and accelerated further in the first half of 2015. In addition to easy monetary policy, the economic growth stemmed from the unwinding of the restrictive effect of domestic fiscal policy and, to a lesser extent, from a recovery in external demand.

The weakening of the crown’s exchange rate boosted not only export growth, but also growth in domestic investment and consumption, as firms and households stopped deferring their expenditures. The economic recovery has had a favourable impact the labour market in terms of rising employment, a decline in the number of unemployed persons, and renewed wage growth in the corporate sector.

At the start of 2014, headline inflation dropped to very low levels, i.e. well below the lower boundary of the tolerance band around the CNB’s 2%target. This was mainly due to the fading effect of VAT changes implemented in the preceeding year and to a decline in administered prices. However, the core inflation turned positive for the first time in almost five years. This was because the economic recovery, renewed wage growth and an increase in import prices. All these developments reflected, among other things, the weakened exchange rate of the crown.

By contrast, the deflationary tendencies in the euro area deepened further in 2014, dampening growth in import prices and thus counteracting a rise in domestic inflation. Global oil prices declined significantly at the end of the year and at the beginning of 2015. As a result, fuel prices started to decline in year-on-year terms in December 2014. Food prices also began to fall year-on-year owing to a previous decline in

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global prices of agricultural commodities and a ban on imports to Russia. This pushed headline inflation back down to almost zero level at the end of 2014.

Overall, the average annual inflation reached 0.4% only in 2014, the lowest number in a decade.

In response to these anti-inflationary pressures from abroad, the Bank Board has extended minimum duration of the CNB’s exchange rate commitment. In late 2013, the CNB promised to keep the exchange rate close to CZK 27/EUR at least until the start of 2015. In 2014 and early 2015, the minimum duration was in several steps prolonged and the CNB now states that they would not discontinue the use of the exchange rate as a monetary policy instrument before the second half of 2016.

Note: This article was written in August 2015.

Updated forecasts of the CNB are available at www.cnb.cz Photo: www.sxc.hu

The Czech economy accelerated in 2014 and at the beginning of 2015, in a sharp contrast to the recession of preceding two years. This turnaround has been significantly aided by relaxed monetary policy conditions after the Czech National Bank (CNB) adopted its one-sided exchange rate commitment in November 2013. Although the direct risk of deflation associated with a slump in domestic demand was averted by this CNB‘s policy action, inflation has remained low due to subdued price developments abroad and a drop in global oil prices. In this article we discuss developments in the Czech economy from the central bank‘s perspective, including the outlook for the next two years.

Doing Business in the C zech Republic I. C zech Republic – Economic Polic y

C Z K / E U R E X C H A N G E R AT E

FAVOURABLE DEVELOPMENTS IN 2015 The Czech economy recorded a further marked upturn in growth at the start of 2015. Gross domestic product expanded by 4% year-on-year in the first quarter of 2015, driven by domestic demand.

Households’ consumption growth has accelerated to almost 3%, reflecting rising salaries and stronger consumer confidence. Conditions on the labour market have also improved further. Employment growth accelerated, most notably in industry and in services. Amid much faster growth in employment than in the labour force, the unemployment rate continued to fall toward 5% in the second quarter of 2015. The wage growth in the corporate sector has nevertheless been accelerting only gradually so far, being just above two percent in nominal terms in the first quarter of 2015.

Inflation has also increased slightly (to 0.5% in July 2015), although it remains well below the CNB’s 2% target. The direct effect of the weakened exchange rate on inflation through import prices has already faded out. However, the easy monetary conditions are still supporting growth in the domestic economy, which is consequently fostering higher prices.

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22 5. 1. 2010

5. 1. 2011

5. 1. 2012

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5. 1. 2014

5. 1. 2015

PROSPECTS FOR THE FUTURE The latest CNB prediction from its Inflation Report III/2015 expects that accelerating external demand, low oil prices, easy domestic monetary conditions and higher government investment will lead to GDP growth of 3.8% in 2015. Economic growth will then slow slightly below 3% in 2016, reflecting the unwinding of the effect of an extraordinary increase in inventories at the start of this year as well as of the fall in oil prices. A decline in government investment and the recent appreciation of the crown-euro exchange rate will also foster an economic slowdown. According to the forecast, the economy will maintain the same rate of growth in 2017, with positive contributions from all components of domestic demand and, to a small extent, also from net exports.

The rising economic activity will manifest itself in an ongnoing improvement in the labour market situation. The number of employees will continue to rise and unemployment will further decrease. Wage growth in the business sector will increase noticeably and wages in the non-business sector will rise at a stable rate.

The growth of domestic economy and accelerating wages will foster higher consumer prices over the entire forecast horizon. However, headline inflation will still be below the 2% target in 2016 and will not hit the target until 2017.

The forecast assumes that market interest rates will be flat at their current very low level and the crown exchange rate will be used as a monetary policy instrument until the end of 2016. Consistent with the forecast is an increase in market interest rates amid modest appreciation of the crown in 2017. The return to conventional monetary policy will not imply appreciation of the exchange rate to the – slightly overvalued – level recorded before the CNB started intervening, among other things, because the weaker exchange rate of the crown is in the meantime passing through to domestic prices and other nominal variables.

At its policy meeting in August 2015, the Bank Board assessed the risks to the forecast as being broadly balanced. A modest downside risk may arise from the decline in oil prices, which decreased to USD 50 a barrel prior the meeting. In that situation the Bank Board emphasised again that the Czech National Bank would not discontinue the use of the exchange rate before the second half of 2016.

TOMÁŠ HOLUB Executive Director, Monetary Department Czech National Bank E-mail: Tomas.Holub@cnb.cz www.cnb.cz

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CZECH ECONOMY IN 2014–2015 The year 2014 was a good one for the Czech economy. Its growth accelerated and began to have a positive effect on the development of the labour market and the financial situation of the population.

The willingness of households to spend more based on growing consumer confidence was revived after several years of restraint. The financial results of firms, too, improved and their investment activity intensified. The public sector also increased its spending, especially on investment in the infrastructure supported by financial subsidies from EU funds. The Czech National Bank continued its policy of maintaining the relatively weak exchange rate of the crown and low interest rates. The financial situation of the state also improved, when after four years the budgetary deficit was decreased to below the onehundred-billion crown margin and the growth of the total public debt was halted.

THANKS TO INDUSTRY, ECONOMIC GROWTH BEGAN TO GAIN STRENGTH After the second recession, which ended in 2013, the economy began to pick up and the losses accumulated over the past two years of economic downfall were being erased. The greatest credit for the restart of the boom in the Czech Republic goes to its export-oriented industry, which seized the opportunity to place its products on the growing European and Asian markets. Perhaps most responsible for this development is car manufacture, which last year rose by 13.5%, reaching a new historical high. The number of cars produced in 2014 rose to 1.2 million, thus confirming the Czech Republic’s second position in per capita car production. The automotive industry, however, was not the only one to show a production growth. Other sectors of the economy, too, were growing, in particular as regards the services sectors followed by construction and agriculture.

On the side of demand, the role of engine driver in the economy was taken up by household consumption, supported, after four years, by the growth of real wages, declining unemployment rate and a generally positive mood of consumers. Following close after consumption, the economy was driven up by both public and private investment. This involved specifically investment in machinery and equipment, transport

vehicles, commercial property and finally also housing construction. Against the backdrop of higher profits in the business sector and a better economic outlook, firms began to increasingly use their own resources to finance the operation of their businesses and investments.

In the end, the economy in 2014 showed a 2-per cent growth and began to gather momentum right from the beginning of 2015. In the first half of this year, GDP increased by more than 4%, making the Czech Republic one of the fastest-growing economies within the entire EU. Just as in the previous year, its growth is based primarily on the performance of the manufacturing industry, followed closely by other sectors. Household consumption and investment activity are growing. This naturally goes hand in hand with growing imports, and consequently a slower growth of the balance of trade surplus. The Czech economy has a great chance to achieve the highest level of its growth for the past eight years.

The strong growth of exports last and this year becomes reflected in the growth of the Czech balance of trade surplus. This, together with a favourable balance of payments in the services sector and the massive flow of money from EU funds, easily compensates for the outflow of investment yields (dividends and interest) abroad. As a result, the balance of payments current account in 2014 for the first time showed a moderate surplus, which is expected to further increase this year thanks to the current positive trends. Some credit for this development, however, will go to cheaper oil prices, which in itself will mean a saving for the Czech Republic,

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Photo: www.sxc.hu

EXTERNAL ECONOMIC BALANCE IS IMPROVING, INTERNAL BALANCE BECOMES STABILISED

Doing Business in the C zech Republic I. C zech Republic – Economic Polic y

equalling approximately EUR 1 billion.

The current account surplus may even come close to two per cent of GDP. For the fifth year running, the state budget deficit is being reduced. Its level last year was -1.8% of GDP. Although the public finance deficit in 2014 rose to 2% of GDP, thanks to the use of current free (and in fact excessive) reserves, both the nominal and real values of public debt declined. In relation to GDP, the government debt is far below the Maastricht criteria and it is very likely that this situation will remain unchanged also in coming years. This year, the income side of the budget will benefit significantly from the growth of GDP, which will be much higher than expected. On the other hand, owing to the existing structural deficit, the way to an absolute balance of public finance will by no means be easy or short.

Considering the very good position of the Ministry of Finance on the capital market and the very moderate debt of the public sector, government bonds yields remain relatively low, or rather are traded with only a very low risk surcharge in comparison, for example, with German bonds. Moreover, as a result of liquidity accumulation in the market and bets on the suspension of the regulation of the exchange rate, they have become popular with foreign investors.

The short end of the crown yield curve is even traded with negative yields.

ECONOMIC GROWTH RAPIDLY REDUCES UNEMPLOYMENT As the economy began to gather strength after the two recessions, a positive turn took place in the Czech labour market. Since the beginning of 2013 unemployment has been steadily declining, while the supply of vacancies has been growing rapidly. Still in 2010, the unemployment rate was 7.4% according to a labour survey, but in the first half of this year the rate was only 5.5%, with the number of people looking for work steadily declining. In comparison with the other EU states, the Czech Republic this year even placed second among countries with the lowest unemployment rate. The greatest credit for this improvement goes to industry, followed by most branches of the services sector.

For the time being, neither the rapid economic growth, nor the declining unemployment rate has provoked excessive wage pressures. For two years running, average hourly labour costs

have been declining, and last year they were at the level of EUR 9.4, which is less than one-third in comparison with Germany. Thus, in terms of labour costs, the Czech Republic maintains its good competitive position within the EU. We must not forget, however, that some credit for this result goes to the weakening of the exchange rate of the Czech currency, a measure taken by the Czech National Bank (CNB) in November 2013. When looking at the development of wages paid in Czech crowns, however, no acceleration has taken place that would surpass the growth of the productivity of labour, and it is most likely that this will not change even next year.

INFLATION REMAINS STIFLED Although the economy was gathering strength, inflation remained below the one-per cent level for the whole of last year. Not even the devaluation of the Czech crown, which CNB carried out in November 2012, incited any growth of prices. The average inflation rate in 2014 was a mere 0.4% as a result of the falling prices of fuels, food and housing (energy). Despite the gradually growing consumption and a general economic revival, no demand inflation pressures occurred. The lowinflation development continues also in 2015 and inflation is still much below the central bank’s target value. This enables CNB to maintain interest rates at a very low level and prolong the duration of the exchange rate regulation, in the framework of which the Czech currency holds over the 27 CZK/EUR level.

Although the Czech Republic meets most of the Maastricht criteria already now, it has not as yet fixed its currency within the ERM-II system and is not likely to do so at least until the next parliamentary elections.

One of the reasons is that the popularity of the euro as a domestic currency in the Czech Republic has strongly declined after the start of the European debt crisis, especially among the people, while the business sector remains divided, according to some surveys. An early entry of the Czech crown in the ERM-system and the introduction of the euro in the Czech Republic is therefore not very likely in the next four years.

THE CZECH FINANCIAL SECTOR REMAINS IN PERFECT CONDITION EVEN AFTER THE TWO RECESSIONS The condition of the banking sector – the largest creditor of the Czech state – remains to be perfect. This is confirmed by its long-term profitability ratio (ROE 17% in 2014), a good profit-to-cost ratio, high liquidity, surplus of deposits over loans and the quality of the credit portfolio (the share of non-performing loans is only 5.9%). The credit market is undergoing a period of growth, which is in keeping with the economic cycle and does not create any hidden bubbles in the client segment or the real estate market. Especially booming is the mortgage market, which helps revive the residential housing market and maintain the moderate growth of real estate prices, and so are investment loans to domestic businessmen. The banking sector, together with the other sectors, thus helps create favourable conditions for the country’s economic growth in the years to come.

The outlook of the Czech economy for this and next year remains positive. On the supply side, the economy will be pulled up by industry and construction, on the demand side by consumption and investment. Inflation will be rising only slowly and will return back to the target set by CNB in 2017 at the earliest. Low oil prices and the continuing growing interest in new cars in the European market will act as an important growth stimulus. A risk factor, which may unfavourably influence economic growth in the Czech Republic in the next two years, is a potential negative turn in the development of foreign demand.

PETR DUFEK Financial Markets Analyst, ČSOB E-mail: pdufek@csob.cz

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Doing Business in the C zech Republic I. C zech Republic – Economic Polic y

FOREIGN TRADE IS HEADING AGAIN TO RECORD HEIGHTS The foreign trade situation in 2014 and during 2015 underscored the favourable macroeconomic framework of the Czech economy in this period. In 2014, foreign trade achieved the highest surplus ever and it will also attack the same level in 2015. Without a doubt, it is assisted by the recovery in the markets of our key trading partners, combined with the exchange rate stability of the Czech currency in relation to the euro, thanks to the interventional regime of the Czech National Bank. The high domestic investment activity and recovery of consumer demand is thus reflected in a higher importing activity.

The success of Czech exporters, combined with the inflow of monetary resources from the EU Funds, is conducive to a significant improvement in the balance of payment current account. In 2014, it ended in a surplus for the first time since 1993 and the situation has further been rapidly improving during 2015.

The growth of the Czech economy gained in strength at the turn of last and this year. The year-on-year dynamics achieved 4.0% in the first three months of 2015 and accelerated to 4.4% in the second quarter. The Czech Republic thus recorded one of the quickest growths within the EU countries in the first half of the year. It is important that the growth has sound foundations, which is confirmed by a look at the development of the gross value added. The economic rise is broad-based, driven by domestic demand, and should be maintained in the rest of the year. After last year’s 2.0% growth, the Czech economy should see an improvement of about 4.5% in real terms, the highest in the last eight years.

Balance of payments current account, in % GDP

B A L A N C E O F PAY M E N T S C U R R E N T A C C O U N T H A S R A P I D LY I M P R O V E D T H I S Y E A R 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% -4.0% -5.0% -6.0% 1.09

1.10

1.11

1.12

1.13

1.14

1.15

Source: CNB, CSO, Komerční banka

SHIFT TO DOMESTIC DEMAND As regards growth structure, compared with the pre-crisis years there has been a marked shift from foreign demand and net exports to domestic demand.

The latter has profited from a long-term eased monetary policy; fiscal policy has started contributing significantly, mainly since the end of last year. Due to the need to draw the remaining resources from the EU Funds from the previous programming period by the end of this year, public investment activity will continue to grow in the coming months.

However, private investments have also been doing well, thanks, among other things, to the growth of industrial production and the related increased use of capacities. During the first half of the year, the volume of accumulated industrial production increased by almost 13%, when the automotive industry remained the driving factor. Here, too, the shift towards domestic demand is

evident. Growth in the domestic sales of cars and light utility vehicles increased by 20.8% year-on-year in the first six months of this year; exports gained 7.1% over the same period. The higher investment activity also corresponds with the significantly improving situation in the building sector. Especially thanks to new infrastructure projects, the volume of building production has seen a solid growth since the beginning of the year (9.6% accumulated growth in the January–June period) and, due to the need to complete the drawing of European money, a further acceleration can be expected in the second half of the year.

GOOD SITUATION IN THE LABOUR MARKET The ongoing economic recovery has been so robust that it generates the creation of new jobs and pushes down the unemployment rate. In the first half-year, employment was the highest ever and it should further increase. On the other hand, the unemployment rate will further decrease in the rest of the year to below its natural level. This will result in a 3.6% nominal wage growth in 2016, after this year’s 2.4%. The improving situation in the labour market, combined with the more eased fiscal policy, apparent in the increasing salaries of public servants and higher social transfers, is evident in the development of retail sales (accumulated +2.9% in the first half-year), as well as naturally in real household consumption. It should record a 3.3% increase this year, the highest since 2008.

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RECORD FOREIGN TRADE EXCHANGES The price development in foreign trade is significantly influenced by the exchange rate development. The introduction of the interventional regime in November 2013, and the related weakening of the crown against the euro impacted on the development of prices in imports and exports in 2014. Naturally, the weaker crown was reflected in more expensive imports. The prices of imports thus increased by 1.9% in 2014.

However, it is more important that export prices rose even more (by 3.9%) and thereby exchange relations improved. With 2015, the effect of the weaker currency faded away from the year-on-year development.

In the first half of this year, import prices decreased by 0.7% on average year-on-year. In the same period, export prices declined by only 0.5%. The impact of the exchange rate relations thus remains favourable, although it has declined significantly in comparison with last year.

Despite the quick recovery of domestic demand, the external balance of the Czech economy is not deteriorating, perhaps paradoxically so. An explanation is offered precisely by the above-mentioned favourable development in exchange rate relations. Exporters are profiting from the stable exchange rate development and the domestic currency undervalued to the euro on the one hand, and although not very substantial but still evident, the increase in the performance of key West European markets. Although domestic investment and consumer activity also stimulate import volumes, owing to the drop in the prices of commodities, the increase in the overall volume of imports in crown terms does not lag behind the dynamics of exports.

Foreign trade exchanges will achieve a record level this year, the balance of foreign trade surplus will attack last year’s historic maximum.

In the first half of this year, the average year-on-year rise in exports totalled 7.4%; imports increased by 7.5% over the same period. The accumulated foreign trade surplus amounted to CZK 106.7 billion on the national scale at the end of June, and was thus CZK 5.2 billion higher year-on-year. In both the volume and growth rates, products of the

automotive industry remain the most important export items. At a considerable distance they are followed by semi-finished products and materials, industrial consumer goods, and chemical industry products.

The European Union continues to be the main trading partner, with an almost 84% share in total exports. Compared with last year, its share thus increased by less than a full percentage point. Over 65% of overall Czech exports went to the Eurozone in the first half-year. Among individual countries, the list is topped by Germany with a 32.6% share. Second in the total exports with an 8.5% share is Slovakia, followed by Poland, the United Kingdom, Austria, Italy, and Hungary.

Not surprisingly, the share of exports to Russia decreased quite significantly, from last year’s 3.2% to 2.0%. It thus dropped to 13th position in the export territories’ ranking.

For the first time since 1993, the current account ended in a surplus in 2014 (amounting to 0.6% of GDP), and the favourable trend continues in 2015.

During the first six months of 2015, the twelve-month accumulated surplus further increased. According to our estimate, it amounted to 2.1% of GDP in June. The improvement is not only due to the better foreign trade results.

A contribution to the improving current account results also comes from the substantial drop in the deficit of the primary incomes’ balance. This is due especially to this year’s weaker dividend season, when investors prefer reinvestments in the Czech Republic contrary to repatriation, together with the inflow of resources from the EU budget. The latter is enhanced this year by the need to draw the remaining funds from the previous 2007-2013 programming period.

From the viewpoint of foreign trade participants, it is significant that we expect exchange rate stability for the period of almost another full year. On the one hand, we are witness to a strengthening real economy. On the other hand, the acceleration of inflation is not so significant as to speed up the lifting of the exchange rate regime, rather the contrary. The CNB Bank Board says that it will not end the interventional regime before the middle of 2016. We expect this step to take place during the third quarter of next year.

JAN VEJMĚLEK Chief Economist, Komerční banka E-mail: jan_vejmelek@kb.cz

Photo: www.freeimages.com

The growing domestic demand is also reflected in the inflation data; this year’s inflation development to date has shown surprising rates. While the average inflation was a mere 0.1% in the first quarter, it amounted to 0.7% in the second quarter. The rising oil prices in the world markets pushed fuel prices upwards; the effect of last year’s good harvest is being exhausted, thus easing food prices. Regulated prices did not provide many surprises, with core inflation remaining at 1.2% year-on-year in the second quarter. In the second half of the year, overall inflation is to accelerate and achieve 0.6% on annual average. The inflation target of the Central Bank (2%) should be achieved at the end of next year. On average, inflation should be immediately below the target, where we expect 1.9%. The current drop in the prices of oil and other commodities is naturally a risk towards a lower price development.

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Doing Business in the C zech Republic I I. C ze c h In du s tr y

CZECH INDUSTRY ON THE RISE After a long recession, 2014 was a year of continuing growth for Czech industry, starting in the spring of the previous year. Total production of this sector, the strongest in the Czech economy, rose by 5% in real terms, and its growth has not eased up even this year, when it increased year-on-year by 4.7% in the first six months. Industry continues to be a motor force of economic growth and is largely responsible for raising the foreign trade surplus and improving the situation in the labour market.

Its competitive position has further improved on the European scale, mainly due to the favourable development of labour costs. The mood in industrial enterprises and the flow of new contracts indicate that the industry will also remain on its positive course for the rest of this year and that its development will favourably influence the overall economic growth in the year to come.

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INDUSTRY SETS THE DIRECTION OF THE CZECH ECONOMY Industry plays a dominant role in the development of the Czech economy.

Czech industry is responsible for the creation of the largest share (more than 32%) of the total added value among all the EU states and is, for the second year running, a sector taking the greatest credit for the acceleration of the country’s economic growth. Growth is also shown by production, productivity of labour, employment and finally also profit-making on the part of domestic industrial enterprises. For the whole of 2014, added value in the manufacturing industry increased by 5.5% and, at the beginning of this year, its year-on-year rate accelerated to as much as 6.3%.

Already at the beginning of the current boom, industry managed to make good the previous downfall and bring production to above the level of the very successful years before the Lehman Brothers collapse.

Domestic industry is very successful even when compared with other EU countries, in particular the “old members”. The trend of the domestic manufacturing industry strongly surpasses the results of this sector in Germany.

The greatest credit for this development undoubtedly goes to car manufacture which, in terms of added value, accounts for more than one-fifth of the entire manufacturing industry. The number of cars manufactured last year increased by 10.4% to nearly 1.3 million vehicles, the best result to date in the history of the Czech Republic. This reaffirmed the country’s second position on the world ladder of per capita car production (120 cars per 1 000 inhabitants) and, in addition, raised the share of the Czech Republic in world car output by onetenth to 1.4%.

INDUSTRY IS DOMINATED BY CAR MANUFACTURE The automotive industry sector is not only the strongest sector in domestic industry as a whole, but also takes the greatest credit for the growth of exports and the country’s trade surplus. While in 2004, the first year after the Czech Republic had joined the EU, the surplus of car exports (including spare parts) was worth approximately CZK 100 billion, last year the surplus was nearly CZK 400 billion, and this figure has further increased since the beginning of the current year.

A positive factor is that domestic car factories, thanks to their flexibility, innovation and investments, aptly used the turn in the European market to their advantage, thus ensuring a dynamic growth in their manufacture. In addition, the flow of new contracts in the automotive industry indicates that the current increase has not reached an end, even though the growth in the past few years has been most impressive. In comparison with the strong years before the first recession (2007–2008), production and contracts in this sector are 60% higher in real terms (June 2015), placing industry in second position in the entire economy among the fastest growing sectors, after Internet trading. Surveys and consumer moods also confirm this trend. Countries to which most cars manufactured in the Czech Republic are exported are showing a trend where households are willing to buy a second car in the next 12 months. Growing interest can be seen especially in the UK and France, and the consumer mood in Spain and Italy is also turning in a favourable direction. The German market has already surpassed the results of the strong years and demand for new cars remains high.

In terms of importance, the automotive industry is followed closely by the engineering sector. This sector returned to growth already during

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PROFIT RATE OF FIRMS IS INCREASING MASSIVELY As indicated by the financial results of non-financial enterprises, already since mid-2013, their profit rate has been continuously rising.

As shown by quarter-year data trends, the rate was at its historical high already at the beginning of 2015. At the same time, these enterprises tend to create record-high financial reserves, which are corroborated by bank deposit statistics. Firms operating in the Czech Republic are currently showing the highest profit rate and have the highest reserves to cope with any potential fluctuations of demand for their products or services in future. At the same time, thanks to the favourable development and good demand outlook, they are more willing to invest, mostly from their own resources.

Looking directly at the financial results of industrial enterprises, we note that it is primarily the big firms that are showing a growth of revenues and added value, which in turn still further increases their share in the overall performance of the entire sector. Large enterprises (with more than 250 employees) last year collected nearly three-quarters of their revenues from the sale of own products, even though their share of added value was only 61%. This shows that big firms unequivocally dominate the industry, and this dominance increases with time. It is a trend which is closely linked with the flow and especially the structure of direct foreign investments in the Czech Republic. The manufacturing industry alone attracted about one-third of foreign investments (2013 situation) and last year interest in entering this sector or developing existing projects increased further. The financial results of

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PETR DUFEK Financial Markets Analysts, ČSOB E-mail: pdufek@csob.cz

Photo: www.freeimages.com

the past economic recession and, at the beginning of 2013, rose above the production level of the successful years of 2007–2008. Despite a potential worsening of the outlook as regards demand, in consequence of the recession of the Russian economy, engineering continues to fare very well even in 2015, with the flow of new contracts steadily rising.

While in 2015 engineering production grew by 3.4% in real terms, this year it has accelerated to 4.2%. As regards exports, engineering firms are becoming firmly oriented towards the manufacture of air-conditioning systems, pumps, fittings, motors, special machinery, machines for construction and agriculture, etc. These are primarily goods (and subdeliveries) of an investment character, for which demand is beginning to grow, despite enduring risks in the global economy.

industrial firms (with more than 50 employees) show that their trade margin, too, developed favourably last year, even despite a price decline in the sector.

Absolutely the largest proportion of the CZK 51 billion shown in their accounts was generated by car factories, closely followed by food processing firms, whose margins accounted for 24% and 21% respectively of the total manufacturing industry.

While the manufacturing industry may pride itself on very good and steadily improving results in the past two years, mining and the energy sector are undergoing a less favourable period.

The reason is the declining prices of commodities combined with falling electricity prices in the German market, which this year dropped below the EUR 30/MWh limit, for the first time in history, as a result of the growing supply of “green energy” and cheap coal.

Industry unequivocally sets the rate and direction of the Czech economy. The economy is thus undergoing a period of massive boom, that in the final analysis leads to lower unemployment, which is already now the second lowest in the entire EU. Favourable prospects of European demand, combined with the favourable development of the prices of imported commodities, create prerequisites for the further upswing of the strongest sector of the Czech economy and for further economic growth. The risk factor today as in the past is the development of the European and Asian economies, of which the latter is currently witnessing a slowdown. For the time being, however, it seems that the current high investment rate and consumer demand on the old continent will easily manage to compensate for any potential negative effects. Industry is in a position to further strengthen its standing within the entire economy, reduce unemployment, and participate in the further improvement of the external balance sheet of the Czech Republic.

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Doing Business in the C zech Republic I I. C ze c h In du s tr y

CZECH ENGINEERING INDUSTRY EXPECTED TO GROW

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In 2015, Czech engineering industry is expected to grow by 2.1%, according to CEEC Research analytical company. Higher performance of the engineering sector is expected by 75% of managers. The Czech engineering industry is also expected to grow in 2016. The firms’ managers predict a 1.9% growth in 2016 over this year’s results.

The revenues of engineering companies are also expected to grow, which the companies put into the context of the generally improving economic development in both the Czech Republic and some of the countries to which Czech firms export their products, with a positive impact on their revenues. The outlook for 2015 shows that eight in every ten companies (79%) expect their revenues to grow. The weighted average of the answers of all the responding managers indicate that in 2015 revenues will increase by 3.7%. The survey reveals that the current capacity utilisation rate of engineering companies is at the level of 86%. In terms of size, the differences in the capacity utilisation rate are very small, although, in the case of large firms, the rate is slightly higher on an average (88%), with small and medium firms having their rates at the level of 86%.

Between 1993 and 2014, CzechInvest Agency mediated 203 engineering investment projects in the Czech Republic. This amounts to CZK 71 516.89 million invested in the engineering sector with the help of CzechInvest over the past 20 years and the creation of 22 450 jobs. Investors are attracted to the Czech Republic not only by its long engineering tradition, but also by its well-educated labour force and the strategic position of the Czech Republic in the centre of Europe. Some 6 700 firms are engaged in this sector in the Czech Republic. Among others, they include world renowned companies, such as Robert Bosch, Honeywell, Siemens, and Doosan. The most active investors are German, Japanese, and American firms. Up to 90% of products made in

the Czech Republic go for export, mainly to the European Union. The regions which attracted most of the engineering investments were the South Moravia, the Moravia-Silesia and the Ústí nad Labem Regions.

THOUSANDS OF NEW GRADUATES EVERY YEAR In 2014, approximately 3 500 students entered the labour market, while more than 16 000 were enrolled at Czech technical universities and over 12 000 students graduated from secondary technical schools.

Technical education has a long tradition in the Czech Republic, going back to the beginning of the 18th century, when the Czech Technical University was founded in Prague. Universities, from which new engineers graduate each year, also exist in other cities, for example Brno, Plzeň, Ostrava, and Liberec. Czechs boast a long history in engineering innovations. Worth mentioning, for example, is the invention of the ship screw and the jet weaving principle.

CZECH MACHINE TOOLS AND FORMING MACHINES CONQUER EVEN THE MOST DEMANDING MARKETS Thanks to tradition and quality, Czech manufacturers of machine tools and forming machines have always occupied a leading position among industrialised states. A characteristic feature of this sector is the significant surplus of production capacity over the absorption capacity of the domestic market. Historically, this sector has always relied on exports, and this applies to this day, when most of the production is finding outlets in foreign markets. At the same time, however, the volume of imports has also been growing massively in the past few years, especially thanks to the export of complete technology systems for foreign investors. In the modern history of the Czech Republic, the machine tool industry, which accounts for a very substantial part of Czech engineering production, is proving its high competitiveness even in the most

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CZECH AGRICULTURAL ENGINEERING – NEW MODELS AND HIGH QUALITY In the Czech Republic, there are about 100 manufacturers of agricultural and forestry machinery. According to a survey carried out by the Agricultural Machinery Importers Association and the Agricultural Association and A.ZeT, altogether 2 453 tractors were sold in 2014 as against 2 304 in 2013, an increase of 6.5%; in the same period 166 combine harvesters were sold as against 175 in 2013, a 5.1% decline year-on-year. The fact is, however, that sales dropped dramatically in 2009 and 2010, so that the 2014 figures are roughly at the 2006 level. Czech firms are becoming increasingly involved in international trade; in practice, until 2008 the import of foreign machines grew at the same rate as that at which Czech manufacturers were selling their products in foreign markets. Like domestic sales, exports in 2009 and 2010 dropped by approximately 30% in comparison with the previous period. In 2011, foreign trade witnessed a revival, and this trend also continued in the following years. According to the latest A.ZeT survey, exports and imports are at approximately the same level, of around 16 billion Czech crowns, with the volume of imports being comparable with the volume of exports.

The main types of imported machinery are the machines which are not manufactured in the Czech Republic, such as combine harvesters, high output tractors (over 120 kW) and presses. Regrettably, such machines

also include harvester cutters, which we used to manufacture ourselves, and which we also exported. However, their manufacture was terminated. The same applies to sugar beet harvesters, where we must now fully rely on imports.

In export, an important role is played

by Zetor tractors. Zetor exports about 86% of its output and the rest is sold in the Czech Republic and Slovakia.

Other important exporters are FARMET in Česká Skalice near Náchod, which manufactures soil-working machines; this category of machinery (cultivators, compactors, harrows) comprises the most frequently exported items. Other very important manufacturers and exporters are BEDNAR FMT Praha, followed by OPaLL Agri Dolní Životice and SMS CZ Rokycany. AGRIO MZS Křemže is known for its sprayers, and ZDT Nové Veselí for its trailers and semitrailers.

Other export articles are mowing machines, front loaders, manure spreaders, and a large number of small agricultural machines, including tools. Other machines, such as stump cutters and oleaginous seed processing machines, are also doing well. Among stable equipment manufacturers, FARMTEC Jistebnice, BAUER TECHNICS Tábor, and AGE České Meziříčí are worth mentioning. The quality of Czech products is comparable with European standards, evidence of which is the fact that a large number of machines and equipment developed in this country and manufactured in Czech factories under the colours of their foreign trade partners can be seen in the fields of European farmers. Not every Czech firm is prepared to accept this model; nevertheless it has become a general trend, and if such collaboration can provide work for Czech hands and make it possible for the products to reach foreign markets, there is no reason why it should not be done.

MORE INFORMATION: www.czechinvest.org; www.sst.cz; www.zetis.cz

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Photo: Zetor Tractor archives

demanding world markets. The dominant item within the machine tool and forming machine sector is machine tools, both in exports and imports. In terms of the volume of exports, 2014 was a record year for this item on a long-term basis, according to the Association of Engineering Technology. In that year, Czech firms exported machines worth CZK 16 385.538 million, in comparison with CZK 9 437.960 million ten years ago. Last year, most of the machine tools and forming machines were exported to Germany, Russia, and China. This means that those three countries continue to be the most important partners of the Czech Republic, who absorb more than 50% of total Czech exports.

In addition, the Czech Republic is the only one of the Central and East European countries (CEE) that is a member of the European Committee for the Cooperation of the Machine Tool Industries (CECIMO). In 2014, the Czech Republic was placed seventh in terms of the volume of production within this organisation, whose members comprise the strongest European economies and Turkey.

Dear Trade Partners, Colleagues, and Friends, LIEBEZEIT HYDRAULIK is a company operating in both the Czech domestic and foreign markets (particularly in Russia and the Middle East) in the field of hydraulic drives (wheel bucket excavators and dumping machines), and is especially known for its activities in the area of open-cast mining.

2006 and 2007 were years of key importance in the company’s development. In those years, it extended its design activities to cover also the development of new drive systems and built additional premises, better to meet the requirements of its customers.

Two years ago, the company has been awarded a contract in Russia, for the reconstruction of the KU800 bucket wheel excavator hydraulic walking system at the Stolenskyi G.O.K. works in Staryi Oskol. It is expected that, after the reconstruction has been completed, a further contract will be signed for the reconstruction of the hydraulic system of a ZP 5500 excavator, another machine in the same enterprise.

On behalf of LIEBEZEIT HYDRAULIK, I would also like to thank all our customers, partners and business friends for their cooperation.

Václav Liebezeit Company Manager LIEBEZEIT HYDRAULIK s.r.o.

Mládežnická 343, 418 01 Bílina, Czech Republic Phone/Fax: +420 417 829 082 | E-mail: vliebezeit@liebezeit.cz

www.liebezeit.cz

ARAKO spol. s r.o.

TRADITIONAL CZECH MANUFACTURER OF INDUSTRIAL VALVES INTRODUCTION ARAKO spol. s r.o. in Opava is a part of Atomenergomash, belonging to the Russian group Rosatom State Atomic Energy Corporation. ARAKO began to produce industrial valves more than 60 years ago, it was at the birth of the first production of valves for the energy industry in former Czechoslovakia. Also in the new millennium, the company ARAKO offers a wide range of products as well as a development, production and service of components for nuclear and thermal power plants, chemical and petrochemical plants.

PRODUCTS The ARAKO product range includes gate valves, globe valves, high-pressure globe and gate valves, swing check valves, lift check valves, strainers, ball valves, blow-down and continuous blow-down valves, energy reducers and special valves for nuclear power appliances such as quick acting valves, solenoid pilot valves, bellow-sealed globe valves, and KIP valves.

CAPABILITIES AND SERVICES DESIGN/DEVELOPMENT PRODUCTION OF INDUSTRIAL VALVES/MACHINING SERVICES SERVICE/VALVE REPAIRS

REFERENCES ARAKO lends support to projects of its partners by providing them with safe shut-off elements for their piping systems.

The major costomers include ČEZ, Enel, Siemens, Shell, ORLEN, AREVA, Alstom, Gazprom and other companies. ARAKO products can be found in 25 countries on four continents.

NEW PROJECTS Nuclear Power Engineering – Novovoronezh NPP, Leningrad NPP, Rostov NPP, Russian Federation Thermal Power Sector – US Steel Košice, Slovakia Petrochemical Industry – crude oil terminal Gdansk, Poland

ARAKO spol. s r.o.

Hviezdoslavova 18 746 01 Opava, Czech Republic Tel.: +420 553 694 111 E-mail: arako@arako.cz www.arako.cz

Doing Business in the C zech Republic I I. C ze c h In du s tr y

FUTURE DEVELOPMENT OF THE ENERGY SECTOR AND ITS IMPORTANCE FOR THE CZECH ECONOMY The energy sector is one of the most important branches of the Czech economy. Traditionally the country is very strong in the area of engineering and the manufacture of power generating facilities, which the industry can build and operate efficiently, including nuclear power sources. The Czech Republic is self-sufficient in electricity production, based predominantly on domestic brown coal supplies and nuclear power sources. On the other hand, natural gas and oil are imported from politically unstable countries, which may endanger safe and reliable supplies in future. The sufficient capacity of national and international transmission facilities creates prerequisites for international trade in electricity. The energy sector is a stable branch in the Czech Republic, which attracts foreign investors and creates good prerequisites for the further development of Czech industry.

DEPENDENCE OF THE ENERGY SECTOR ON PRIMARY SOURCES FROM POLITICALLY UNSTABLE AREAS Gas Industry Europe is more than 80% dependent on primary energy sources from politically unstable areas. None of the four Visegrad countries (V4), including the Czech Republic, can do without Russian natural gas. It is therefore unconditionally necessary to seek new, alternative transport routes, in addition to facilities carrying gas from east to west, ensure reverse flow from west to east and complete the Czech section of the Stork II gas pipeline running in the north-south direction and linking the Polish harbour liquefied gas terminal with the important junction in Baumgarten, Austria. Investment activities aimed at interconnecting European gas pipeline systems must be stimulated at both the EU and national levels. In this respect, positive news is the fact that the Czech Republic has updated its State Energy Concept taking this project into account.

The Oil and Petrochemical Industries Another risk commodity is crude oil. An alternative to the conventional transport route carrying Russian oil across Ukraine is the TAL Transalpine Oil Pipeline, making it possible to supply the Czech market with crude oil carried by tankers to Trieste, Italy, or via the Adria Oil Pipeline, which links the Omišalj harbour in Croatia with the Slovak part of the Druzhba pipeline. Currently the facilities on the alternative oil pipelines are used at nearly 100%, but the volume of oil transported by the “national” Druzhba oil pipeline is declining in both the Czech Republic and Slovakia. The reason is the excess refinery capacity in Europe and potential national interests in the case of the Polish owner of Czech oil refineries. A solution is to

build an all-European transmission system that will enable reverse flows and higher deliveries via the Druzhba pipeline, for example through the IKL oil pipeline to German refineries or more intensive cooperation of Slovakia’s Transpetrol with ÖMV in the construction of facilities enabling reverse supplies from Bratislava to Schwechat, Austria.

PRODUCTION OF ELECTRICITY FROM CONVENTIONAL SOURCES Conventional production of electricity from coal and nuclear material has a very strong position in the Czech Republic. The updated State Energy Concept supports the use of those sources, which we can operate very efficiently. A key issue is the enlargement of the nuclear power plants by adding new blocks to the existing plants in Dukovany and Temelín. Here, however, a stronger incentive must come from the state, as we can see, for example, in the UK, where measures have been taken to support investment in new facilities, irrespective of the type of production source, the aim being to ensure the availability and reliability of energy supplies. This motivates firms to long-term investment which, considering current energy prices amounting to 32 EUR/MWh, appears to be rather risky. These prices are below the level of the turning point of conventional energy sources production.

RENEWABLE SOURCES After the solar wave, energy production in the Czech Republic from renewable sources is stabilised. Water sources are being used at 99%, and as regards solar energy development, good prospects exist in the operation of facilities with a capacity of under 10 kW. Opportunities for development also exist in biofuel incineration. As it is hard to predict possibilities of developing production from renewable sources, the idea of electricity “storage” has come to the fore. This role can be played by pumped-storage power plants, which can pump water to the upper reservoir when there is a surplus of electricity and the price is very low, or even negative. There are localities in the Czech Republic suitable for this type of power station, but their construction would be expensive and demanding as regards administration. This reduces their potential in the future. A question is the development of other electricity storage technologies (batteries, fuel cells), or the active management of demand. Here, however, technological devel-

ARTHUR D. LITTLE, founded in 1886, is a global management consultancy specialized in strategy, innovation, and transformation. Today we help companies to create growth, overcome strategic challenges, improve innovation capabilities, and increase efficiency and competitiveness in the globalizedmarketplace. Prague office has been active since 1991, specializing in the Central and Eastern European markets, with a wide range of knowledge from different industries.For further information visit our website: www.adlittle.cz

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DEVELOPMENT OF ELECTRICITY PRICES Electricity prices will not go up markedly in the wholesale market in the course of the next three to five years. The reasons are the large number of production facilities and at the same time the low price of primary sources as a result of OPEC’s price policy and the theoretical possibility of “alternative supplies” of primary sources (shale gas or coal) to Europe. Therefore, oscillation of wholesale electricity prices at the level of 30–40 EUR/MWh can be expected.

The price for final users is experiencing a permanent paradigm. Prices in the wholesale market are declining, but since 2008 the prices for final users have been increasing. This growth is linked with the need to support the financing of investment in renewable sources, in certain cases their preferential connection to the system, and the need to finance projects to increase the capacity of existing transmission and distribution systems. There is also the problem of compensation payments for gas-fuelled plants temporarily being put out of action and acting as a stand-by source to ensure the reliability of electricity supplies. Investments are also needed to build facilities enabling the interlinking of the electricity markets, as required by EU legislation. This will concern not only the energy infrastructure, but also the area of information technologies. The benefit will be easier availability and greater reliability of electricity supplies, but no price reduction for final users can be expected.

CHANGES IN THE CONSUMPTION AND BEHAVIOUR OF CUSTOMERS Energy consumption is closely linked with industrial production and also with the weather. This is especially true of the gas industry. The last two mild winters in the CR did not do much good to the industry as regards revenues. The price, the same as consumption, which in the past correlated with gross domestic product, was stagnant. In the 1st half of 2015, the Czech economy grew, in the 1st quarter the growth was record high, amounting to 3.4%, but energy consumption is far from showing such a dynamic increase. The reason is greater energy efficiency in both the industrial and household sectors. It can therefore be said that energy consumption cannot be expected to grow massively in the next three to five years.

ENERGY STABILITY IN THE CR AND ATTRACTIVENESS FOR FOREIGN INVESTORS The Czech Parliament has recently passed a new Energy Act Amendment. The State Energy Concept has been updated and rules are being

KEY PLAYERS IN THE ELECTRICITY AND GAS MARKETS IN THE CZECH REPUBLIC The most significant player in the Czech market is the ČEZ Group, currently figuring among the ten most important players in the European market. ČEZ is a vertically integrated company operating in the area of coal mining, conventional and renewable energy sources production, trading, electricity and gas sale, electricity distribution, energy services and telecommunications. ČEZ Group has the capacity to flexibly react to changes in the energy sector, which ranks it alongside the best energy companies in Europe in terms of “Earnings before Interest, Taxes, Depreciation and Amortization” (EBITDA). The second most important player in the Czech market is the RWE Group, which concerns itself with gas transmission, distribution and sale, and energy services. The RWE company is one of the most successful entities within the RWE group. The stability, efficiency, and adequate profit rate of the Czech energy market has attracted foreign investors, who have entered the segment operating the network infrastructure. Other important players in the Czech market include the E.ON group, selling and distributing electricity and gas and providing energy services. The group´s portfolio also comprises smaller manufacturing facilities. Another company with a similar structure is Pražská energetika, operating on the territory of the capital city of Prague, which also invests in renewable energy sources. There are also a number of alternative electricity and gas suppliers and energy services providers in the Czech Republic, a segment with great potential for future development.

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prepared for the new regulation period in the area of distribution to come into force on 1 January 2016. In cooperation with the Energy Regulation Office, electricity and gas distributors have prepared a new draft of the tariff structure to ensure long-term stability of the distribution segment in the changing conditions of the Czech energy market.

From the foreign investors’ point of view, the Czech Republic is very attractive as regards the energy sector, both as concerns legislation and future development. More investment can be expected to go into production facilities, the strengthening of cross-border installations and protection against electricity spilling across the border, especially from Germany, to prevent overloading of the grid, investment in the infrastructure in the area of distribution, and the completion of the backbone gas pipeline running from north to south.

The parameters of the updated State Energy Concept and the draft to regulate the pipeline system create good conditions for ensuring a reasonable payback period for the capital invested.

IMPACTS OF NEW TRENDS IN THE ENERGY SECTOR ON INDUSTRIAL PRODUCTION IN THE CR For industrial production, prospects of more investment in the energy systems is a good signal. Such investment will ensure good energy supplies, thanks to the opening of alternative transport routes the risk of non-deliveries from politically unstable countries will be eliminated and a high quality and reliability of deliveries will be guaranteed.

For the period of the next three to five years, the prices are expected to remain stable. What we can predict with certainty is that no price reductions are in sight. Thanks to government support of programmes to raise energy efficiency, however, the whole economy can be expected to become less energy intensive.

This, of course, is a task to be tackled by industrial enterprises themselves.

In the final analysis, the results of this programme should lead to an overall reduction of energy costs and higher competitiveness of Czech enterprises in the Czech Republic and abroad.

DEAN BRABEC Managing Partner CEE, Arthur D. Little E-mail: brabec.dean@adlittle.com www.adlittle.cz

Source of the article: Czech Business and Trade Photo: www.sxc.hu

opment has not made enough progress to enable their massive development in the conditions of the Czech market in the next five years.

AUTOMOTIVE INDUSTRY IN THE CR: RECORD RESULTS The Czech automotive industry continued its high growth rate in 2014. According to the Automotive Industry Association (AIA), all-time record levels were achieved, besides vehicle production, also by the overall financial results.

“2014 was a year of records for the Czech automotive industry in many respects. The highest ever vehicle production in the Czech Republic was reflected in the excellent financial results of both our vehicle manufacturers and suppliers. For the first time, we surpassed the CZK 850 billion level in earnings from industrial activity and CZK 700 billion in exports. The automotive industry has thus significantly contributed to the growth of the Czech economy,” said AIA President Martin Jahn.

In 2014, the earnings of AIA companies rose by 14.9% compared with 2013, to a record CZK 852.6 billion (741.9 billion in 2013), while earnings from industrial production of the whole Czech Republic recorded a year-on-year growth of “merely” 8.5%. The rising effectiveness of the automotive industry is documented, among other things, by the growth rate of value-added creation, which increased by 18.7% year-on-year, while earnings rose by the above-mentioned 14.9%.

AIA companies exported 85.3% of their output last year (84.9% in 2013). Compared with 2013, the export of AIA companies rose by 15.5%, to an all-time maximum of CZK 727.7 billion (2013 = CZK 630.0 billion). Export thus increased at a faster rate than earnings. The AIA share in overall Czech exports amounted to 20.1% (2013 = 19.8%). European markets were dominant – 83% of car industry export headed to EU + EFTA countries. The automotive industry traditionally contributed a high proportion to the Czech Republic’s foreign trade balance. The overall Czech balance achieved a surplus of CZK 441.9 billion in 2014, to which the automotive industry represented by AIA companies contributed CZK 463.4 billion (exports CZK 727.7 billion – overall imports to AIA companies CZK 264.3 billion).

THE CR IS A WORLD POWER IN CAR MANUFACTURING “The Czech Republic confirmed in 2014 that it is a world power in the manufacture of cars and buses. Last year’s record output of 1.245 million cars ranks the country 13th in the world and 2nd in the number of cars produced per number of inhabitants,” AIA President Martin Jahn notes, adding: “In bus production, we are even number one in the world per the number of inhabitants.”

The earnings of suppliers increased by 8.4% to CZK 372.4 billion in 2014 and export rose by 9.0% to CZK 290.9 billion. The share of suppliers in the total earnings of AIA companies thus amounted to 43.7% and their shares accounted for 40% of exports and 69.6% of the number of employees in 2014. “At every opportunity, I emphasise that the Czech automotive industry is by far not only car manufacturers.

The supply sector is equally important and its results are outstanding. For example, the ten largest AIA exporters include six suppliers,” says the Director of the AIA Secretariat, Antonín Šípek. The number of employees in AIA companies increased by 3.3% to 112 877 year-on-year and the average wage in the automotive industry rose by 1.6% to CZK 31 867 in 2014. This is 24.1% above the average wage in the CR. The average wage in the automotive industry was above the national average also in blue-collar professions.

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2014 RESULTS OF THE AUTOMOTIVE SECTOR IN THE CR Production: CZK 991 billion Increase: 14.7 % Share in CR industrial production: 24.7%

Export: CZK 845 billion Increase: 15.2 %

Share in CR GDP creation (estimate): cca 7.4%

Share in total CR exports: 23.4%

Average wage*/ CZK 31.515, Increase: 2.7%

Number of employees**/ 155 000 persons

Average wage = 22.7 % above average in CR

Share in the number of employed = 3.1 %

*/ AIA companies + 25 companies which provided 2014 data **/ xxx persons (AIA companies) + yyy persons (25 companies) + zzz persons (estimate for other companies)

SUPPORT FOR EDUCATION AND RESEARCH One of AIA’s key activities is the long-term support of technical education on all levels. Bohdan Wojnar, AIA Vice-President, says: “Currently, the fourth industrial revolution is under way, characterised by the accelerating digitisation and the Internet of Things. We must not miss the boat. This is why the AIA and its members support the projects of technical education from university students to children of the lowest age. This may seem funny at first sight, but it is in children where the positive attitude to technology is formed.” The second pillar of future competitiveness of the Czech car industry is research, development and innovation. The number of research and development centres as well as staff numbers in this area are increasing.

GROWTH CONTINUES IN 2015 In the first half of 2015, a total of 690 302 road vehicles were produced in the Czech Republic, of which 676 775 were motor vehicles (+ 6.11%) and 13 527 were trailers (+ 9.34%). The relative highest output growth against the same period of 2014 was noted for the TPCA Czech company (+ 38.04%). However, the shares of three manufacturers (ŠKODA Auto, HMMC Nošovice and TPCA Czech) in overall car production

changed only little, compared to the end of 2014. The share of ŠKODA Auto in the overall production of passenger cars in the Czech Republic totalled 58.2% in the first half of 2015 (59.0% for the whole of 2014), for HMMC Nošovice it was 24.8% (24.7% for last year) and the share of TPCA Kolín amounted to 17.0% (16.3% last year). The domestic sale of cars manufactured in the Czech Republic increased by 20.78% and total exports rose by 7.14%. In the first half of 2015, a total of 2 196 buses were manufactured in the CR, which is a 33.58% increase in production compared with the same period of 2014. The main manufacturers are the companies of IVECO Czech Republic (83.4% share in total production) and SOR Libchavy (15.8% share).

Trucks are manufactured in the Czech Republic only by the TATRA TRUCKS company, which produced 406 vehicles in the first half of 2015. This was an increase of 20.47% over the same period of 2014. Motorcycle production in the CR is represented by the output of the JAWA Moto company. A total of 932 motorcycles of this brand were manufactured in the first half of 2015.

PRODUCT PORTFOLIO Hair care Sun care Insecticide + repellent sprays Shoe care Personal care are Household hold Car care are + technical spray

MANUFACTURER OF AEROSOL PRODUCTS SINCE 1961

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WWW.CZECHAEROSOL.CZ info@CzechAerosol.cz +420 417 813 607

Doing Business in the C zech Republic I I. C ze c h In du s tr y

CHEMICAL INDUSTRY IS DOING WELL The chemical industry is one of the three most important and largest sectors of Czech industry. With its revenues of around CZK 600 billion and more than 116 000 employees, it accounts for 16 % of the country’s industrial GDP and supplies products to important follow-up sectors – the automotive industry, construction, electrical engineering and many others.

Photo: PhotoCombo archives

In 2014, the development of the chemical industry was influenced by a number of external and internal factors. Among the external factors, the most important was the improving economic and financial situation in EU28, prompted by a boom in most EU member states, growing foreign demand and lower oil prices. As regards internal factors, the most important was the revival of domestic demand for chemicals in some of the follow-up manufacturing branches, in particular the automotive industry.

Domestic consumption, measured in current prices, rose significantly from approximately CZK 653.9 billion in 2013 to CZK 719.3 billion, i.e. by 10%, specifically by CZK 65.6 billion. In comparison with the previous development, this was a massive growth both at home and in foreign markets.

All aggregations of the chemical industry ended in black figures and the growth rate was high in all of them, mostly showing a two-digit increase: the CZ NACE 19.2 sector – Manufacture of refined petroleum products – despite the problems affecting European oil refineries, increased its revenues by nearly 10% year-on year, and CZ NACE 20 – Chemical industry – by more than 12.2%, thanks to high domestic and foreign demand. On the other hand, a much lower growth rate was shown by the sector – Manufacture of basic pharmaceutical products and pharmaceutical preparations (CZ NACE 21) – where revenues rose by only 1%. The situation last year in the rubber and plastics industry (CZ NACE 22.0) was very favourable, thanks to growing demand in the follow-up branches, especially in the automotive industry, where revenues rose by 10.8% year-on-year.

CZK 9.1 billion in comparison with 2013. All aggregations participated in the growth of exports, with the chemical industry and the pharmaceutical industry (CZK +14.2 billion and CZK +17.5 billion respectively) leading the list. The highest year-on-year export increase was shown by the pharmaceutical industry, CZ NACE 21.0, which rose by 44.9% to CZK 56.4 billion. In the CZ NACE 20.0 and NACE 22.0 sectors, exports grew at a lower rate (by +9% and +12.4% respectively), while in the CZ NACE 19.2 sector, exports rose by 16.7% year-on-year, despite the problems in the refinery industry.

The situation of imports in 2014 was similar to that prevailing in exports, with the proportion of pharmaceutical products showing an increase (+1.3 p.p.), while the proportion of products of the chemical industry and the rubber and plastics industry was stagnant and the proportion of refinery products dropped by 0.7 p.p. As in previous years, in 2014, too, the dominant territory for both Czech chemical exports and imports was the EU28 states. The share of the EU28 (including Croatia) of the total chemicals trade turnover in 2014 was high, as the immediate consequence of the enlargement of the EU with the accession of 13 new countries between 2004 and 2013. The most important partners of the Czech Republic were Germany, Slovakia, Poland, France, Italy, Austria, Hungary, the Netherlands, Belgium, and the UK.

FOREIGN TRADE In 2014, foreign trade in chemical products also developed very favourably, when its turnover increased by CZK 121 billion year-on-year, of which exports by 14.6% and imports by 13.2%.

Since exports grew at a similar rate as imports, the negative balance rose by

EMPLOYMENT, PRODUCTIVITY, AND WAGES In 2014, employment in the chemical industry increased by 2.8% in comparison with 2013, to 116 150 persons, while in the manufacturing industry the increase was 3.8% (+39 982 persons). Most sectors within the “great chemical industry” showed an employment increase in 2014, with the exception of oil refining. The largest number of new employees in 2014 was taken on in the rubber and plastics industry sector

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S H A R E S O F T H E C H E M I C A L I N D U S T R Y I N T H E B A S I C I N D I C ATO R S O F T H E M A N U FA C T U R I N G I N D U S T R Y I N T H E C R I N 2013 A N D 2014 18 15.8

15.9 12.7

14 10.7

in %

12

12.7

13

13.8

10.6

10 8 6 4 2 0 Revenues in CP

Employees

Exports

year 2013

Added value

year 2014

RESULTS OF THE CHEMICAL INDUSTRY IN 2014 from the global and European point of view, the Czech chemical industry is one of the less important sectors. In 2013, revenues in the chemical sector in the EU amounted to EUR 527 billion (data Cefic for 2013 – European Facts and Figures 2014). The share of the EU in the global chemical industry revenue was 16.7%, of which the Czech Republic accounted for 1.3%; massive year-on-year growth was noted of most industrial and financial indicators in comparison with 2013 in all branches of the chemical industry (overall increase in revenues by 10.4%, increase in the number of workers by 2.8%, mainly due to the considerable increase in the number of workers in the rubber and plastics industry).

A favourable development was also noted in investment activity, where total investment in the chemical industry increased by more than 13% year-on-year to CZK 26.6 billion; chemical export rose by 14.6% in comparison with 2013 and imports by 13.2%.

Despite higher export, the high negative balance of trade of the chemical industry rose by CZK 9.1 billion to minus CZK 122.3 billion. The CZ NACE 20 sector was most responsible for this, where the negative balance increased by nearly CZK 10 billion; a favourable development in 2014 was shown by the financial indicator accounting added value, which, thanks to high revenues, grew by more than 22.5 percentage points year-on-year. The greatest increase was shown in the sectors CZ NACE 19.2 (petroleum refining) and CZ NACE 20 (manufacture of chemicals and chemical preparations). (+3 303), while in the CZ NACE 20 and CZ NACE 21 sectors, movement was negligible. The indicator of productivity derived from revenues improved year-on-year due to high revenues in all aggregations, especially in the chemical and pharmaceutical industries (+10.3%).

In the CZ NACE 22 sector, too, the rate of labour productivity derived from revenues was favourable (+7.3%). Thanks to the improving development both at home and in the EU as a whole, wages in 2014 rose by approx. 2%, less than in the manufacturing industry. Average monthly wages in the chemical industry amounted to CZK 25 300.

DEVELOPMENT, INVESTMENTS New investments are planned for the forthcoming period. For example, Lena Chemical is preparing to build a new plant for the manufacture of building and coating chemicals in Šternberk near Olomouc, where some 50 people will find employment. The firm already operates one factory and, due to growing demand, needs to increase its production capacity. Lovochemie, a.s., the largest Czech manufacturer of nitric fertilisers, is planning to build a new granulation line in 2015. The costs are estimated at between CZK 1.5 billion and CZK 1.8 billion. The Czech affiliation of Lifocolor Farben, a German manufacturer of concentrated pigment preparations, has started the construction of a new factory in

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the Brno Industrial Park. Its construction will cost more than EUR 4 million, and the firm will invest more in development and production. The purpose of the planned investment is expansion, as the firm is planning to double its output in the next 20 years. In 2015, the chemical pharmaceutical company, Hacvia, is preparing to build a hall for the development and production of drugs in the industrial park in Kopřivnice on an area of about half a hectare of land. In the first phase, the firm will invest more than CZK 10 million in its construction and equipment. The supranational pharmaceutical firm of Cipla based in India is heading for the Czech market. Thanks to collaboration with S&D Pharma, it is planning to present here its combined inhalation medication against asthma and chronic lung obstruction. The British company, Simeys Trade, would like to build a plant in Jičín for the manufacture of drugs and food supplements worth at least CZK 1.5 billion. The plant would employ some 300 people in worker positions. The envisaged entry of foreign investments in the Czech Republic is expected to strengthen the competitiveness of the sector.

The restructuring of the sector, aimed at higher added value creation, is a slow process, as confirmed by kilogram prices, where the level of import prices is higher than that of exported products and, owing to low innovation activity, a number of specialised and technologically demanding products are often imported. At the same time, owing to the high technical standards and automation used by foreign manufacturers and in combination with the effect of the exchange rate regulation, it often happens that imported products are cheaper on the market than domestic ones. A part of the efforts to improve the competitiveness of the chemical industry is the need to cope with the requirements placed on the environment and other regulatory measures which are specific and more sensitive in the chemical industry than in other sectors. However, the linkage of the chemical industry with other developing sectors of the economy is a good prerequisite for its future development.

Photo: Institute of Photonics and Electronics of the CAS archives

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Doing Business in the C zech Republic I I. C ze c h In du s tr y

NANOTECHNOLOGY AS A HIGH CARD IN THE COMPETITION STRUGGLE Unique water treatment plants fitted with special nanofibre filters, which can clean water without the use of chemicals, or efficient lithium nano-accumulators, photocatalytic paints, thanks to which moulds disintegrate on walls in daylight, hydrophobic sprays, which know how to remove dirt from furniture, tiles, mirrors and window panes, antibacterial underwear with an admixture of silver nano particles: these are just a few examples of nano products developed by Czech firms.

Nanotechnology has long ceased to be just a matter of research, and has found practical use in a number of areas, including environmental protection, communication technologies, medicine and genetics, the manufacture of paints and the chemical industry in general.

More than 250 entities in the public and private sectors are already engaged in the area of nanotechnology. They view it as an great opportunity to leave their rivals behind, and are beginning to use industrial applications of nanotechnology especially in the manufacture of nanomaterials. The number of firms in the Czech Republic concerned with nanotechnology research and development and the manufacture of specific nano applications has trebled over the past seven years and their number already exceeds one hundred, according to a survey conducted by the Czech Society for New Materials and Technologies.

CHANCE FOR SMALLER FIRMS The most dynamic development is to be seen among small and medium-sized firms. In Contipro Biotech at Dolní Dobrouč in the Ústí nad Orlicí Region, for example, several dozen research workers specialise in the research and development of nanofibres and microfibres made from biopolymers (polysaccharides and proteins) and their use as preparations for the faster healing of wounds, the development of carriers for the targeted distribution of biologically active substances and preparations for tissue conditioning. Paints with a prolonged antimicrobial effect on the basis of nanomaterials and caoutchouc nanocomposites for rubber products used in the automotive and defence industries are being developed in the laboratories of SYNPO a.s. research organisation in Pardubice. Carbon nanostructures for sensors, in turn, are being developed at TESLA Blatná. Inotex at Dvůr Králové nad Labem concerns itself with the

development of multifunction textiles for use in medicine, while filtering materials based on nanofibres used in protective face masks are being developed in the laboratories of the company SPUR in Zlín. Asio, a manufacturer of sewage treatment plants based in Brno, develops nanofibre filters for air purification in water supply facilities. IQ Structures at Řež near Prague, in collaboration with an instrument manufacturing institute and a British partner work on new nanostructures securing documents, duty and postage stamps and goods against forgery.

The number of development projects of a nanotechnology nature

leading to the manufacture of new marketable products is increasing.

Grid electron microscopes from TESCAN in Brno offering an insight in the micro- and nano-world are currently used in 50 countries.

Two years ago, after selling its semi-conductor division, ELMARCO decided to specialise in the further development of the patented Nanospider fibrillation technology and the manufacture of equipment for making nanofibre materials on an industrial scale. The Moravian manufacturer of paints, Rokospol, produces a photocatalytically active paint developed in collaboration with the Institute of Inorganic Chemistry of the Academy of Sciences of the Czech Republic. The firm Timplant in Ostrava has developed and supplies a dental implant substance containing nanostructured titanium. Another Czech firm, nanoSPACE, in Domažlice makes anti allergy beddings from patented anti-allergen nanofibre textile material made by the company Nanovia. Inorganic nanofibre materials from Pardam, Pardubice, are used as separators of 3d lithium batteries, developed by HE3DA in Prague.

According to the company director Jan Prochazka, these accumulators, thanks to their high capacity and safety, have a good chance to be used in hybrid motorcars and the linking of several cells and modules makes it possible to create big and exceptionally powerful accumulators for the power industry.

LINKING RESEARCH AND PRODUCTION

NANOCON 2014 CONFERENCE IN BRNO New nano applications have come into being and are being developed in the Czech Republic. They were presented by their makers and inventors at the NANOCON conference (www.nanocon.eu) held in Brno from 14 to 16 October 2015 and devoted to the research and development of nanomataerials. The opening lecture was presented by Prof. Dr. Louis E. Brus from Columbia University in the USA, discoverer of colloidal semiconductor nanocrystals known as quantum dots. Another speaker was the German scientist Professor Dr. Patrik Schmuki from the University in Erlangen, a specialist in photocatalysis. The papers presented

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there by Czech and foreign researchers were concerned with nano materials and their properties and ways for their preparation, nano-structural metallic materials, nanosilver, polymer nanocomposites, carbon nanomaterials, materials for electronics and optics and nanoceramic materials. The participants also focused on bio-materials used in medicine, e.g. magnetic nano-biocomposites and their use. To underline the need for the responsible research and commercialisation of nanotechnologies, one of the conference sections dealt with nanotoxicity and labour safety when working with nanomaterials and nanoparticles.

JIŘINA SHRBENÁ Head of the Nano Department of the Czech Society for New Materials and Technologies E-mail: jirina.shrbena@inovapro.cz www.csnmt.cz

WHAT IS NANOTECHNOLOGY? Nanotechnology is research and technological development at atomic, molecular, or macromolecular level, on the scales of approximately 1–100 nanometres (nm, i.e. 10-9 metre), and the application of this knowledge to create useful materials, structures and devices.

Photo: Mendel University in Brno archives

The NANO IRON firm in Rajhrad near Brno is an example showing that the work of a university research team can result in the establishment of a manufacturing company even in Czech conditions. It manufactures nanoparticles of elementary iron, which are used by clean-up companies for the remediation of groundwater contaminated with chlorinated hydrocarbons. “Nanoparticles produced by this technology have been applied in real remediation at a number of sites in the Czech Republic and several pilot experiments have been carried out in different localities in Europe and the USA,” says Radek Zbořil, one of the founders of NANO IRON and Professor at Palacký University of Olomouc. The technology developed at the Faculty of Natural Sciences of Masaryk University in Brno, which makes it possible to substitute chemicals used in the treatment of materials by a special electric discharge generating a cold plasma, was a driver for the establishment of the ROPLASS spin-off firm.

“Starting a business based on the manufacture of nanomaterials or nanoproducts, however, is no easy thing to do,” says Marcela Munzarová from Nanovia, Litvínov, the first firm in the Czech Republic to start industrial production of materials from nanofibres. The firm sells most of its textiles, used for example to make respirators, face masks, membranes for textiles and water and air filters, to foreign countries. “Unless the manufactured volume is at least close to industrial proportions, production is not efficient,” she points out. In addition, nanofirms in the Czech Republic are feeling the lack of clear rules regulating the safety of labour and protection of the environment. This fact was another driver at the beginning of the year to set up the Czech Nanotechnology Industries Association as a platform to promote the interests of its members at home and abroad.

HOW TO DO BUSINESS IN THE CZECH REPUBLIC

FORMS OF BUSINESS ACTIVITIES IN THE CZECH REPUBLIC Czech or foreign natural persons or legal entities can perform the business activity in the Czech Republic if they comply with the Czech law. The condition is generally the issuance of a Czech trade license regulated by the Trade Licensing Act or another specific permit regulated by a number of specific acts, depending on the type of business activity. The exception from this condition applies to entrepreneurs from another EU member state in case of temporary provision of services based on the trade licenses issued in such member state. must meet a set of general conditions, including being 18 years old and above, having legal capacity and being a person of good character. In the case of restricted, skilled, and concessionary trades, a natural person is additionally obliged to meet special conditions – a professional qualification or other competence as defined by the law for each profession.

In case of non-compliance with these special conditions, a natural person is obliged to conduct a trade through the intermediary of a responsible representative, who is obliged to meet both the general and the special conditions pertaining to the given type of trade.

Access to the Trade Register is free and available online at www.rzp.cz.

CONDUCTING BUSINESS USING A SPECIAL LICENCE

CONDUCTING BUSINESS WITH A TRADE LICENCE According to the Trade Licensing Act (Act No. 455/1991 Coll.), the business activity is conducted systematically, individually, using one’s own name, on one’s own responsibility, with a view to make profit and under the conditions laid down under this law. The different professions requiring a trade licence are listed in appendices 1-4 of the Trade Licensing Act. The Trade Licensing Act differentiates between notifiable trades, where the licence is granted once the agreed conditions are met and the Trade Office is notified, and concessionary trades, which require state permission – i.e. the granting of a concession; this is not accorded automatically. Notifiable trades are further divided into skilled, restricted, and free trades. Every natural person who is considering pursuing a trade

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PRACTICE OF AGRICULTURE The third type of natural persons encompasses persons who practise agriculture and who are registered under a special regulation – the Agriculture Act (Act No.252/1997 Coll.).

Agriculture includes forestry and water resource management. An agricultural entrepreneur is any person who practises agriculture for profit and meets the agreed conditions, including being at least 18 years of age, having legal capacity and Czech or EU citizenship – all other natural persons need permanent residence in the Czech Republic and a certification of a basic knowledge of the Czech language.

Photo: www.freeimages.com

NATURAL PERSONS AS ENTREPRENEURS A natural person or entrepreneur is, according to Czech law, a person who conducts business on the grounds of a trade licence, a person who conducts business using a special licence, or a person who practises agriculture and is registered according to a special regulation.

Citizens of other countries are allowed to conduct business in the Czech Republic under exactly the same conditions and to the same extent as Czech citizens, unless the law says otherwise. For this purpose, the term foreign person applies to a natural person whose permanent residence is outside of the Czech Republic. Therefore, it is permanent residence, and not citizenship, that is decisive here. Visa are required in certain cases.

The different business objects for the given category are the professions listed in Section 3 of the Trade Licensing Act, and which are exempt from its provisions. First and foremost, this applies to professional services (doctors, advocates, expert witnesses, auditors, tax advisers, dentists, etc.). Conditions for each of these professions are specifically defined by separate laws.

Doing Business in the C zech Republic III. How to Do Business in the C zech Republic

LEGAL ENTITIES The Act on Business Corporations recognises the following types of business entities: limited liability companies joint-stock companies general partnerships limited partnerships co-operatives Societas Europaea (European companies) European Economic Interest Grouping (EEIG).

The Czech Civil Code recognise also other forms of legal entities, such as trust and associations, which can also perform business activity, but this should not be the main purpose of their existence.

A Czech legal entity is an entity that has its registered office in the Czech Republic.

Commercial companies are formed in two stages. The first stage involves founding the company and the second stage

involves establishing it as a legal person, as of the date of its entry in the Commercial Register. The Commercial Register is maintained by the courts. Only after registration in the Commercial Register the company is entitled to commence its business activity in the Czech Republic. Access to the Commercial Register is free and available online at www.justice.cz.

BRANCH OFFICE A branch office is merely an organisational unit of the founding company and it is not regarded as a separate legal entity and does not have its own legal capacity. It is an entity legally dependent on its head office, although it has an independent management and their own accounts.

The branch office must be registered in the Commercial Register and the founder must appoint a director of the branch office who acts on behalf of the founding company, but this is only in relation to matters concerning the branch office.

In case of commencement of any business activity in the Czech Repubic (i.e., continuous business activity carried out independently and aimed at generating a profit) it is important to ensure that the respective trade licenses or other permits in the Czech Republic are obtained and registration with the Czech Commercial Register is performed.

MOJMÍR JEŽEK rutland ježek, advokátní kancelář s.r.o.

E-mail: mjezek@rutlandjezek.com

INCORPORATING A LIMITED LIABILITY COMPANY The limited liability company is the most common form of business corporation in the Czech Republic.

How to establish such company?

A limited liability company is established by a Memorandum of Association, which is signed by all the founders, i.e. the future shareholders or just one future shareholder. In both cases, it is essential that it is executed in a form of notarial deed of a Czech notary.

The notary fee usually does not exceed CZK 5 000 (EUR 180) and is dependent on the amount of the registered capital.

The founding deed must contain basic information about the company, e.g. the business name, registered address, identification of the shareholders, types of business interests (shares) held by each shareholder and specification of rights and obligations attached to such business interests (assuming various types of business interests are allowed), a list of company’s business activities, number of executives and how they will act on behalf of the company, amount of registered capital, amount of contribution of each shareholder to the company’s registered capital, identification of

the initial executives and appointment of contribution administrator.

The business name must not be interchangeable with any already existing name of another company registered in the Commercial Register.

This is why the business name being considered by the founders should be checked out in this regard in advance at the website www.justice.cz.

If the company’s business name contains the name of a living natural person, the founders must obtain the consent of such person.

OBTAINING A BUSINESS LICENCE Once the founding deed was drawn up, the initial executives need to obtain the trade license at the Trade License Office unless the company’s business activity includes only management of own property, letting of real estate, residential units and non-residential units or a special permit is required. The administration fee for obtaining the trade license at the Trade License Office amounts to CZK 1 000.

BUSINESS INTERESTS The founding deed of the limited liability company may allow formation of various types of business interests (shares) held by shareholders of the company. Furthermore, the business interest of the shareholder could be represented by a common certificate issued as registered security. Shareholders of the limited liability company can own more than one business interest in the company.

REGISTERED CAPITAL AND PAYMENT OF CONTRIBUTIONS INTO THE REGISTERED CAPITAL The minimum requirement for the registered capital of the limited liability company is CZK 1. However, it is recommended that founders agree on the higher amount of the company’s registered capital than the minimum amount.

A shareholder’s contribution into the registered capital is either in

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ENTRY OF THE COMPANY INTO THE COMMERCIAL REGISTER The application for entry of the company into the Commercial Register has to be submitted either by all executives of the company on the prescribed form with their officially verified signatures or the registration can be performed through the notary who can register the company into the Commercial Register directly. The application must be submitted to the competent court depending on the location of the company’s registered office within 6 months from the foundation of the company; otherwise the founding deed is considered as withdrawn. The founding deed may stipulate another period.

The registration court fee amounts to CZK 6 000. The fee amounts only to CZK 4 000, if the registration is performed by the notary.

Irrespective whether the application is submitted by the company’s executives or through the notary, the following documents must usually be presented: a notarial deed containing the founding deed, a trade licence or licence for other type of business activity, a deed attesting the legal basis for use of the premises at which the company’s registered office is situated, e.g. a written consent of the owner (such consent may not be older than 3 months and signatures on the document must be legally certified), together with the decision of the company’s statutory body on the company’s registered office location, a document attesting the fulfilment of the obligation to pay prescribed contributions into the registered capital. This fact could be proved by a declaration of the contribution administrator and confirmation from the bank that the relevant monetary sums have been credited to the bank account of the company, documents attesting the fact that persons who are to be registered as members of the company’s bodies satisfy the requirements set forth by law, i.e. that they are at least 18 years old, have legal capacity, are

without a criminal record related to the business, and that there are no impediments to their operating of a trade in accordance with the Trades Licensing Act and other legal regulations (such as an affidavit concerning such facts and an extract from the criminal record or equivalent document issued by the relevant authority of the EU Member State in which they were last residents in the case of citizens from another than EU Member State) the consent of the person being registered to their registration in the Commercial Register.

The necessary forms for entering the company into the Commercial Register can be found in Czech on the website of the Czech Ministry of Justice https:// or.justice.cz/ias/iform/index.html?0.

Documents presented to the Commercial Register must be in Czech, including all their attachments; any deeds in a foreign language must have a legally certified translation unless it is drawn up in one of the official languages of the European Union (in that case a simple translation is sufficient). For certain types of foreign deeds (e.g. an extract from a criminal register or commercial register) a special form of higher authentication is required, one that certifies the authenticity of the issuing authority, generally identified as an apostille or ‘super-legalisation’, depending on whether the country issuing the deed is a signatory to the so-called Hague Apostille Convention.

The statutory deadline for registration of the company is five working days from submission of the application. If, within this period, the court does not register the company or request additional documents from the applicants, the company is considered as registered. The notary can register the company into the Commercial Register almost immediately.

In order to submit an application to the Commercial Register or Trade Register, it is not mandatory to be represented by a lawyer. Nonetheless, with respect to fulfilment of formal requirements, we recommend that an attorney-at-law is engaged.

The average amount of time needed to establish a limited-liability company in the Czech Republic is approximately 19 days but registeration within a couple of days is also possible.

ROMAN MACHÁČEK rutland ježek, advokátní kancelář s.r.o.

E-mail: rmachacek@rutlandjezek.com

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Photo: www.sxc.hu

monetary or in-kind form, whereas all contributions of founders are administered by the contribution administrator, who is usually one of the founders. Monetary contributions are deposited to a special bank account established for this purpose. The in-kind contributions must be appraised in the expert’s opinion drafted by the expert chosen by the founders from the official list of experts. Before submitting the application for entry, the company into the Commercial Register, any in-kind contribution must be fully paid up, while at least contribution premium (if any) and 30% of each monetary contribution must be paid.

Doing Business in the C zech Republic III. How to Do Business in the C zech Republic

INCORPORATING A JOINT-STOCK COMPANY The joint-stock company is the second most common form of business corporation in the Czech Republic.

How to establish such company?

A joint-stock company is established at least by one founder on the basis of Articles of Association, which are executed in the form of the notarial deed of a Czech notary and signed by all the founders.

The notary fee usually does not exceed CZK 16 000 (EUR 580) and is depending on the amount of the registered capital.

The founding deed must contain basic information about the joint-stock company, such as business name, registered address, list of the company’s business activities, number of shares and their nominal value, specification of shares and whether the company issues registered shares or bearer shares, the amount of the registered capital, the number of votes attached to an individual share, the total number of votes in the company, and the estimation of costs related to the establishment of the company.

The business name must not be interchangeable with any already existing name of another company registered in the Commercial Register. This is why the business name being considered by the founders should be checked out in this regard in advance at the website www.justice.cz.

OBTAINING A BUSINESS LICENSE After the founding deed has been executed, the members of the company’s statutory body need to obtain the trade license at the Trade License Office unless the company’s business activity includes only management of own property, letting of real estate, residential units and non-residential units, or a special permit is required. The administration fee for obtaining the trade license at the Trade License Office amounts to CZK 1 000.

CORPORATE GOVERNANCE The founders could choose between the monistic and dualistic model of corporate governance. In case of the former, the company establishes a Board of Directors and a Supervisory Board. The Board of Directors is in charge of the management of the company’s business. The Supervisory Board supervises the exercising powers by the Board of Directors.

In case of the latter, the company has only an Administrative Board that determines the basic orientation of the management of the company’s business and supervise its proper execution. The Administrative Board elects a statutory director, who is responsible for the management of the company’s business. The chairman of the Administrative Board could also be the company’s statutory director.

All the above-mentioned company’s bodies could have only one member.

SHARES There are two types of shares in the joint-stock company, i.e. shares with no special rights (ordinary shares) and shares with special rights (such as different or fixed profit shares or different vote weightings shares).

The so-called no-par value shares are shares that have nominal value.

REGISTERED CAPITAL AND PAYMENT OF CONTRIBUTIONS INTO THE REGISTERED CAPITAL The minimum amount of the registered capital of the joint-stock company is CZK 2 000 000 (EUR 73 000).

A shareholder’s contribution into the company’s registered capital may take either monetary or in-kind form, whereas all contributions are administered by contribution administrator, who is usually one of the founders. Monetary contributions are deposited to a special bank account identified in the Articles of Association. The value of in-kind contributions is determined by the expert chosen by the founders from the official list of experts.

Before submitting the application for registration of the company into the Commercial Register, each founder must pay up at least the share premium and all the founders must further pay up in aggregate at least 30% of the nominal value of the subscribed shares. All in-kind contributions must be fully paid.

ENTRY OF THE COMPANY INTO THE COMMERCIAL REGISTER The application for entry of the company into the Commercial Register could be either submitted by all the members of the company’s statutory body on the prescribed form with their officially verified signatures or the registration can be performed through the notary, who can register the company into the Commercial Register directly. The application

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must be submitted to the competent court depending on the location of the company’s registered office within 6 months from the foundation of the company; otherwise the founding deed is considered as withdrawn.

The founding deed may stipulate another period.

The registration court fee equals to the amount of CZK 12 000. The fee amounts to CZK 9 300 only, if the registration is performed by the notary.

Irrespective of whether the application is submitted by the company’s members of the statutory body or through the notary, the following documents must usually be presented: a notarial deed containing the founding deed, a trade licence or licence for other type of business activity, a deed attesting the legal basis for use of the premises at which the company’s registered office is situated, e.g. a written consent of the owner (such consent may not be older than 3 months and signatures on the document must be legally certified), together with decision of the company’s statutory body on the company’s registered office location, a document attesting the fulfilment of the obligation to pay at least statutory minimum contributions into the registered capital. This fact could be proved by a declaration of the contribution administrator and a confirmation from the bank that the relevant monetary sums have been credited to the bank account of the company, documents attesting the fact that persons who are to be registered as members of the company’s bodies satisfy the requirements set forth by law, i.e. that they are at least 18 years old, have legal capacity, are without a criminal record related to the business, and that there are no impediments to their operating of a trade in accordance with the Trades Licensing Act and other legal regulations (such as an affidavit concerning such facts and an extract from the criminal record or equivalent document issued by the relevant authority of the EU Member State in which they were last residents in the case of citizens from another than EU Member State) the consent of the person being registered to their registration in the Commercial Register (members of the company’s statutory body), the decision on the appointment of the chairman of the Board of Directors, chairman of the Supervisory Board, chairman of the Administration Board or statutory director, if applicable.

The necessary forms for entering the company into the Commercial Register can be found in Czech on the website of the Czech Ministry of

Justice https://or.justice.cz/ias/iform/ index.html?0. Documents presented to the Commercial Register must be in Czech, including all their attachments; any deeds in a foreign language must have a legally certified translation unless it is drawn up in one of the official languages of the European Union (in that case a simple translation is sufficient). For certain types of foreign deeds (e.g. an extract from a criminal register or commercial register) a special form of higher authentication is required, one that certifies the authenticity of the issuing authority, generally identified as an apostille or ‘super-legalisation’, depending on whether the country issuing the deed is a signatory to the so-called Hague Apostille Convention.

The statutory deadline for registration of the company is five working days from submission of the application. If, within this period, the court does not register the company or request additional documents from the applicants, the company is considered as registered. The notary can register the company into the Commercial Register almost immediately.

In order to submit an application to the Commercial Register or Trade Register, it is not mandatory to be represented by a lawyer. Nonetheless, with respect to fulfilment of formal requirements, we recommend that an attorney-at-law is engaged.

ROMAN MACHÁČEK rutland ježek, advokátní kancelář s.r.o.

E-mail: rmachacek@rutlandjezek.com

STEPS FOR ACQUIRING A CZECH TRADE LICENCE

Notifiable trades are characterised by the fact that the authorisation to trade becomes valid immediately at the very moment of notification (not later than when the trade licence is issued).

To illustrate the various types of trade, here are a few examples. Trades categorised as vocational include carpentry, bakery and confectionary, bricklaying and plastering, brewing, etc. Professional trades include activities such as providing or brokering consumer credit, working as an optician, or animals trading.

In order to acquire the concession for concessionary trades, it is necessary to demonstrate the relevant professional eligibility and in some cases also to meet some additional requirements. Trades that require concessions

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include operating a travel agency, road freight transport or a security firm employed to protect other people’s property.

Those interested in a licence for a notifiable trade can obtain one by notifying the trade, while applicants for a concession can submit their application at one of the general trade offices – central registration points, by means of government administration contact points (Czech-Point) or do so electronically

Photo: www.sxc.hu

Trades are divided under the Czech Trades Licensing Act (Act No. 455/1991 Coll.) into notifiable trades, which can be obtained based on notification, and concession trades, which can only be pursued on the basis of a special business licence – a concession. Notifiable trades are categorised into three further groups: vocational, professional, and unqualified.

using the Trade Register web system.

Trades are notified and applications for concessions are submitted using a standard registration form. Forms can be obtained at any trade office, and in most cases are freely available at the Ministry of Industry and Trade website http:// www.mpo.cz/dokument77388.html for natural persons and http://www.mpo. cz/dokument77394.html for companies (forms must be completed in Czech).

GENERAL CONDITIONS FOR PURSUING A TRADE The general conditions applying to a natural person pursuing a trade are: to have reached the age of 18 years, to have full legal capacity and a clean criminal record. According to the Act, a person with a clean criminal record is someone who has not been finally convicted of intentionally committing a criminal act, if it was committed in connection with business activities, or with the business object for which they are applying or notifying, unless they are now considered as not having been convicted of such offence.

PROFESSIONAL ELIGIBILITY Alongside the form, in the case of a professional or vocational trade or concession, the notifier or applicant must submit a document attesting its professional eligibility for the relevant trade, or of the appointed responsible representative, together with his/her signed declaration that he/she consents to the appointment. The signature on

the declaration must be officially certified. If documents are in a foreign language, they must be translated into Czech by a sworn translator (a list can be found at http://datalot.justice.cz/justice/repznatl. nsf/$$SearchForm?OpenForm), with the exception of documents submitted by nationals of EU Member States or by a legal entity with its registered office, central administration or principal place of business activities in an EU Member State, unless there are doubts as to the translation’s correctness.

OTHER TERMS AND CONDITIONS Further, a document attesting the legal basis for use of the premises on which the trader has located its place of business (e.g. a lease contract) must be submitted, and also a receipt for payment of the administrative fee, which is CZK 1 000 (EUR 40) for a notifiable trade (if multiple trades are notified simultaneously, the fee is charged only once) must be sumbitted. Foreign natural persons, except for nationals of EU Member States or of a State Party to the Agreement on the European Economic Area, or the Swiss Confederation, must attach to their notification of a trade or concession application a document corroborating that they have been granted a visa to stay longer than 90 days or have had their long-term residency permit. A foreign natural person must further provide an extract from the criminal register or equivalent document issued by the relevant court or state authority of the country of which the individual is a national; the extract must not be more than three months old.

The Trade Office is obliged to make the entry into the Trade Register within 5 business days of receiving the notification and issue the entrepreneur an extract if the notifier meets the conditions set out in the Trades Licensing Act. Where concessions are concerned, the Trade Office shall decide the matter within 30 days of receiving the application, provided that all of the relevant particulars are met. Subsequently, within 5 business days of the decision granting the concession having come into effect, an entry is made in the Trade Register and an extract is issued to the entrepreneur.

VOJTĚCH MAKOVEC rutland ježek, advokátní kancelář s.r.o.

E-mail: vmakovec@rutlandjezek.com

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In 2015, legislative changes continued to facilitate business activities in the Czech Republic and reduce the administrative burden for businessmen. Not much, however, has changed as regards the general conditions for doing business, and the changes really mean simplification, not complication.

The most important changes made in 2015 so far include changes leading to faster and cheaper registration in the Companies Register and changes in the functioning of Trade Licence offices.

QUICKER AND CHEAPER REGISTRATION IN THE COMPANIES REGISTER In the framework of private law recodification, Parliament have passed a new Act on public registers of legal and natural persons, which also regulates the registration of legal entities in the Companies Register.

The Act, already effective in its version from 1 January 2014, stated that, in addition to the Commercial Court, registration in the Companies Register can also be effected by a Notary Public (“direct entry”).

Because of delays in processing the changes and their feeding into the Companies Register information system and the non-existence of legislation concerning the amount of administration fees, this option was only made possible as from 1 May 2015, when the Court Fees Act

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Amendment became effective. This means that, from June 2015, businessmen may use the services of either a Notary Public or the Commercial Court.

The main aim of this legislation was to simplify and speed up the process of registration in public registers. While in court, court proceedings must be held to prove that the registration has been implemented, the Notary Public makes the entry in the register immediately, provided that the required conditions have been met.

Therefore, in most cases a registration carried out by a Notary Public is quicker (and in many cases also cheaper) than a registration effected by the court.

However, it will not be possible to use the direct entry in all cases, as the entry must be based on a Notarial Deed and all the documents required by law for entry in the public register or must be presented to the Notary Public for being filed in the collection of documents. For example, if a company wants to increase its registered capital, further steps are required which will have to be registered in the relevant Deeds Registry, and this may incur further costs. Immediate entry in the register and

Photo: Accenture archives

MORE BUSINESS RELIEFS IN THE CZECH REPUBLIC IN 2015

Doing Business in the C zech Republic III. How to Do Business in the C zech Republic

the corresponding copy of the entry in the public register, however, may justify those extra costs. Unlike registration through the Commercial Court, clients who have their entry effected by the Notary Public will not have to wait up to five working days to have their entry registered.

Court fees for registration in the public register carried out by the Notary Public are lower than those effected by the Commercial Court. In this case, however, clients must reckon with having to pay a fee to the Notary Public for making the entry in the public register, which is CZK 300 excl. VAT, and possibly remuneration for drawing up the Notarial Deed certifying the entry in the public register, which is CZK 1 000 excl. VAT. So that if such an “additional” Notarial Deed has to be drawn up for the entry in the public register to be effected, registration through the Notary Public will not provide any financial benefit.

In the case of the initial registration of a joint stock company carried out by the Notary Public, the court fee shall be CZK 8 000 instead of CZK 12 000, and, in the case of the initial registration of a limited liability company, the fee shall be CZK 4 000 incl. notary fees instead of CZK 6 000. Besides initial entries, companies may also have changes in the Companies Register made through the Notary Public. In that case, businessmen will make a saving, as the fee will be CZK 1 000 instead of CZK 2 000.

DIGITALISED AND “DEPERSONALISED” REGISTERS OF TRADES Trade Licence offices will digitalise all documents filed after 1 January 2015 and will give all the other Trade Licence offices remote access to them. This change will facilitate the procedure of filing applications for new licences for businessmen. In practice, businessmen will no longer be required to produce documents proving facts which have already been proven before, on condition that the facts have not changed. For example, businessmen will no longer be required to prove anew the legal reason for using the space or their professional competence, or, in the case of foreigners, to produce a criminal record certificate. However, it continues to apply that the certificate must not be more than three months old.

The Trade Licence Register significantly increases the protection of the businessmen’s personal data. Data on businessmen´s residential addresses have been transferred from the public to the non-public section, which will only be open to persons who prove their legal interest. The same applies to the handling of digitalised documents, which the Trade Licence offices will have obtained from the businessmen. A new provision is that data concerning persons who have forfeited their business licence will become non-public, but only after the lapse of four years.

LOWER MINIMUM LIMIT FOR FINING SCHWARZ SYSTEM OFFENCES The Employment Act reduces the minimum amount of fines for the illegal employment of persons, termed as the Schwarz System (the system whereby the employer does not have regular employees, but engages self-employed people, for whom he does not have to pay health and social insurance), from the original CZK 250 000 to CZK 50 000.

In 2014, the Constitutional Court ruled that the minimum amount of the sanction for illegal employment amounting to CZK 250 000 was obviously inadequate, and decided to abolish the fine. However, legislators have re-introduced it, but its level is substantially lower.

MOJMÍR JEŽEK rutland ježek, advokátní kancelář s.r.o.

E-mail: mjezek@rutlandjezek.com

LEASE OF BUSINESS PREMISES Since 1 January 2014, the Czech Civil Code has regulated the lease of premises for business purposes, even in relation to lease agreements entered into prior to this date. Compared to general types of property leases, lease of business premises has several specific features. Landlords, property developers and their tenants who are leasing business premises in the Czech Republic should certainly be aware of them.

REQUIREMENTS OF A LEASE CONTRACT The essential requirement of a lease contract is now simply an agreement concerning the object of the lease and the amount of rent. The purpose of the lease no longer needs to be specified in the contract. If, however, the object of the lease will not be used at least predominantly for the operation of business, then no specific conditions shall apply. Neither is it required to have the object of lease approved by the occupancy permit for the contract to be valid.

The regulation of leases in the Czech Civil Code is not mandatory. Parties therefore have the opportunity to manage their mutual rights and obligations according to their own specific requirements and needs.

The lease contract does not need to be renegotiated and rewritten due to the adoption of the new legislation, although in practice the parties prefer this option to exclude application of certain newly introduced provisions of the Czech Civil Code.

TERMINATING A LEASE OF BUSINESS PREMISES Unless the contracting parties agree otherwise, the notice period for a lease with an indefinite term is six months, and three months for a fixed term lease. The notice on a fixed term contract must state the reason for terminating the lease, otherwise the notice is not valid.

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agreement by the tenant, by the tenant if the landlord fails to provide the tenant with sufficient protection against claims of a third party, who asserts the right of ownership or another right in a thing or claims that the premises be surrendered or vacated. Nevertheless, the breach has to be specified in the notice and a possibility to remedy the breach before the notice has to be given.

SIGNS REGULATION

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COMPENSATION FOR TAKING OVER A CUSTOMER BASE One entirely new legal mechanism is the payment of compensation for taking over a customer base, i.e. a group of customers who were regular clients of the tenant, provided that such base was created by the tenant himself. The tenant is entitled to compensation for the take-over of a customer base in cases where the lease is terminated by notice of the landlord and at the same time the customer base is taken over by the landlord or a new tenant. However, the tenant will not be entitled to compensation for the takeover of a customer base if the landlord has given a notice to the tenant for the reason of the tenant’s gross breach of obligations.

MICHAL DOBIÁŠ rutland ježek, advokátní kancelář s.r.o.

E-mail: mdobias@rutlandjezek.com

Photo: www.sxc.hu

Unless the parties set out other reasons, tenants are entitled to give notice on a fixed term lease before the lease expires, inter alia if (i) they have lost the capacity to carry out the activity for which the business premises were intended, (ii) the leased premises have ceased, for objective reasons, to be eligible for carrying out the activity for which they were intended, and the landlord does not provide the tenant with equivalent alternative premises, (iii) the landlord has grossly breached his obligations in respect of the tenant, and (v) the circumstances on the basis of which the parties concluded the lease agreement have changed to such an extent that it would be unreasonable to require the tenant to continue the lease.

The landlord is entitled to give notice on a fixed term lease contract, inter alia if: (i) the real estate in which the business premises are located is to be demolished or rebuilt in a way that prevents the leased premises from being used any further, provided that the landlord did not and could not have predicted such situation when entering into the contract, or (ii) the tenant has grossly breached his obligations in respect of the landlord (e.g. the tenant is more than 1 month in delay with the payment of rent or services connected with the use of the business premises), (iii) the tenant is convicted of an intentional criminal act committed against the landlord, a member of his family, or person who lives in the building in which the business premises are located, or against another person’s property situated in such building, (iv) the business premises need to be vacated due to a reason of public interest protection, or (v) some other similarly serious reason exists.

The lease agreement passes over to the new owner in case of the sale of the premises. If the new owner had no reasonable cause to doubt that he was buying the premises free of any lease, he is entitled to terminate the lease within three months after he became or must have become aware that the premises are leased and who the tenant is.

Objections can be raised against a termnation notice. Objections must be made in writing and notified within one month of the relevant party having received the notice. If the notice is not withdrawn by the terminating party within one month from the delivery of the objections, the party who raised the objections may ask the court to examine the legitimacy of the notice within the period of another two months. If, however, the tenant vacates the business premises in accordance with the notice, then such notice shall be regarded valid and as having been accepted by him/her without objections.

In particular cases termination without the notice period is possible; by the landlord in cases of particularly serious breaches of the lease

The tenant is entitled to furnish, to the appropriate extent, the real estate in which the object of the lease is located with various types signage, provided the landlord has given his/her consent.

The landlord may only withhold his/her consent for serious reasons. If the tenant requests the landlord in writing to be given such consent and the landlord does not respond within 1 month, it shall be taken that consent has been given. On the other hand, a failure to obtain the consent constitutes a gross breach of the lease agreement by the tenant.

Doing Business in the C zech Republic III. How to Do Business in the C zech Republic

TIME FOR NEW INVESTMENT INCENTIVES As of 1 May 2015, an amendment to the Czech Investment Incentive Act (the “Act”) came into force. Its aim is to make investment incentives more attractive for investors even despite reduced maximum level of state aid (25% from the previous up to 40%), which in July 2014 was introduced by the European Commission‘s General Block Exemption Regulation (the “Regulation”) regulating the conditions and rules for state aid.

MOST IMPORTANT CHANGES INTRODUCED BY THE AMENDMENT All existing forms of investment incentives, such as income tax relief, cash grant for new job creation and employee training and support for strategic investment activities remain in place. In addition, new incentive in the form of an exemption from real property tax in concessional industrial zones which have been proposed by the Ministry of Industry and Trade has been introduced. Another benefit of the introduction of these concessional industrial zones is expected to be the opportunity to draw cash grant on their territory for creating new jobs in the amount of CZK 300 000 per new job created.

Within the manufacturing projects, three types of supported activities are newly defined, i.e.expansion of production by increasing production capacity, diversification of production and a fundamental change to the overall production process. Investment incentives can also be newly requested for projects involving construction or expansion of centres for shared services, data centres, and customer support centres.

Another positive change is a reduction in the limits for the minimum number of new jobs created in the case of technological centres and strategic service centres from 40 to 20 new jobs and in the case of software development and data centres there will be a reduction from 100 to 70 new jobs.

Another significant change for manufacturing projects is the new general condition stipulating that at least 20 new jobs must be created that are related to the investment project. Moreover, there is an obligation to maintain those jobs for a set period.

The general conditions have also been changed in the area of project funding. It is not necessary to provide funding for mandatory part of the investment activity from equity capital and only a description of the method of financing is sufficient.

CHANGES IN THE AREA OF STATE AID There are also several changes in the area of state aid. Stricter rules have been set in general for investment projects and these

rules relate to the accumulation of support in three-year period preceding the filling of the investment incentive application. Large investment projects over EUR 100 million need to be granted an individual exemption from the restriction to receive state aid by the European Commission.The process of approving such an investment project will be administratively and time demanding.

For strategic investment projects the level of cash grant has been increased to 10-12.5% for the acquisition of fixed assets (from the previous 5-7% of eligible costs).Remaining part of state aid can be claimed via tax relief or other cash grants if available.

How can I find out whether I can qualify for incentives for investments in production?

If you plan to invest at least CZK 100 million (in some regions only CZK 50 million) in establishment of production or in expansion of current production, and at least half of the investment will be spent on acquisition of new machinery equipment and at least 20 new jobs will be created, all of it within three years, you can obtain investment incentives in the form of a ten-year tax relief.

In selected Czech regions there is also an opportunity to receive cash grant of up to CZK 300 000 per created new job or support for training and re-qualification.

There is a basic condition that all investment projects are environmental friendly.

I don‘t manufacture, but I am involved in development or strategic services.

How can I receive an investment incentive?

In the case of technology centres, the basic condition for acquisition of an investment incentive is that at least 20 new jobs are created and at least CZK 10 million is invested, of which CZK 5 million must be spent on new machinery equipment.

When the conditions specified above have been fulfilled, it will again be possible to draw a tax relief and in selected regions also cash grant for new job creation and employee training and re-qualification.

How long is it necessary to keep the investment and new jobs?

Long-term assets for which an investment incentive has been drawn and the newly created job positions must remain for the whole period of the tax relief claiming and at least five years from the completion of the investment project or from the establishment of the first employment for each new job position.

Another new important provision of the amendment stipulates that the above stated condition will be fulfilled even in situations when it is necessary to replace supported asset due to its failure or obsolence, with asset of the same or a greater value if it serves the same purpose.

I don‘t meet the qualification conditions for investment incentives. Can I apply for a different type of support? And can I draw from multiple types of support?

Besides investment incentives, there is also a whole range of opportunities to receive direct cash grants for investments and for selected operating costs. It often occurs in practice that a company plans more investments during the same period and questions arise about the option of combining different types of state aids. In general, it is possible to use several types of subsidies and even different types of investment incentives. In such situation, it is necessary to divide individual investments among various support programmes, particularly in view of the need for fulfilment of the specific conditions of each grant programme or investment incentives, while simultaneously maximising the potential benefit. For all types of support, there is a basic rule that each cost may be supported only once. Therefore, individual combinations need to be considered optimally prior to filing of an application or an investment plan.

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RELATED CHANGES TO SELECT PROVISIONS OF THE INCOME TAX ACT Since investment incentives especially involve corporate income tax relief, several changes have also been made to the Income Tax Act. One of the most positive changes is the modification of the calculation of tax relief through the S2 comparable tax base (tax base benchmark) in the case of expansion projects. The S2 base will newly equal the arithmetic mean of the tax amount calculated for the three taxable periods immediately preceding the taxable period for which the tax credit may be claimed for the first time (previously S2 = the higher of the tax bases for the past two finished periods).

Important changes have been made to the special conditions and sanctions for their breach. As far as transactions with related parties are concerned, the sanctions imposed in the event of improper setting of transfer prices will be eased. This involves situations when the recipient of an investment incentive in the form of a tax relief increases the tax base through related-party business operations not in line with standard business relations. A failure to meet the arm’s length principle, in this case, will not entail the risk of losing the investment incentive in the form of income tax relief instead will lead to sanction standardly applied if the recipient breaches the condition for minimisation of the tax base.

The condition regarding the launch of insolvency proceedings, with which the expiration of entitlement to a tax relief was linked previously, will be limited only to situations when a decision of bankruptcy is issued. In situations when insolvency proceedings are commenced, which a court subsequently halts due to non-fulfilment of legal conditions,

there will no longer be a risk that the recipient of the investment incentive will lose entitlement to a tax relief.

In the event of an increase in the tax base through the transfer of assets (or part thereof) owned by related parties whose tax base will decrease or whose tax loss will increase as a result, the investment incentive recipient may not claim tax relief in the subsequent taxable periods commencing as of the tax period in which such circumstances arose.

Although the negative consequences of the assets transfers are limited only for future periods, it is necessary to devote increased attention to transfers of assets in a group of related parties.

Finally, mergers and transfers of assets to a shareholder will not lead to the duty to refund the utilised tax relief and pay sanctions instead, the taxpayer will merely lose “only” the entitlement to the tax relief in the future. When the tax relief has been utilised completely, a merger or a transfer of assets to a shareholder may be carried out without negative consequences for drawing of the tax relief.

The amendment has also clarified the start of the period when it is necessary to begin complying with the tax base minimisation requirement (i.e. claiming tax depreciations, adjustments to receivables and items deductible from the tax base pursuant to Section 34 of the Income Tax Act), expressly beginning with the taxable period in which the general conditions in accordance with the Investment Incentive Act were met.

Another change is that the payer may newly decide not to claim the tax relief in subsequent taxable periods commencing with the taxable period in which the taxpayer announced the decision to the tax authority. However, it will be necessary, among other things, to assess the fulfilment of selected conditions so that the already utilised tax relief is not put at risk.

Most of the above changes will only be effective for projects whose incentive application will be filed in May 2015 or later. However, selected changes particularly some of the amended provisions of the Income Tax Act will also relate to applications filed before the amendment came into effect. It is therefore necessary to assess the impacts of the changes on previous recipients of investment incentives as well.

KARIN OSINOVÁ KPMG Česká republika s.r.o.

E-mail: kosinova@kpmg.cz

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Photo: www.freeimages.com

As far as support for new job creation and employee training and requalification is concerned, which so far has been obtainable only in a limited number of regions where unemployment is higher than 50% of the national average, this number of eligible regions will be increased by reducing the limit to 25% of the national average. Therefore, the number of regions where this support is available is likely to rise significantly.

The specific levels and amounts of support that can be obtained will be set by related legislation, which, however, has not yet taken effect.

Doing Business in the C zech Republic III. How to Do Business in the C zech Republic

PUBLIC PROCUREMENT IN THE CR: PRINCIPAL CHANGES NOT TO BE OVERLOOKED The public procurement market in the Czech Republic is on the rise. After a three-year period of permanent decline, its value reached CZK 577 billion in 2014, thus returning almost to the 2009 and 2010 levels. It is highly probable that its total amount will exceed CZK 600 billion this year. The restored rising tendency is good news for the large numbers of foreign companies tendering for public contracts in the Czech Republic. What effect will the new legal regulation prepared for 2016 have on this dynamic market? It will be based on the European Directives, with contracting authorities as well as suppliers expecting it to streamline and simplify public procurement.

In respect of public procurement legislation, the year 2015 has two highlights. In March 2015, a technical Amendment to the existing Law on Public Procurement came into force and solved some of its most acute problems. However, the second and truly pivotal change indeed still awaits public procurement. An entirely new Law on the Award of Public Contracts is prepared for debate by the government.

It is expected to replace the existing Law on Public Procurement with effect from April 2016 and bring the Czech legislation into compliance with the new European Directives of 2014. The following article sums up the changes having the greatest impact on suppliers tendering for public contracts in the Czech Republic.

I. TECHNICAL AMENDMENT TO EXISTING PUBLIC PROCUREMENT ACT (2015) The existing law including the abovementioned technical Amendment will apply to all public procurement organised until the new law comes into effect, that is approximately by April 2016. The following are the main changes introduced by the Amendment.

A single received bid will not mean cancellation of the procurement procedure: Contracting authorities are no longer required to cancel the procurement procedure in the case of only one bid being submitted. Such a course is now voluntary. This will prevent unnecessary complications, especially in specific contracts where only a certain supplier is often capable of executing them.

Increase in extra work limit: Further, the Amendment increased the limit on the award of extra work to the same supplier to 30 % of the value of the original contract. But a further increase of this limit to 50% will be en-

sured probably by the new Law on Public Procurement and the Czech Republic will thus not remain among the countries with the strictest regulation of extra work in the European Union.

Assessment of supplier’s employees: A no less important change is the possibility of the contracting authority to assess the organisation, qualifications, and experience of the persons involved in the execution of the public contract, where they have a significant impact on its implementation. This is crucial in contracts the quality of which depends directly on the abilities of specific people (e.g. architects, designers, lawyers, or other consultants).

II. NEW LAW ON PUBLIC PROCUREMENT (2016) Main Motives for the Adoption of Revised Legislation: European Directives and Unsatisfactory Czech Law Both contracting authorities and suppliers have criticised the former European regulation of public contracts award as overly bureaucratic and complex. For example, the restraining rules did not allow contracting authorities to set the conditions of the procurement procedures sufficiently to suit their own needs and restricted their competence in negotiations with suppliers or in the determination of suitable assessment criteria. Similarly, it placed excessive demands on suppliers that could discourage them from participation in public contract tendering.

Naturally, the Czech regulation suffers from identical problems.

This is to be changed by the new Directives adopted by the European Union in February 2014. They represent the most significant overhaul of the public procurement legislation on the all-European level in the last decade. Member states, including the Czech Republic, are bound to transpose them to their legal systems by 18 April 2016 at the latest, or risk the discontinuance of European grants.

The new Law on Public Procurement is also to forestall the constant amending, which has contributed to the excessive complexity and confusion of the Czech regulation currently in place.

NEW RULES WILL REDUCE ADMINISTRATIVE BURDEN The elimination of bureaucratic obstacles is primarily to reduce the excessive administrative work and length of procurement proceedings as well as related costs. The new rules are to improve especially the position of small and medium-sized enterprises.

Self-declaration on the fulfilment of qualification: Currently, participants in procurement procedures must submit numerous documents to prove their clean criminal record, fulfilment of qualifications, as well as the non-existence of conditions for exclusion. It will newly be possible to replace these documents with a self-declaration contained in the European Single Procurement Document. This is a standard form available on-line that the contracting authority is obliged to accept. Only the supplier who is selected as the appointed contractor will be required actually to submit the documents.

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Complete list of documents proving qualification: In compliance with

the European Directives, the new law will introduce the complete list of documents with which suppliers can prove their qualifications (basic and professional competence, economic and technical qualifications).

Contracting authorities will not be allowed to request other documents.

Obligation of contracting authority to obtain information from public accessible sources: Contracting authorities will be bound to obtain for themselves documents which are available free of charge in the national databases.

NEW LAW WILL ALLOW GREATER FLEXIBILITY OF PROCUREMENT PROCESS Extended conditions for the use of negotiated procedure with publica-

tion and competitive dialogue: At present, the contracting authority can use negotiated procedure with publication only if an unsuccessful attempt has already been made to award the contract in another type of procedure. Competitive dialogue is reserved for particularly complicated contracts. However, the two aforementioned procedures often make it possible to achieve the best results. In negotiated procedure with publication, the contracting authority can negotiate with suppliers about their offers; in competitive dialogue, the authority can seek a suitable solution together with suppliers and only subsequently invite them to submit tenders. The contracting authorities will newly be able to use these more flexible procedures in various situations, such as when the public contract includes a design or innovative solution, or if the process cannot be started without preliminary negotiations because of excessive complexity of the contract.

Preliminary market consultation: Before starting procurement procedures, contracting authorities will be able to conduct consultations with experts and suppliers. Such a dialogue should be conducive to better prepared conditions of contracts, a faster procurement process, and better results. The consultations must not distort economic competition.

OPPORTUNITY FOR PARTICIPATION IN MORE COMPETITIONS FOR SMALL AND MEDIUM-SIZED ENTERPRISES: tracting authorities will newly be able to split the public contract into lots. The selection of suppliers for each lot of the public contract will then take place separately.

Turnover as criterion of economic qualification: The turnover criterion will not be allowed to exceed two times the value of the public contract. Only in the case of high risk contracts will the contracting authority be able to relinquish this criterion.

Direct payments to subcontractors: In the context of the contract performance, the contracting authority shall be able to provide payments due for parts of the public contract directly to subcontractors if requested.

CONTRACTING AUTHORITIES WILL HAVE BETTER POSSIBILITIES IN THE ASSESSMENT OF TENDER OFFERS New assessment criteria: Contracting authorities will be able to contin-

ue to assess the tenders exclusively by the lowest price offer, but other criteria will be available as alternatives. These will be, for instance, the tender with the best price-quality ratio, including life-cycle costs (e.g. maintenance or end-of-life costing) and quality.

Maximum allowable and abnormally low bid: Currently contracting authorities can set out only the maximum allowable price. The rejection of tenders with unrealistically low prices is then connected with delays and the risk of legal disputes. Newly, the contracting authority will be able to set a price that it considers to be abnormally low and subsequently reject a supplier who has made such a price offer without giving proper reasons for it.

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CONCLUSION The new Draft Public Procurement Act is only at the start of its journey through the legislative process, and thus some things may still see major changes. The basic point of discussion and criticism will probably be the considerable freedom given by the law to contracting authorities. Some people believe that this gives scope for corruption. According to the Ministry for Regional Development, the law is written for honest contracting authorities because violations of the law have not been prevented even by the existing “overregulated” rules. Nevertheless, most of the expected changes mentioned in this article are based on the European Directives that the member states are bound to implement.

LENKA KRUTÁKOVÁ Attorney-at-Law/WOLF THEISS E-mail: lenka.krutakova@wolftheiss.com

Photo: www.freeimages.com

Division of contracts into lots: In the procurement conditions, con-

Doing Business in the C zech Republic III. How to Do Business in the C zech Republic

INSOLVENCY LAW: PROTECTING YOUR CLAIMS IN 2015 Despite the booming of the Czech economy, many businesses are still facing very difficult times. Prudence is required when choosing business partners and a clear understanding of the basic principles of insolvency law in the Czech Republic can reduce the risk of holding unsatisfied claims. This short article aims to provide practical guidance for protecting your claims against debtors in the bankruptcy proceeding.

THE BASIC LEGAL STRUCTURE Insolvency in the Czech Republic is regulated by Act No. 182/2006 Coll., on Bankruptcy and Composition (the Insolvency Act) which became effective on 1 January 2008 and replaced the highly criticised Act on Bankruptcy and Composition. In accordance with the changed legal terrain, the creditors now have greater influence during insolvency proceedings and debtors have new options to settle their debt through restructuring. Surprisingly, the option to allow the debtor to create a restructuring plan and continue its business in order to satisfy outstanding creditor’s claims had not been available prior to the Insolvency Act. Importantly, accelerated bankruptcy proceedings are now possible due to the creation of an online Insolvency Register, where all documents and rulings concerning all bankruptcy proceedings must be published.

INSOLVENCY SOLUTIONS The Insolvency Act provides two basic avenues for failed businesses: (i) bankruptcy, where creditors may obtain a percentage of their claims from the proceeds of the realisation of the debtor’s assets, the “bankruptcy estate”, and (ii) restructuring that allows the subsequent satisfaction of creditors while the bankrupt’s business follows a restructuring plan and remains open. For individuals that are non-business entities, debt relief is possible; however, it is governed separately from business proceedings.

bankruptcy is designed to prevent the filing of spurious or bullying insolvency petitions. Specious petitions can have an enormous negative impact on a business’s reputation and its bottom line.

REGISTRATION OF CLAIMS After the commencement of insolvency proceedings and until they are terminated, the satisfaction of claims against the debtor is only possible within the framework and in the manner stipulated by the Insolvency Act. In order to be satisfied, although usually only proportionately, claims must be registered with the Insolvency Court by the creditor in the prescribed manner, in the required form and within the required time limit as discussed below. This duty is imposed by the Insolvency Act on most creditors.

THE MAIN CLAIM REGISTRATION REQUIREMENTS I. Form – There is a required form which is available at no charge at the Internet address http://insolvencni-zakon.justice.cz.

II. Content – A description of the claim, the original basis of the claim and its monetary value in Czech currency are required. Foreign currency claims must be converted according to the exchange rate valid on the day of the commencement of the insolvency proceedings. If the claim was due prior to the date of the insolvency proceedings’ commencement, then the due date should be used for exchange rate purposes. The value of non-monetary claims must also be evaluated in monetary terms.

III. Attachments – These differ according to the type of the registered claim. In principle, they are documents proving the existence and the amount of the claim. As always, keeping accurate records of the claims is recommended.

IV. Time limit – Claims can be filed from the commencement of the insolvency proceedings. The deadline for filing the claims is fixed by the Insolvency Court in its decision on bankruptcy. The time limit is usually 30 days and the period begins running on the day on which the decision on bankruptcy was published in the Insolvency Register.

Petitions are rejected if they miss the deadline and creditors loose any opportunity of having the claim satisfied during the proceedings.

INSOLVENCY PETITIONS Creditors as well as debtors themselves are authorised to file an insolvency petition. The essentials of both these petitions are regulated by the Insolvency Act, which, in addition to requiring the petitioners to supply the general essentials, also obliges them to prove and support the facts attesting the debtor’s bankruptcy.

The requirement to prove all the relevant facts concerning the debtor’s

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If bankruptcy is settled by restructuring, the claims are satisfied in part according to the approved restructuring plan, while the bankrupt’s business continues to run.

DENIAL OF CLAIMS

SECURED CLAIMS The essential factor in satisfying a creditor’s claim in insolvency proceedings is whether its claim has been secured (for example, by a mortgage). Secured claims have priority of satisfaction from the realisation of the secured property. The part of the creditor´s claim that is not satisfied directly from the realisation of the secured asset is considered an unsecured claim and is satisfied with other unsecured creditors. The secured creditor is obliged to make note in the claim registration form of its right to satisfaction from the collateral and to prove that fact to the Insolvency Court.

GENERAL RECOMMENDATIONS In general, anyone entering into a business contract should secure their potential claims by obtaining suitable collateral (e.g. a mortgage). It is important to bear in mind that certain legal acts may be declared invalid and payments obtained on this basis must be returned to the bankruptcy estate. Acts without adequate consideration could be found to be invalid. Preferential acts can also be reversed. A typical example is when a person close to a debtor is offered settlement of a debt before its due date. Other such acts include any that intentionally prejudice the creditor’s satisfaction. Finally, as discussed above, the online Insolvency Register is a important tool for any creditor to use as part of its ongoing monitoring of claims.

UNSECURED CLAIMS Unsecured creditors are satisfied in accordance with the specific form of insolvency proceedings used.

In bankruptcy proceedings, all the debtor’s assets forming the bankruptcy estate are sold in a manner approved by the Creditors’ Committee and the Insolvency Court. Only after the bankruptcy costs and the so-called priority claims have been satisfied, can the unsecured creditors be satisfied (mostly pro rata) from the proceeds of the realised assets.

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PETR JINDŘICH SYROVÁTKO WOLF THEISS E-mail: petr.syrovatko@wolftheiss.com

Photo: www.freeimages.com

THE INSOLVENCY REGISTER The online Insolvency Register is a critical source of information for creditors as required time limits for filing are published here. All information concerning the insolvency proceedings of each and every debtor, including the announcement of its commencement and the issue of the decision of the Insolvency Court and the Insolvency Administrator must be published in the Insolvency Register kept exclusively in electronic form at https://isir.justice.cz/isir/common/index.do.

Downloading information from the Insolvency Register is free and easy. Data concerning a particular debtor can be found by searching the company’s trade name or its identification number. The decisions of the Insolvency Court are not delivered to ‘ordinary’ creditors and they have practically no other possibility of learning about the commencement of the insolvency proceedings except through the online Register. Creditors are strongly recommended to consult the online Insolvency Register as part of their systematic accounting process.

Denial of the authenticity amount, and order of registered claims is an important right that prevents specious overvaluation of the debtor’s liabilities and the submission of false claims in order to obtain higher satisfaction. Registered claims may be denied not only by the Insolvency Administrator and the debtor, but also by the other creditors.

Creditors denying the claims of other creditors in insolvency proceedings are obliged to make a security deposit to the Insolvency Court to cover the costs of the claim denial dispute in the amount of CZK 10 000 (approx. EUR 370). The court may also require an additional deposit to secure the compensation of damages which the creditor of the denied claim might incur by an unjustified or bullying denial of his claim by another creditor.

FINANCE

BANKING SECTOR IS STABLE AND LIQUID The structure of the banking sector has not changed basically over the medium term. As of 31 March 2015, a total of 46 entities were present in the Czech market (in the form of a valid licence). The structure of the banking sector is formed by 4 large banks, 8 medium-sized banks, 6 small banks, 23 subsidiaries of foreign banks and 5 building savings banks. 38 entities, 15 of them banks and 23 subsidiaries, are controlled by foreign owners. Domestic owners control 8 banks, two of them with state participation. At the end of the 1st quarter of 2015, the total assets of the banking sector amounted to CZK 5 439.5 billion, a 5% increase year-on-year. Out of the total assets, 57% were accounted for by the four large banks (i.e. banks with over CZK 250 billion of assets).

THE BANKING SECTOR AND REAL ECONOMY Currently the banking sector operates amid growing economic activity, but still in conditions of extremely low interest rates and ever stricter regulation. The situation in the banking sector and the real economy is closely interrelated: just as the improving economic situation has helped to boost profitability in the sector, the banking sector supports economic recovery through the offer of credits. Thanks to the better condition of the Czech economy, the quality of the credit portfolio of Czech enterprises and households improved during 2014 and the first half of 2015. In the corporate sphere, the share of credit defaults decreased to below 6% (5.99%) at the end of June 2015, which was not only a full percentage point less than a year before, but at the same time the lowest level of the last 6 years. For example, in the crucial manufacturing industry, the volume of credit defaults dropped to CZK 30 billion, which is a 12.8% year-on-year decrease.

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The improved quality of credits enables banks to extend their offer of credits to enterprises at very favourable rates.

In the first half of 2015, banks granted enterprises a total of CZK 319.3 billion in new credits. By year-on-year comparison, this is a high increase of 36.3%. Credits drawn in the first six months of 2015 account for over a third of the overall level of credits (CZK 906.4 billion) which were granted by banks to the corporate sphere as of the end of June 2015.

In the household sector, the credit boom dates from the middle of 2013, when it followed up the restored confidence of consumers in the future economic situation, primarily the reduced fear of inflation and job loss. The highly competitive environment in the banking sector gradually pushed down the interest rates on newly granted or refinanced mortgages to below the 2% level. The low interest rates are also made possible by the good quality of the credit portfolio, when the share of credit defaults amounted only to 2.96% of total housing credits

Photo: www.sxc.hu

RESILIENCE AND PROFITABILITY In 2014, the Czech banking sector continued to show stability, liquidity and, by European comparison, above-average profitability. The domestic banking sector again performed very well in the latest stress tests.

The robust capital adequacy and high rates of liquidity and profitability of Czech banks are a stable base for absorbing shocks. The resilience of the domestic banking sector to possible adverse shocks not only again proved adequate, but it even increased slightly compared to previous tests. What is more, in contrast to European tests, the Czech National Bank worked with much tougher conditions in its stress scenario than the European Central Bank.

The Czech banking sector has been very well capitalised over the long term. Its capital adequacy further increased during 2014. At the end of the year, the capital adequacy indicator of the sector was 17.79%. In addition, most of the capital is accounted for by the quality Tier 1 capital (Tier 1 capital adequacy amounted to 17.32%). During 2014, the net profit increased by 3.0% and totalled CZK 63.5 billion. Return on assets was 1.21% and, regarding Tier 1 capital, it was 16.92%.

The unique position of the Czech banking sector continues, with deposits surpassing loans. In 2014, the total volume of credits granted by banks rose by 4.8% to CZK 2 635.1 billion year-on-year. The rate of increase in the volume of client deposits was slower than in credits. The total volume of deposits increased by 2.9% at the end of 2014 to the amount of CZK 3 435.3 billion. Overall, the volume of deposits exceeded the volume of credits by 30.4% at the end of 2014. The surplus of deposits over credits is generated by the household sector, where households have 56.3% higher deposits with domestic banks than the volume of money they draw in credits. In the corporate sector, the volume of deposits and credits is roughly balanced. This situation means a low dependence of the banks on the Central Bank and on financing in the inter-bank market, but simultaneously the monetary policy has lower efficiency in the support of economic activity.

Doing Business in the C zech Republic IV. Fin a n c e

on 30 June 2015, and in mortgages the share of 2.59% was even lower.

The high interest in new housing credits intensified during 2014 and in the first half of 2015. During 2014, banks and building savings banks granted Czech households new housing credits worth CZK 240 billion, a 17.6% increase compared with 2013. In the first half of 2015, new housing credits rose by almost onefifth and totalled CZK 139 billion. Entirely new credits account for about a half of this increase, the other half is the refixing or refinancing of existing contracts.

CHALLENGES OF STRICTER REGULATION The new regulation is reflected primarily in pressure on the administrative costs of banks, which increased by over 13% in 2014. Banks do not transfer the weight of the new regulation to clients: compared with 2013, the overall earnings from charges and provisions decreased by 1.8%; net earnings from charges and provisions dropped by 2.7%. On the other hand, banks were aided by the improving economic situation: losses from the depreciation of assets totalled CZK 13.5 billion, which was the lowest amount since 2008.

In September 2014, the Czech National Bank announced a countercyclical capital buffer. Given the current situation and predictions of future credit development, it set the rate at 0%, i.e. basically as non-active at the moment. The CNB does not expect to be compelled to apply a non-zero rate of countercyclical capital buffer in the next two years.

For the first time, the Czech National Bank has also announced the rates of capital buffer to cover systemic risks for the four largest banks. The banks are obliged to maintain this capital buffer continuously from 1 November 2014, on both an individual and subconsolidated basis.

In regulatory terms, the year 2015 will be even stricter for banks than 2014.

For example, banks have to prepare for the establishment of a Fund for Crisis Resolution. Although banks will cope with the new regulatory requirements, the stricter regulation can be expected to impact on the financial results and the profits of the banking sector may be lower than in 2014.

OVERVIEW OF BANKS AND FOREIGN BANK AFFILIATIONS OPERATING IN THE CZECH REPUBLIC (IN ALPHABETICAL ORDER) Banks and foreign bank affiliations

www – address

Air Bank a.s.

www.airbank.cz

Bank Gutmann Aktiengesellschaft, pobočka Česká republika

www.gutmann.at

Bank of China (Hungary) Close Ltd. Prague branch, odštěpný závod

www.bankofchina.com

Bank of Tokyo-Mitsubishi UFJ (Holland) N.V. Prague Branch, organizační složka www.bk.mufg.jp/global/ BNP Paribas Fortis SA/NV, pobočka Česká republika

www.bnpparibas.com

BNP Paribas Personal Finance SA, odštěpný závod

www.bnpparibas.com

Citibank Europe plc, organizační složka

www.citibank.cz

COMMERZBANK Aktiengesellschaft, pobočka Praha

www.commerzbank.cz

Česká exportní banka, a.s.

www.ceb.cz

Česká spořitelna, a.s.

www.csas.cz

Českomoravská stavební spořitelna, a.s.

www.cmss.cz

Českomoravská záruční a rozvojová banka, a.s.

www.cmzrb.cz

Československá obchodní banka, a. s.

www.csob.cz

Deutsche Bank Aktiengesellschaft Filiale Prag, organizační složka

www.deutsche-bank.cz

Equa bank a.s.

www.equabank.cz

ERB bank, a.s.

www.erbank.eu

Expobank CZ a.s.

www.expobank.cz

Fio banka, a.s.

www.fio.cz

GE Money Bank, a.s.

www.gemoney.cz

HSBC Bank plc – pobočka Praha

www.business.hsbc.cz/cs-cz/

Hypoteční banka, a.s.

www.hypotecnibanka.cz

ING Bank N.V.

www.ingbank.cz/

J & T BANKA, a.s.

www.jtbank.cz

Komerční banka, a.s.

www.kb.cz

mBank S.A., organizační složka

www.mbank.cz/

MEINL BANK Aktiengesellschaft, pobočka Praha

www.meinlbank.com/

Modrá pyramida stavební spořitelna, a.s.

www.modrapyramida.cz

Oberbank AG pobočka Česká republika

www.oberbank.cz

Poštová banka, a.s., pobočka Česká republika

www.pabk.sk

PPF banka a.s.

www.ppfbanka.cz

PRIVAT BANK AG der Raiffeisenlandesbank Oberösterreich, pobočka ČR

www.privatbank.at/

Raiffeisen stavební spořitelna a.s.

www.rsts.cz

Raiffeisenbank a.s.

www.rb.cz

Raiffeisenbank im Stiftland eG pobočka Cheb, odštěpný závod

www.rb-stiftland.cz

Sberbank CZ, a.s.

www.sberbankcz.cz

Saxo Bank A/S, organizační složka

cz.saxobank.com/

Stavební spořitelna České spořitelny, a.s.

www.burinka.cz

Sumitomo Mitsui Banking Corporation Europe Limited, Prague Branch

www.smbcgroup.com

The Royal Bank of Scotland plc, organizační složka

www.rbs.cz

UniCredit Bank Czech Republic and Slovakia, a.s.

www.unicreditbank.cz

Volksbank Löbau-Zittau eG, pobočka Všeobecná úverová banka a.s., pobočka Praha

www.vr-bank.cz/ www.vub.cz

Waldviertler Sparkasse Bank AG

www.wspk.cz

Western Union International Bank GmbH, organizační složka

www.westernunionbank.com

EVA ZAMRAZILOVÁ MARTINA VYSTAVĚL

Wüstenrot – stavební spořitelna a.s.

www.wuestenrot.cz

Czech Banking Association E-mail: zamrazilova@czech-ba.cz www.czech-ba.cz

Wüstenrot hypoteční banka a.s.

www.wuestenrot.cz

ZUNO BANK AG, organizační složka

www.zuno.cz Source: www.cnb.cz; list of banks as of 25 August 2015

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ENTREPRENEURSHIP OF FOREIGN ENTITIES AND ITS TAXATION IN THE CZECH REPUBLIC Entities that are not tax residents of the Czech Republic may become liable to income tax according to the Income Tax Act No. 586/1992 Coll., as amended, if they receive income derived from the territory of the Czech Republic. Although the basic level of taxation of this income is relatively low (corporate income tax 19%, natural persons 15%), it may become a fundamental complication for their business activities.

It is essential to realise the fact that, in some cases, income tax of tax non-residents is withheld in a form of withholding tax from gross revenues (at the rate of 5% or 15%), and not from profit.

1. TYPES OF INCOME TAXED BY WITHHOLDING TAX Among revenues of tax non-residents derived from the territory of the Czech Republic, on which 15% withholding tax is levied (unless reduced/eliminated by a double tax treaty or unless a permanent establishment is created), may be included e.g.:

Revenues from : services (except realisation of building site or construction or instal-

lation or assembly project) rendered on the territory of the CR, consulting, management, and brokerage and similar professional

activities provided on the territory of the Czech Republic, independent personal services rendered on the Czech territory, income of artists and athletes for their performance in the CR.

Payments from Czech tax residents (or from permanent establishments of non-residents) for: industrial and cultural royalties, including payments of any kind

received as a consideration for the use of any industrial, commercial or scientific equipment, except of financial leases, director’s fees, contractual penalties from business obligations, dividends, other income derived from a capital asset interest.

Revenues of tax non-residents obtained from the territory of the Czech Republic on which 5% withholding tax is imposed are rentals from financial lease.

We have to note that the Czech Republic has a broad system of capital gains (realised on sale of shares) tax exemption valid for Czech nontransparent companies with shares in Czech/EU non-transparent subsidiaries and for EU non-transparent companies with shares in Czech subsidiaries. The conditions are, in particular, that at least a 10% share is held for at least a 12-month period (even sale of shares in a thirdcountry subsidiary may qualify under certain additional conditions).

2. TYPES OF NON-RESIDENTS‘ INCOMES TAXED BY TAX IMPOSED ON PROFITS Besides income liable to withholding tax types of income derived by nonresidents from the territory of the Czech Republic, incomes exist which are subject to the standard 19/15% Czech corporate income tax applied

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on profit. For these types of income, a standard income tax return shall be submitted (once a year until 1.4. of the following year, or until 1. 7. of the following year if the tax return is prepared by a tax advisor/attorney at law on the basis of Power of Attorney) and the tax base consists of profit adjusted for attributable and deductible items. These revenues are typically represented by revenues from real estate or permanent establishment.

Permanent Establishment Permanent establishment in the Czech Republic arises as a result of a fixed place of business, of a building site or construction or installation or assembly project carried out by a tax non-resident which has existed for more than six months within any twelve-month period, from the performance of professional services and of other activities of an independent character in the Czech Republic, if such activities are carried out on the territory of the Czech Republic for more than six months within any twelve-month period. Also, a dependent agent with authority to negotiate/conclude contracts in the Czech Republic binding on the non-resident may trigger a permanent establishment of this non-resident. These basic definitions of permanent establishment can be altered by wording of the relevant treaty on avoidance of double taxation.

3. TAXATION OF PARTNERSHIP INCOME Czech general commercial partnerships (v.o.s.) and limited partnerships (k.s.) are regarded as tax transparent entities for the purpose of corporate income tax (the latter only with respect to the general partner(s)). The profits of a general commercial partnership are not subject to taxation at the v.o.s. level, but at the level of its partners. In a limited partnership, profits are divided into a part for

Photo: www.sxc.hu

Although the Czech Republic as a member of OECD has signed many international bilateral double tax treaties regarding the avoidance of double taxation – currently with 88 states – these agreements mostly modify the rate of the withholding taxes, but the principle of withholding tax by retention tax from the whole income instead of profit taxation is a basic complication. Under these conditions, it is appropriate to consider founding a subsidiary or branch used for doing business in the Czech Republic.

the general partners (subject to taxation at the level of partners) and a part for limited partners, which is subject to taxation at the limited partnership level. The latter part, minus corporate income tax, is divided between limited partners in the form of dividends; dividends are generally liable to a withholding tax of 15%. The income of v.o.s. partners or k.s. general partners or members of a civil association (without legal capacity) who are not Czech tax residents from participation in v.o.s. or k.s. or association and from loans granted to v.o.s. and k.s. is regarded as income derived through a Czech permanent establishment, taxable at the standard income tax rate (19% for legal entities).

Carrying tax losses forward As of 2004, tax losses suffered in a tax period can be carried forward in the next five tax periods. Carrying losses backward, however, is not possible.

There are restrictions on the deductibility of tax losses (shown in previous tax periods) which may result from a fundamental change in the composition of owners of the company concerned, or from its merger.

As a rule, beginning from tax periods commenced in 2011, the tax administrator is entitled to check tax returns and assess tax liability in retrospect within three years from the end of the deadline for filing the tax return for the controlled tax period. But this is the minimum term, which can be prolonged.

Considering the complexity of this problematic volume of judicature and statements of the Ministry of Finance of the Czech Republic, we recommend always using the professional assistance of a tax advisor in identifying the possibility of the formation of the tax duty from revenues derived from the territory of the Czech Republic.

JAKUB KOVÁŘ NEXIA AP, a.s.

Member of Czech Service International E-mail: kovar@nexiaprague.cz, www.czech-service-international.com

WHICH TAX CHANGES AWAIT BUSINESSMEN IN 2015?

Since tax regulations in the Czech Republic change quite often, we would like to inform you about some of those which came into force on 1 January 2015, and also what changes are expected to be made in 2016. The article is divided into four areas:

Changes in VAT regulations Changes in personal income taxation Cash payment limits Electronic revenue registration

rate, amounting to 10%. This rate will apply to medicines, books, and baby food. With the introduction of the second reduced VAT rate, the planned unification of VAT rates at the level of 17.5%, approved in 2012 and planned to come into force in 2016, is abrogated.

CHANGES IN VAT REGULATIONS

2. Amount of Turnover Requiring VAT Registration

1. Changes in VAT Rates The first change applicable from January 2015 is the introduction of the second reduced, or the third VAT

The turnover amount requiring compulsory VAT registration remains at the level of CZK one million for a period of 12 consecutive months and will not be reduced to CZK 750 000 for 12 consecutive months, as originally proposed.

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Another change is the broadening of the use of the Transferred Tax Liability system within the Czech Republic. This broadening will apply, for example, to grain and sugar beet supplies without any value limit and also to mobile phone and tablet supplies. This provision, however, will only apply to supplies stated in a single tax document surpassing the amount of CZK 100 000.

4. Control Reports The Amendment to the Value Added Tax Act (the VAT Act) provides for the mandatory submission, as from 1 January 2016, of Control Reports that will form part of the Tax Return. The purpose of this provision is to prevent tax evasion and to ensure better tax collection. The Control Reports must be completed electronically only; the Ministry of the Interior admits that this will add a further burden to the administrative work of businessmen and place higher demands on their technical equipment.

The Control Reports will concern especially the recipients of taxable payments having their place of payment in the Czech Republic: who have paid an advance on a future taxable supply, who are manufacturers entitled to deduction in the production of investment gold or in the transformation of gold into investment gold, who have acquired the goods from another EU member state, who have accepted services from a person not residing in the Czech Republic, where the place of supply was located in the CR.

5. Special Rules for Mini One-Stop Shops Special rules for mini one-stop shops already apply to non-settled persons liable to tax by a third country, who provide electronic services to persons not liable to tax. This provision is intended to simplify VAT collection. In agreement with these special rules, the person liable to tax by a third country (e.g. Russian service provider) is obliged to register in one of the member states (identification state), where he/she electronically files his/her quarterly Tax Returns for the supply concerned and submits his/her Return for the supply under these special rules, e.g. in Poland, the Czech Republic, Austria, and Hungary, with the corresponding Polish, Czech, Austrian, and

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Hungarian tax authorities, and pays all taxes in the identification state, which are subsequently distributed among the member states in which the service was provided.

As from 1 January 2015, in the case of telecommunication services, radio and television broadcasting services, and services provided electronically to a person not liable to tax, the place of supply shall be the recipient’s place of residence, irrespective of the provider’s address. Under the new legislation, the rules applying to the taxation of the above-mentioned services in the member state of settlement will be broadened to cover cases where the service is provided by a person liable to tax and resident in another member state. Until 31 December 2014, in the case of telecommunication services, radio and television broadcasting services and services provided electronically to a person not liable to tax by a tax-liable person settled in another member state, the basic general rule was applied and the service taxed in the state in which the service provider is settled.

Therefore, as from 1 January 2015, the mini one-stop shop system will also be applicable to tax-liable persons settled in another member state.

To summarise, it can be said that the mini one-stop shop system will be divided into the internal EU provider system and the external EU provider system.

Photo: www.sxc.hu

3. Broadening of Possibilities to Use the Transferred Tax Liability System

Doing Business in the C zech Republic IV. Fin a n c e

ELECTRONIC REVENUE REGISTRATION The broadly discussed electronic revenue registration is to be introduced in the course of the year 2016. The first wave of digitalisation is to cover especially restaurants, hotels, and persons providing catering and accommodation services in general. This will be followed by retailers, wholesalers and other sectors with a significant share of cash transactions. Together with the introduction of electronic revenue registration, a reduction of the VAT rate for restaurants to 15% is proposed.

CHANGES IN PERSONAL INCOME TAXATION Here we would like to mention two main changes concerning personal income taxation, which came into force in 2015 under the Tax Act Amendment.

The changes are the following: raising the parenthood tax rebate for the second child by CZK 2 400 per annum to CZK 15 804 per annum, and the tax rebate for the third and subsequent child by CZK 3 600 per annum to CZK 17 004 per annum, 60% flat rate expense allowances on the income of self-employed persons will be limited to the amount of CZK 1 200 000, and the 80% flat rate expense allowance for craftsmen’s income to the amount of CZK 1 600 000.

LIMITS FOR CASH PAYMENTS The limit for cash payments, which until 2015 was CZK 350 000, has been reduced to CZK 270 000. A new provision is that, in addition to limiting the amount

of cash for the payment of sums due, the Amendment also bans the recipient from accepting cash surpassing the said limit. The limit for cash payments does not apply to current account deposits and withdrawals.

INVESTMENT GOLD A new obligation has been imposed on payers entitled to tax rebate in the production of investment gold or in the transformation of gold into investment gold: to state, for filing purposes, the trade name of the firm, its tax registration number, file number of the document, extent and object of payment, day of issue, day of payment or receipt of payment, the total amount, the weight and purity of gold, the name, date of birth and place of residence of the natural person, and the obligation to keep the document on file for 10 years. The investment gold producer is required to issue a receipt to the customer who is a private person not liable to tax (not a businessman or VAT payer). This applies if that person supplies investment gold free of tax and is entitled to a tax rebate from the mediation service, at the purchase of gold which is not investment gold, or is entitled to tax deduction at purchase, acquisition from another member state or at the import of goods or services directly linked with the production of investment gold or the transformation of gold into investment gold.

TAX ADMINISTRATION As from 2015, it is sufficient for one member of the company statutory body to act for the trade corporation, even in cases where it ensues from the founding documents (Certificate of Incorporation) that the joint action of several persons (members of statutory bodies) is required. Under the new legislation, natural persons have the duty to notify the tax administrator should he/she have accepted a tax-free sum surpassing CZK 5 million before the expiry of the deadline for filing the Tax Return. In the case of such a person failing to do so, he/she shall be liable to a fine of up to 15% of such income. This could signify the taxation of a tax-free income. In certain cases, such a fine could be waived. This duty will apply to income which the taxpayer obtained after 1 January 2015.

PAVEL ZACHARIÁŠ NEXIA AP, a.s.

Member of Czech Service International E-mail: zacharias@nexiaprague.cz www.czech-service-international.com

Joint-stock company Glassworks Moravia, residing in Úsobrno is a traditional manufacturer and dealer of packing glass: • alcohol bottles and liqueur bottles • wine bottles • food glass • cosmetic vial • laboratory glass / pharmacy glass (reagent bottles, powder bottles, dropping bottles, burette bottles) SKLÁRNY MORAVIA, akciová společnost Úsobrno č. pop. 79, 679 39 Úsobrno, CZECH REPUBLIC Phone: + 420 516 427 711 • Fax: + 420 516 427 700 E-mail: info@sklomoravia.cz • www.sklomoravia.cz

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Czech Export Bank is Export Credit Agency of the Czech Republic providing a wide range of products and services to assist and support Czech export internationally.

Czech Export Bank provides credits and other financial products to Czech and foreign companies, financial institutions and governments to finance exports of goods and services from the Czech Republic.

Czech Export Bank offers excellent business conditions and assists Czech companies and their foreign partners to successfully fulfil their international business opportunities.

Czech Export Bank offers following products: Credits: I Direct export buyer credit (credit is granted to a foreign buyer); I Indirect export buyer credit (credit is granted to the foreign buyer’s bank); I Refinancing of buyer’s export credit.

Guarantees: I Bid Bonds; I Advance payment guarantees; I Performance Bonds; I Retention money guarantees; Retention Bonds.

Financing is provided on the basis of the international “Arrangement on Officially Supported Export Credits” (OECD).

Most of the products are insured by state-owned Export Guarantee and Insurance Corporation (EGAP).

Complete financial service for Czech exporters and their foreign partners For more information, please visit our website: www.ceb.cz Česká exportní banka, a.s.

Vodičkova 34, 111 21 Prague, Czech Republic, tel.: +420 222 843 111, e-mail: ceb@ceb.cz, fax: +420 224 226 162, www.ceb.cz

Doing Business in the C zech Republic IV. Fin a n c e

EMPLOYEES – TAXATION, SOCIAL SECURITY, AND HEALTH INSURANCE The extent of an individual’s taxation in the Czech Republic depends on the individual’s tax residency status. Czech tax residents are subject to tax on their worldwide income. Czech tax non-residents are subject to tax on Czech-source income only. Tax non-residents are taxed in the same way as residents on their Czech-source income, except for certain types of income.

Czech-source income is, for instance, income for work performed in the territory of the Czech Republic, rental income from real estates located in the Czech Republic, etc.

In addition, Czech tax non-residents may not qualify for certain tax-deductible items and tax reliefs.

The term “tax resident” includes any person residing in the Czech Republic for at least 183 days within a calendar year (continuously or over several periods) or having a residence (permanent home)1) in the Czech Republic.

If an individual is treated as a tax resident in the Czech Republic and, at the same time, in another country, the final tax residency status is to be determined in accordance with the applicable double tax treaty. Czech Republic concluded double tax treaties with nearly all European countries and majority of other developed countries.

If there is no double tax treaty in place between the Czech Republic and the other country, double taxation may arise.

Photo: www.freeimages.com

INCOME SUBJECT TO TAX Employment income includes salaries, wages, bonuses, other compensation of a similar nature and most benefits in kind2). Employment income also includes fees paid to directors and shareholders of private limited companies and to limited partners of limited partnerships for work performed for the company or partnership.

On the other hand, travel reimbursement within the Czech labour law statutory limits and various other qualified benefits, such as luncheon vouchers, cultural and social fund benefits, temporary accommodation of up to CZK 3 500 per month (approx. EUR 127) and private life insurance or supplementary pension insurance premiums annually of up to CZK 30 000 (approx. EUR 1 100) may be exempt from taxation if further conditions are met.

The tax base for employment income equals the sum of the gross income of

the employee and the employer’s portion of mandatory Czech social security and health insurance contributions3). For employees who are not subject to the Czech social security and/or health insurance system, the tax base for employment income equals the sum of gross income of the employee and the employer’s portion of deemed mandatory Czech social security and/or health insurance contributions. No expenses may be deducted from employment income.

TAX-DEDUCTIBLE ITEMS The tax base from employment as described above is to be consolidated with all other partial tax bases (i.e. partial tax base from self employment and business income, from rent, investment income, or from other income).

The overall tax base can be lowered by tax-deductible items such as gifts to charities and other organisations for qualified purposes, mortgage interests, and contributions towards the individual’s private life insurance or supplementary pension insurance.

TAX RATE The employee’s tax liability is computed from the tax base reduced by the above tax base deductions, using the 15% tax rate.

In case the gross income of the employee exceeds annual maximum assessment base for social security contributions, solidarity surcharge tax of 7% should be applied on employment income exceeding the limit4).

For non-residents from countries outside the European economic area with no treaty on exchange of tax-related information with the Czech Republic in place, income from dividends, capital gains, interest, royalties, and remuneration to members of statutory bodies is subject to 35% withholding tax rate.

TAX ALLOWANCES Tax payer may lower the annual tax liability through deduction of tax reliefs. The below tax reliefs, except for the personal tax relief, are available for tax residents and in general, also for tax non-residents if their Czechsource income accounts for at least 90% of their total annual income.

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The annual personal tax relief is CZK 24 840 (approx. EUR 902). In addition, tax relief of CZK 24 840 is granted for a spouse living in the same household with the taxpayer, unless the spouse’s annual income exceeds CZK 68 000 (approx. EUR 2 462).

Additional personal tax relief of CZK 2 520 (approx. EUR 92) is granted for partially disabled persons and of CZK 5 040 (approx. EUR 183) for fully disabled persons. Tax relief of CZK 4 020 (approx. EUR 146) is granted to tax payers who are full-time students up to the age of 26 and tax relief of CZK 13 404 (approx. EUR487) is granted for the first, CZK 15 804 (approx. EUR 574) for the second, and CZK 17 004 (approx.

EUR 617) for the third and each other dependent child. In addition, parents may apply for tax relief for children visiting the kindergarten of CZK 9 200 (approx. EUR 334) per annum. In case of the taxpayer’s tax liability having been fully covered by tax reliefs, the child tax relief can also be used as a child tax bonus. In this case, the tax bonus increases the employee’s net salary or is paid to the tax payer by the tax authorities.

Taxpayers can also claim proportionate amounts of tax reliefs, with the exception of the taxpayer allowance, if the applicable conditions are met for part of the year only.

TAX COLLECTION The employer is obliged to operate monthly payroll, to calculate monthly payroll tax withholding, and remit the payroll tax withholding to the tax authorities.

If the tax payer has only one employer at each time during the year and does not receive other income above CZK 6 000 (approx. EUR 218) (apart from income that is subject to the final withholding tax e.g. interests and dividends from the Czech companies), the tax payer is not obliged to file annual tax return.

Consequently, the tax payer may ask the employer to perform annual tax reconciliation to apply tax base deductions or tax reliefs that cannot be applied within the monthly payroll (simplified annual tax filing).

In other cases, the tax payer is obliged to file annual tax return.

Also, if the tax payer’s income exceeds the annual threshold for solidarity tax, he is obliged to file annual tax return.

The tax return for the respective tax period (calendar year for personal income tax) must be filed with the tax authorities by 1 April of the following year. The filing deadline may be extended until 1 July if the tax payer grants a power of attorney to a certified Czech tax adviser, or on the basis of a special application. Another extension of the tax return filing deadline until 1 November of the following year is available if the tax payer has income from abroad.

SOCIAL SECURITY AND HEALTHCARE INSURANCE PREMIUMS Employment income is subject to social security and healthcare insurance premiums.

The assessment base for premium computation is derived from the employment income, where the assessment base is the sum of the income subject to personal income tax.

The premium consists of a part to be paid by the employer and of a part to be paid by the employee. The payer of the premium is the employer, who withholds the premium from the employee’s monthly income. The employer pays both these parts to the social security and healthcare insurance authorities. The employer pays 25% of the assessment base as a social security premium and 9% of the assessment base as a healthcare insurance premium; 6.5% of their assessment base for social security and 4.5% for healthcare insurance are withheld from employees, members of statutory bodies and executives.

A maximum annual assessment base5) is set for social security premiums. There is no maximum premium set for healthcare insurance contributions.For employees changing employment in the course of the calendar year or working for several employers simultaneously, the

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maximum assessment base for social security premiums is calculated for each employer separately. If the amount of the employee’s social security premium exceeds the annual maximum, the employee may claim the return of the surplus after the end of the year. No premium overpayment arises to the employer.

Employees coming from another EU country, or a country with which the Czech Republic has a bilateral treaty in the area of social security and/or healthcare insurance, may apply for an exemption from premium payment in the Czech Republic. On the basis of such an exemption, employees are not required to contribute to the social security and/ or healthcare insurance systems in the Czech Republic, but remain covered by their home social security and healthcare insurance systems.

As a member state of the European Union, the Czech Republic is bound by the EU social security regulations (currently applicable to all member states of the European economic area and Switzerland) and other EU law.

In addition, to prevent double social security contributions and to assure benefit coverage, the Czech Republic has entered into social security agreements with several non-EU jurisdictions, including Australia, Canada, India, Japan, Korea (South), Russian Federation, or the United States.

MARTINA KNEIFLOVÁ ONDŘE J POLÍVKA Ernst & Young E-mail: Ondrej.Polivka@cz.ey.com

1) Residence (permanent home) is a place where the payer has a permanent residence, i.e. an apartment which is available to him/her at all times, whether owned by him/ her, or rented, and where the payer intends to be staying (depending on his/her personal and family situation). The apartment may be rented to another person, but only in a form enabling the payer its use according to his/her needs.

2) Or in connection with a previous, current or future performance of dependent activity, regardless of whether the activity is carried out for the payer of the income or not.

3) In general, 34% of income up to the amount of the social security premium from the maximum assessment base and 9% above this maximum assessment base.

4) In force as of 1 January 2013 going forward. Only gross income above CZK 1 277 328 (approx. EUR 46 364) in 2015 is subject to the solidarity surcharge tax of 7%.

5) For healthcare insurance premium, as of 1 January 2013, the annual ceiling is no longer applicable. For social security premiums, the annual ceiling amounts to 48-fold average wages; in 2015 it is CZK 1 277 328 (approx. EUR 46 364).

HUMAN RESOURCES AND EDUCATION

LABOUR CODE LAYS DOWN THE RIGHTS AND OBLIGATIONS OF EMPLOYERS AND EMPLOYEES The rights and obligations of employers and employees in the Czech Republic are defined mainly by Act No. 262/2006 Coll., the Labour Code.

EMPLOYEE’S SALARY A feature of the Czech legislation which is not common in countries of the European Union and outside the EU is that the employee’s salary does not need to be specified in the employment contract (although it mostly does contain this specification). The salary can be agreed upon in a separate contract, but it can also be set unilaterally in a salary assessment or in an internal wage regulation. The salary assessment entitles the employer to define the employee’s salary. In any case, the minimum wage must be respected (currently CZK 9 200 per month, i.e. approximately EUR 340 (as of 1 January 2016 CZK 9 900, i.e approximately EUR 366) but the employer must also respect the lowest guaranteed wage set for the different groups of work).

PROBATION PERIOD An employment contract with a new employee can include a probation period, during which the employment can be terminated without giving a reason and without a notice period. The length of the notice is limited to 3 months for ordinary employees and to 6 months for managerial employees. It is therefore possible to conclude a longer probation period with managers, which reflects the longer time needed to evaluate the competence of a manager.

WORKING CONDITIONS As in most European countries, the weekly working hours must not exceed 40 (with some exceptions). The employer can order an employee to

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work overtime, but no more than 8 hours per week and 150 hours in a calendar year. Any additional overtime work must be agreed upon with the employee. The total overtime work must not exceed an average of 8 hours per week, which means approximately 416 hours per year.

For each hour of overtime work, the employee is entitled to his/her regular wage plus 25% of the average wage. It can be agreed that 150 hours of overtime work in a calendar year are included in the contracted salary. For managerial employees, all allowed overtime work, i.e. up to 416 hours of overtime per year, may be included in the agreed wage.

Each employee is entitled to a minimum of 4 weeks of paid leave during a calendar year. The Czech Republic has 12 national holidays (from the year 2016, there will be added one more – Good Friday, i.e. 13 national holidays in total).

Some of these coincide with weekends (such national holidays are not shifted to workdays, as in some countries).

WAGE COMPENSATION IN THE CASE OF TEMPORARY WORK INCAPACITY When an employee falls ill and his/her temporary work incapacity is recognised in consequence, the law provides for the entitlement to wage compensation in the first 14 calendar days, paid by the employer. However, wage compensation

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Every employee is entitled to receive a written employment contract.

The employment contract can be written in any language, provided that both parties to the contract fully understand the language. The employment contract must include only three obligatory definitions: the type of work, the place of work, and the date on which the work commences.

In addition, the employee must be notified in writing of other details concerning the employment, particularly about working hours, paid leave, the notice period, etc., either directly in the employment contract or within one month of commencing the employment relationship.

Doing Business in the C zech Republic V. Human Resources and Educ ation

in these 14 days is due only for working days with the exception of the first 3 working days (or the first 24 hours of scheduled shifts) when the employee has no entitlement to wage compensation.

From the fourth day, wage compensation amounts to 60% of the average earnings of the employee, reduced in keeping with the law, with a maximum daily limit of CZK 1 465 for 2015.

After the 14 calendar days of temporary work incapacity, the employee receives sickness benefits from his/her sickness insurance for every calendar day, paid by the state.

TERMINATION OF EMPLOYMENT RELATIONSHIP The Czech provisions for the termination of employment relationship differ noticeably from provisions in many countries. Most importantly, employers may terminate the employment relationship only for reasons defined in the Labour Code, which are: organisational changes, health reasons, failure to meet prerequisites prescribed for the agreed work, and breach of duties by the employee. The

employer may not terminate an employment relationship arbitrarily (i.e. without stating one of the reasons defined by the Labour Code).

STATUTORY NOTICE PERIOD A shortcoming of the Czech legal arrangement is the absence of any relation between the length of the notice period and the length of the duration of the employment relationship, although this arrangement is common in many countries. The statutory notice period is at least 2 months and can be prolonged by agreement of the parties.

STATUTORY SEVERANCE PAY If the employment relationship is terminated for organisational reasons, the employee is entitled to statutory severance pay, based on the length of the employment: one average monthly wage if the employment has lasted less than one year, two average monthly wages if the employment has lasted more than one year but less than two years, and three average monthly wages if the employment has lasted more than two years. If the employment relationship is terminated for reasons of health or due to an industrial injury, an occupational disease or due to threat of such disease, the employee is entitled to severance pay of at least 12 times the amount of the average monthly earnings. A collective agreement, internal regulation, or mutual agreement (contract of employment or agreement on the termination of an employment relationship) can increase the severance pay, or lay down other conditions of the employee’s entitlement to higher severance pay.

NATAŠA RANDLOVÁ Randl Partners, lawyer’s office, member of Ius Laboris E-mail: randlova@randls.com

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CHANGES TO CZECH EMPLOYMENT LAW I. CHANGES EFFECTIVE AS OF JANUARY 2015 Contributions to Life Insurance 2015 On 1 January 2015, the amendment of the Income Tax Act came into effect. Its goal is to reduce evasion of taxes and insurance payments due to benevolent rule setting for tax deductibility of contributions to life insurance. Employers who provide this benefit to employees must modify their conditions.

Until the end of 2014, tax-deductible contributions even included life insurance that allowed employees to regularly withdraw their savings (or profit from savings).

Many employers were abusing it and a part of the wages was paid out to employees in the form of contributions to life insurance in order to save on taxes and insurance payments.

However, from 1 January 2015, the contribution to life insurance is taxdeductible only if it also meets the condition that the contract on the life insurance does not allow early withdrawal of savings (or profit from savings) without the simultaneous termination of the contract.

In cases where the insurance contract meets the conditions of tax deductibility but the employee, for example, gets into financial distress and terminates his life insurance prematurely, it will be necessary to retrospectively tax all contributions paid by the employer to the employee and pay social and health insurance from these contributions (employees must report this information to the employer).

Minimum Salary As of 1 January 2015, thanks to the amendment of the Governmental Regulation on minimum salary No. 204/2014 Coll., the minimum salary increased – the monthly rate has risen to CZK 9 200 and hourly rate to CZK 55.

Salary Compensation During Temporary Incapacity to Work At the beginning of the year, the reduction limits for sickness insurance benefits were changed by the announcement of MoLSA No. 214/2014 Coll. As a result, the average hourly earnings of an employee for the purpose of the calculation of salary compensation during temporary incapacity to work are reduced in 2015 as follows: up to CZK 155.40 – 90% included, CZK 155.41 to CZK 232.93 – 60% included, CZK 232.94 to CZK 456.85 – 30% included, CZK 456.86 and more – not included.

Insurance Payment One rate of social security contributions at 25% now applies to all employers.

The option to choose a higher rate and deduct salary compensation during incapacity to work has been cancelled.

Further important numbers for employers regarding insurance in 2015: employee’s maximum annual assessment base for social security is CZK 1 277 328, decisive income for participation in sickness insurance remains CZK 2 500/month, health insurance contribution from minimum salary (e.g. paid by the employer when an employee is on unpaid leave for a whole month) is CZK 1 242.

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Changes in Czech employment law are ongoing and usually have a significant impact on all Czech employers.

Doing Business in the C zech Republic V. Human Resources and Educ ation

II. CHANGES ADOPTED IN 2015 Amendment to the Labour Code The mostly technical amendment to the Labour Code, including, among others, the nullification of the so far ineffective law about employee accident insurance, has been adopted and is effective as of 1 October 2015.

Based on this amendment, theregulation of employer’s liability for damage in cases of work injuries and occupational diseases was moved from the transitional provisions of the Labour Code to its section concerning damages (Sec. 269 to 271u LC). Another new part of the amendment concerns the rules for termination of agreements on work performed outside an employment relationship. If the parties have not agreed on the method of termination, it is possible to terminate the agreement on work performance and the agreement on working (Sec. 77(4) LC) by: dismissal given for any reason or without a reason with a 15-day notice period, agreement of the parties on the agreed date, or immediate termination; immediate termination may only be agreed in cases where immediate termination of employment relationship is possible.

Termination documents have to be made in writing, otherwise they will be void.

Kurzarbeit Czech Style Amendment to the Act on Employment, which allows for the implementation of the so-called Kurzarbeit was also adopted in 2015.

Kurzarbeit is a new practice, which should help employers cope in difficult times, without having to dismiss any of their employees. It results from the already effective regulation of partial unemployment (and is further being implemented also in cases of interruption of work due to unfavorable weather conditions, or natural disasters).

The basic requirements for receiving state contributions are: The employer’s incapability to assign work to an employee in at least 20% of the determined weekly working hours due to partial unemployment or as a consequence of unfavorable weather conditions or natural disasters; Agreement between the employer and the Labour Office (after prior government approval) about granting a contribution, whereas the employer will have to provide the employee

with compensation in the amount of at least 70% of the average earnings from the moment of conclusion of the agreement; The employer’s commitment not to dismiss affected employees due to organisational reasons (§ 52 (a-c) of the Labor Code) while receiving contributions.

Within the application form to receive the contribution, the employer will have to submit: Agreement with trade union (or internal regulation) about the amount of salary compensation during partial unemployment; Description of the reasons for asking for the contribution and of the policies that have been already implemented in order to deal with the situation (measures concerning working hours, use of account of working hours, or use of annual leave); List of affected workplaces and employees; Description of anticipated overcoming of the partial unemployment/ natural disaster.

The amount of the state contribution shall rise up to 20% of the employee’s average earnings, however never more than 0.125x of the average salary in the national economy. Currently, this amount would thus be capped at CZK 3 147 per month.

This contribution can be granted for up to six months, renewable once.

The details about provision of the contributions is to be established by a governmental regulation which has not been released.

Act on the Protection of Public Health After long negotiations, an amendment to the Act on the Protection of Public Health, which introduces a number of new sanctions in the area of employment-related medical services and occupational health and safety, was finally approved and will be effective as of 1 December 2015, Fines for each violation go up to CZK 3 million.

III. CHANGES PLANNED FOR 2016 Amendment – Agency Employment The amendment to the Employment Act, the Labour Code and the Labour Inspection Act, which aim to bring major changes in agency work, has already been sent out by the Ministry of Labour to the Government.

Each applicant for a permit for employment mediation (temporary assignment) will be obliged to put up a deposit of CZK 500 000 upon the request of the General Directorate of the Labour Office. The deposit will be forfeited if the permit is revoked (for some grounds).

The responsible person that all employment agencies are obliged to employ will now have to be in an employment relationship with the agency for at least 20 hours a week.

An employee working for any one employer cannot, at the same time, be temporarily assigned to the same employer by an employment agency. Also, within the period of any one month, the employee can be temporarily assigned to the same user only by one employment agency.

Changes outside agency work A new administrative offence in the area of protection of employee privacy shall be added into the Labour Inspection Act. For a breach of Sec. 316 LC (surveillance of employees without a special ground, requesting prohibited information), a brand new fine of up to CZK 1 million may be imposed on an employer. As regards to the obligatory percentage of disabled persons, a new register of “substitute performance” shall be introduced.

Cancellation of the 2nd Pension Pillar The pension savings system – the so-called second pillar of the pension system – was only officially introduced in 2013. However, the current government is now taking steps towards its complete cancellation – the amendment, which is also the first step towards the cancellation of the second pillar of the pension system, came into effect on 1 July 2015. Since

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this day, it is thus not possible for new participants to enter the second pillar. Current participants of the second pillar will be able to continue their participation until the final cancellation of the programme. Until this time, the employers must continue adhering to current rules and will thus have to continue paying the appropriate, different, insurance rate.

Good Friday – A New Holiday?

The Chamber of Deputies approved an amendment to the Public Holidays Act, which should add Good Friday as a new public holiday to the Czech calendar.

Currently, the Czech calendar has 12 public holidays, however, on average, only 9 of those fall on working days. The new holiday will increase the number of days off each year by one, and this is to be true without

exceptions – as the name of the holiday itself implies, it will always fall on Friday.

Minimum Salary As of 1 January 2016, the minimum salary will again increase—the monthly salary will rise to CZK 9 900 and hourly rate to CZK 58.70.

NATAŠA RANDLOVÁ Randl Partners Member of Ius Laboris E-mail: randlova@randls.com

EMPLOYMENT OF FOREIGNERS: EMPLOYEE CARD For the purposes of employing foreign nationals, citizens of the EU, the EEA, and Switzerland (hereinafter EU citizens) are not considered as foreigners under Czech law. Therefore they have the same position as citizens of the Czech Republic and the Work / Residence Permit is not requested in the matter of their employment in the Czech Republic.

In the case of EU citizens, the employer is obliged to inform the relevant regional department of the Labour Office about such employment. The EU citizen is then required to report the place of his or her residence to the Foreign Police, unless the provider of his/her accommodation has already done so.

Therefore, this article only provides information concerning the employment of third-country citizens, and, for simplifying the terminology, refers to them as “foreigners”.

EMPLOYEE CARD 1. Employer’s Duties – Reporting Before hiring a foreigner, the employer is required to report to the relevant Labour Office department the vacant position and its characteristics, i.e. type of work, place of work, qualifications required for the vacancy, basic information about working and salary conditions, whether the job is for a determined or an indeterminate period of time and its expected duration. If the vacancy is not filled within 30 days of its being reported and the work is to be done under an Employment Contract or an Agreement on working activity, where the weekly working time will be at least 15 hours, and the monthly remuneration will be corresponding to at least the minimum salary (CZK 9 200 = approx.

EUR 340/USD 370)*, irrespective of the length of the weekly working time, the vacancy will be included in the list of vacancies to be filled by Employee Card holders.

In contrast to the former practice, the employer is no longer obliged to report to the regional department of the Labour Office to consult with them the intention of giving the job to a foreigner. In this respect, the current legislation is a simplification. *Note: It will be CZK 9 900 as of 1 January 2016

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2. The Foreigner’s Duties – Filing an Application Applications for Employee Cards are filed with the relevant Czech Embassy in the country of which the applicant is a national. In the case of the citizens of specified countries (under Decree No. 429/2010 Coll.), the application may be filed with any Czech Embassy. If the foreigner is already staying on the territory of the Czech Republic (only based on long-term visa or long-term residency permit, i.e. NOT short-term Schengen visa), he/she may file his/her application with the relevant department of the Ministry of the Interior of the Czech Republic. The application must be presented in person.

Besides the foreigner’s identification data, the application must contain the number and description of the vacancy listed in the central register of job vacancies available to Employee Card holders. Together with the application, the foreigner is required to present his/her passport, a document showing the address at which he/she is accommodated, two photographs (unless the foreigner’s photo record

Photo: www.freeimages.com

Foreigners may be employed in the Czech Republic only if they have obtained a Work Permit and a Residence Permit for employment purposes. The most usual way of obtaining them since June 2014 has been getting the Employee Card. The Employee Card has dual character, which means that it comprises both the Employment Permit and the Residence Permit. In this connection we would like to point out that the so-called Green Cards have been completely abolished, but the Blue Cards remain for highly qualified foreigners.

Doing Business in the C zech Republic V. Human Resources and Educ ation

has been made), his/her Work Contract or Agreement to perform work (or a letter of intent), documents showing the foreigner’s skills (e.g. educational documents, qualification documents, document showing that the conditions for performing a regulated profession have been met – upon request, the documents should be validated by Czech authorities). Upon request, the foreigner is required to present a document analogous with a copy of an entry in the criminal records and a medical report confirming the foreigner is not suffering from a serious disease.

The time period for deciding regarding the application is 60 days; 90 days in especially complicated cases, or in the case of the Department for Asylum and Migration Policy of the Ministry of Interior of the Czech Republic having requested the Labour Office of the Czech Republic for a binding decision.

The administration fee for filing the application is CZK 1000 (approx. EUR 37 / USD 40). Usually, the Employee Card is valid for the duration of the Employment Contract, but no longer than two years, with the possibility of its repeated prolongation. This means that the Employee Card is always linked to the specific working position (there may be several concurrent positions) for which it was issued, or a working position which was approved by the relevant authorities in connection with a change of the working position of the foreigner – Employee Card holder.

In the event of the foreigner’s application for the issue of the Employee Card being settled favourably, the Czech Embassy will confirm this in the foreigner’s passport. The foreigner is further required to submit a document confirming he/she has concluded travel health insurance that covers the time from the date of the foreigner’s arrival in the Czech Republic to the day he/she enters employment, which will entitle him/her to public health insurance.

3. Employee Card Extension The validity of the Employee Card may be extended several times on the same terms as those under which the Employee Card has been issued, for the length of time for which the Employment Contract or the Agreement on working activity has been concluded, but in each case, for no longer than another two years. Applications for the extension of the validity of the Employment Card are filed with the

Ministry of the Interior of the Czech Republic. Applications may be filed not sooner than 90 days before and not later than 14 days before the expiry of the existing Employee Card.

4. Special Cases – Non-Dual Mode of Employee Card In specific cases, the Employee Card is not of a dual character, but only comprises a Residence Permit to stay on the territory of the Czech Republic, not a Work Permit.

The first such case is the situation in which the foreigner has free access to the labour market in the Czech Republic (Section 98 of the Employment Act), i.e. such foreigner does not require the Work Permit.

This concerns, for example, foreigners having a Permanent Residence Permit in the Czech Republic, the family dependants of members of a diplomatic mission or consular office, foreigners granted asylum, foreigners studying for a secondary, tertiary, or university education in daily form and at an accredited education facility of the Czech Republic, accredited persons working with the news media, foreigners who received secondary or tertiary or university education at an accredited education facility in the Czech Republic and others. When filing an application for the issue of an Employee Card (of a non-dual character), the foreigner is required to prove that he/she has free access to the Czech labour market. On the other hand, he/she is not required to provide a document proving his/her expert capabilities or his/her education in the meaning of required qualification of specific job. Neither must his/her job be included in the register of vacancies available to Employee Card holders.

The other example, where the Employee Card is of a non-dual character and only comprises a Residence Permit, is the situation in which the law stipulates that the foreigner must have a separate Work Permit, for example if he/she has been seconded by his/her foreign employer based outside the EU/EEA or in Switzerland to perform work in the Czech Republic, or if he/she is a seasonal worker doing work dependent on changing seasonal conditions, which may not last for more than six months in the calendar year, and trainees (arriving to gain special skills and qualifications) for no longer than six months. In those cases, the foreigner must first obtain a Work Permit (or at least have filed an application for one to be issued) and after that apply for an Employee Card as a permit to stay.

However, even in the above-mentioned cases, the foreigner must always inform the Labour Office of the Czech Republic, the same as EU citizens.

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Doing Business in the C zech Republic V. Human Resources and Educ ation

BLUE CARD Also the “Blue Card” concept is a combination of the Work Permit and Residence Permit, however, only for highly qualified foreigners. The high qualification requirement is fulfilled if the university or higher technical education for the duration of at least three years is required for the working position concerned. Blue Card applications may be filed with a Czech representation office abroad, alternatively with the Ministry of the Interior, provided the foreigner is already staying in the Czech Republic on the basis of a permit issued by a Czech authority, or if he/she

More information concerning the employment of foreigners can be found on the following websites: www.mpsv.cz – Ministry of Labour and Social Affairs of the Czech Republic www.mzv.cz – Ministry of Foreign Affairs of the CR www.mvcr.cz – Ministry of the Interior of the CR

holds a Blue Card issued by another EU state and his/her application has been filed within one month of his/her entry to the territory of the CR. The application for the issue of a Blue Card must be supported by an Employment contract for work requiring high qualification, for the duration of at least one year, for statutory weekly working hours. The Employment contract must further stipulate the amount of the contracted gross monthly or annual salary, which must be at least 1.5 times the average gross salary in the Czech Republic.

The Blue Card is valid for the duration of the Employment Contract plus three months, but no longer than for two years. The Blue Card may be extended. The time limit for the decision on the issue of a Blue Card to be delivered to the applicant is 90 days within the filing of the application (in specific cases, the time limit may be prolonged or interrupted).

Blue Cards have several advantages for their holders, e.g. the possibility of free movement within the EU after the lapse of the 18 months’ legal stay, the possibility of including the period of stay on the basis of the Blue Card in the case of the person concerned applying for a Permanent Residence Permit in the Czech Republic, and more favourable conditions applying to their family dependants in seeking permission for their stay in the CR. ONDŘE J CHLADA Randl Partners, member of Ius Laboris E-mail: chlada@randls.com

EDUCATIONAL OPPORTUNITIES IN THE CZECH REPUBLIC ARE EXCEPTIONAL The Czech Republic, like all other socially advanced countries the world over, offers access to education not only to its own citizens, but also to foreign nationals. Migration for the purposes of study is also supported by the European Union through its programmes, such as the Erasmus+. As an EU member state, the Czech Republic provides citizens of other EU states access to education and school services under the same conditions as those enjoyed by children, pupils, and students of Czech nationality at all levels of education, from pre-school care to university studies.

Citizens of third countries, i.e. countries outside the European Union, also have access to pre-school, primary, secondary, higher vocational and university education under the same conditions as citizens of the CR and other EU states provided they are staying in the Czech Republic legitimately (in the case of compulsory school attendance this condition has not been stipulated). The fact that the interest of foreign nationals in education at all educational levels is growing is attested in particular by the increasing proportion of foreigners in the total number of children, pupils and students attending schools at all levels of the Czech educational system.

COMPULSORY EDUCATION School attendance in the Czech Republic is compulsory from the age of six years,

for the duration of nine years, which is the length of basic education. This, however, is soon to be changed: according to the proposed reform put forward by the Ministery of Education, Youth, and Sports compulsory education is to start one year earlier, which means that the last year of pre-school education (nursery school) will also be compulsory. As pre-school attendance has a favourable effect on later school performance, this measure is expected to help raise the quality of education in the Czech Republic and consequently education in this country in general.

Basic education in the Czech Republic is free, with the exception of schools set up by private entities, where school fees must be paid.

Children attend a regular 9-year basic school, which is divided into two stages: primary and lower secondary stages, with the primary stage encompassing Grades 1-5, and the lower secondary stage comprising Grades 6-9. After having completed Grades 1-5 of primary schooling, especially gifted children may attend 8-grade secondary grammar schools. The children of foreign nationals residing in the Czech Republic are entitled to basic education under the same conditions as Czech nationals. The children of foreigners attending school in fulfilment of their obligation under the Czech School Act are given

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free lessons in preparation for their inclusion in the elementary tuition process, which comprises tuition in the Czech language and possibly lessons in the child’s mother tongue focused on the culture of his/her mother country. Altogether 16 477 children whose parents are foreign nationals attended primary schools, 5 334 of whom come from one of the EU states, in the 2014/2015 school year. Three-quarters of the children of foreign nationals attending basic schools were children from Ukraine (4 039), Slovakia (3 775), Vietnam (3 220), and Russia (1 321).

WIDE OFFER OF SECONDARY EDUCATIONAL PROGRAMMES After completing compulsory school attendance, children in the Czech Republic have the choice of continuing their studies at one of a wide range of secondary school institutions. Attendance at state-run schools is free. Schools offer educational programmes, ranging from apprenticeship courses to vocational training courses and secondary general education courses. At some schools, prospective pupils are required to sit an entrance examination, or to meet other requirements laid down by the Headmaster. Meeting the admission criteria is a condition of admission.

The admission proceedings criteria, the fulfilment of which is a condition of admission, may differ at different schools and are fully within the competence of the Headmaster. The Ministry of Education, Youth, and Sports, however, is preparing to introduce compulsory admission examinations in the Czech language and mathematics in all secondary schools terminating tuition with a General Secondary Education Certificate.

Students from any of the EU states may study at this level of school under the same conditions as Czech citizens, just as citizens of third countries legally residing in the Czech Republic. In addition to schools listed in the school register, pupils may also attend any of the foreign schools based in the Czech Republic. Some 8 837 foreigners were enrolled in secondary schools in the 2014/2015 school year, 2 263 of whom came from EU states. Most foreign secondary school students came from Ukraine (2 126), Vietnam (1 994), Slovakia (1 691), and Russia (1 025) who, taken together, accounted for more than two-thirds of students of foreign nationality studying in Czech secondary schools. In the Czech Republic, students have the opportunity of obtaining education at various Art schools and Music and Dance conservatories. Those schools offer programmes focusing especially on music and dance. A part of the admission proceedings in those schools is a talent test. Altogether 217 foreign students attended those schools in the 2014/2015 school year, 97 of whom came from EU countries. Most foreign students came from Slovakia (72), Ukraine (32), and Russia (34).

TERTIARY EDUCATION The tertiary educational system in the Czech Republic comprises higher vocational schools and universities. Unlike the lower levels of education,

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THREE-DEGREE UNIVERSITY SYSTEM In the case of foreign students studying for a Bachelor’s, Master’s or Doctoral degree in courses taught in Czech and completing their studies within the standard time limit, no fees are payable for their studies, just as for Czech students.

University studies in the Czech Republic are attractive especially for students from Slovakia and for students from other Slavic countries, particularly Russia, and from other states of the former Soviet Union. Also strongly represented

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Overview of public, state-run, and private universities www.msmt.cz/vzdelavani/vysoke-skolstvi/prehled-vysokych-skol Overview of mobility programmes and scholarships offered www.dzs.cz/cz/programy-dzs/ Information for schools and students (long-term student visas) www.mvcr.cz/mvcren/article/information-for-schools-and-students.aspx

where the child usually comes to the Czech Republic with his or her parents, in the case of tertiary education, students usually come to the Czech Republic for study purposes. The decision of potential students as to whether they will study at home or whether they will go to another country, usually depends on the attractiveness and the content of the curricula and conditions the foreign country has created for students. An important consideration when choosing a country is not only the choice of study programmes, but also the language of tuition and, not least of all, the cost. In the Czech Republic, a wide range of study programmes at the tertiary educational level is provided by universities, some of which are taught in a foreign language.

Higher vocational schools, where less than one-tenth of tertiary-level students are enrolled, offer courses in Economics, Healthcare, Teaching, Law and Tourism.

These are three-year courses (plus threeto four-year courses in a form other than attendance study) and, unlike university studies, the courses are oriented much more practically and students are required to pay fees even in schools run by the state. However, the fees are not high at schools set up by regional authorities, usually between CZK 3 000 and CZK 5 000 (approx. EUR 110-185), depending on the subject; in private schools the fees are somewhat higher.

After graduation, students obtain the Certified Specialist (DiS) title. Certain higher vocational schools cooperate with universities and, on meeting certain criteria, graduates may continue their studies at a university for a Bachelor‘s degree. Altogether 552 foreign students attended higher vocational school courses, with nearly half of them coming from the EU (265), especially Slovakia (240). Students from Ukraine (108) and Russia (93) are again represented relatively strongly.

Doing Business in the C zech Republic V. Human Resources and Educ ation

are students from Vietnam. In the case of applicants choosing a programme in a language other than Czech, or if studying at private universities, fees must be paid. The same applies to Czech students.

The fee, however, must also be paid if the student attends a programme taught in the Czech language, but surpasses the set length of study by more than one year, or if he/she concurrently studies another programme of the same level.

Most universities in the Czech Republic have their study programmes accredited in accordance with the Bologna Accords.

These are three-degree study programmes: a Bachelor’s degree, followed by a Master’s degree and a Doctoral degree. Exceptions are Medical studies, Veterinary studies, and some of the Pedagogic and Art programmes, where students undertake long study programmes for a Master’s degree. Private universities usually only have their Bachelor’s degree studies accredited. However, in the past few years the number of private institutions offering follow-up Master′s degree programmes has increased.

A condition for admission to Bachelor′s or Master’s degree studies, besides filing an application, is meeting the admission proceedings criteria. One of the essential conditions (with the exception of certain Art programmes) is completion of secondary education with the presentation of a General Secondary Education Certificate, or a corresponding certificate from a foreign accredited institution.

A part of the admission procedure may be an entrance test or a test of general study prerequisites. The terms differ, depending on the faculty and study programme. Applicants for follow-up Master’s degree studies must have completed their Bachelor’s degree, or a corresponding degree from a foreign university, and must meet the admission criteria. By analogy, doctoral applicants must have completed their Master’s degree studies, or comparable studies abroad, and must meet the admission criteria.

Students from foreign schools are usually required to apply for recognition of their education. In the case of secondary and higher vocational education, nostrification is carried out by the Regional Authorities, and, in the case of university education, by universities with a similar accredited programme, or by the Ministry of Education, Youth, and Sports.

For students who do no speak Czech it is important whether schools offer tuition in a language other than Czech. The absolute majority of state-run universities and some private universities, too, also have their study programmes accredited in a foreign language. In 2014, 1 615 branches of studies/programmes for Bachelor’s, Master’s, and Doctor’s degrees had foreign language accreditation – English (1 522), German (76), Russian (7), French (7), Polish (1), and Italian (1). Altogether 41 179 foreign students studied at Czech universities in 2014, 21 944 of them in courses for the Bachelor′s degree) 15 851 in courses for the Master’s degree, and 3 603 in courses for the Doctor’s degree. Most foreign students come from Slovakia (22 680). Also strongly represented are Russians (5 237), Ukrainians (2 256) and students from Kazakhstan (1 427).

A numerous group are students from Vietnam (916) and Belarus (636).

In addition, Czech higher-learning institutions offer foreign students educational residencies and internships, either in the form of government scholarships or in the framework of European mobility programmes (e.g. the Erasmus+ programme), or on the basis of other programmes.

MICHAELA KLEŇHOVÁ Czech Statistical Office E-mail: michaela.klenhova@czso.cz; www.czso.cz

VÁCLAV JELEN Ministry of Education, Youth, and Sports E-mail: vaclav.jelen@msmt.cz; www.msmt.cz

HOW WELL ARE CZECHS EDUCATED? The rapid development of Information Technologies has been giving rise to new professions and the labour market is calling for ever more people with technical skills, while the importance and value of education is growing. On the international scale, the level of social advancement is assessed by the quality of human resources, specifically the educational level of the population. A society is considered the more educated the fewer people there are lacking education and the more people having the highest, i.e. tertiary-level education.

The educational level of a society is usually measured by the structure of the population according to the level of its education, or the results shown by international surveys focusing on skills and literacy levels.

The results of such surveys yield a much more comprehensive picture of the standard of knowledge and skills, because the educational systems of different countries vary relatively greatly and so do the quali-

fication requirements of different professions. Therefore it may happen that the knowledge gained at university in one country may be on the same level as that gained by secondary school graduates in another country.

The basic indicators assessing the educational level of a society are indicators based on the PIAAC international survey (OECD Programme for the International Assessment of Adult Competencies), which examines in particular the literacy and numeracy skills and the ability to solve problems with the use of ICT. Other indicators measuring the educational level of the population are, traditionally, the proportion of the population with only basic education, the proportion of the population with at least higher

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Doing Business in the C zech Republic V. Human Resources and Educ ation

secondary education and the proportion of the population with tertiary education.

Other possible criteria are, for example, what proportion of the population aged 18 years are students, or what proportion of the population aged between 15 and 24 years are continuing their studies.

According to international surveys, Czechs are not doing badly. In terms of adult literacy, we are among countries attaining the level of the OECD average, similarly to the populations of Estonia, Korea, Slovakia, the Flemish and the people of England and Northern Ireland. As regards the ability to solve problems with the use of ICT, the Czech Republic is also among countries comparable with the OECD average. In the area of numeracy skills, Czech people have achieved above-average results and are comparable in this respect with the people of Estonia, the Netherlands, Norway, and Slovakia. In addition, the PIAAC survey positively assesses the small differences between the results of the worst and the best evaluated adults.

In general, it can be said that, in comparison with the world, Czech society is relatively well educated. As regards the proportion of inhabitants with at least higher secondary education, the Czech Republic ranks among countries with one of the highest proportions of such people in the population. The high proportion of Czech people with at least secondary education is the result of the historical development of the Czech educational system, the practically absolute number of people with secondary education and the traditionally high representation of vocationally oriented secondary studies, with students leaving school with either a Certificate of Apprenticeship or a General Certificate of Education. In addition, during the post-revolutionary period after 1989, greater interest was shown in tertiary education and in secondary school studies ending with a General Certificate of Education at the expense of apprenticeship studies. After the demand in recent years was saturated, the situation has become stabilised. Most secondary school students attend vocationally-oriented programmes ended with a General Secondary Education Certificate. In the post-revolutionary period, after 1989, in addition, interest in tertiary education increased and the proportion of students at secondary schools with courses terminating tuition with the General Secondary Education Certificate grew at the expense of students attending courses ending

with the Apprenticeship Certificate. In recent years, when the demand became saturated, the situation has stabilised. Most secondary school students attend vocationally-oriented courses ending with a General Secondary Education Certificate and after completing their studies they have a relatively good chance of finding work in comparison with people with lower education and, in addition, have the possibility of continuing their studies at university or higher-level vocational institutions.

On the other hand, despite the rapid development of tertiary education over the past 25 years, the proportion of the Czech population with the highest, i.e. tertiary, education is lower in comparison with other European countries. The rapid growth in the number of students enrolled in the first year of university studies was only reflected after some delay in the proportion of the population with tertiary education. This was in view of the development of the demographic curve and the low proportion of the population with tertiary education in the older generation, caused mainly by the limited number of vacancies for university applicants in the pre-revolutionary period.

The raising of the educational standards of the Czech population, especially of young people, is partly due to the reform steps of the Ministry of Education, Youth, and Sports. In 2014, the government approved a new Education Strategy until the year 2020, which views education more comprehensively, linking up the different educational levels with an emphasis on the quality of education. In the process, partial measures will be introduced. As regards pre-school education, which creates the basic prerequisites for further successful education, the measure provides for compulsory education in the last pre-school year. To support technical education and to raise the technical knowledge of the population, introducing compulsory tests in the Czech language and mathematics is considered. The possible introduction of a compulsory test in mathematics as part of the final examination for the General Secondary Education Certificate is also under discussion. The date of its introduction, however, has not as yet been fixed. For students who have completed apprenticeship courses and have proved their skills in practice, the possibility is being considered to introduce examinations for obtaining a Master Craftsman’s Diploma, as proof of their higher professional qualification and a kind of alternative to the General Secondary Education Certificate.

EDUCATION OF THE YOUNG POPULATION Among EU countries, the Czech Republic is one with the highest proportion of the population with at least higher secondary education, in other

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words, a country with the lowest proportion of the population with only basic education or without any education. This applies to 93.2% of the population aged 25-64 years, according to EUROSTAT. We are also a country with one of the lowest proportion of people leaving the educational process prematurely1). Only 5.5% of the young population leave school due to failure. In the European Union as a whole, this proportion is double (11.1%). Lower values than those of the Czech Republic within the EU have only been achieved by Croatia, Slovenia, and Poland. Other countries with a percentage of students of less than 10% leaving school due to failure are Belgium, Denmark, France, Ireland, Cyprus, Lithuania, Latvia, Luxembourg, Germany, the Netherlands, Austria, Finland, Greece, Slovakia, and Sweden. However, there are countries in the European Union where more than one-fifth of the young population do not have, or are not preparing for, secondary education: Portugal, Malta and in particular Spain, where it concerns nearly one-quarter of this population.

The educational level of young people and their interest in education is shown by the proportion of 18-year-olds who are still attending school. In the Czech Republic, this proportion is very high – nearly 90%, while the EU average is 10 percentage points lower. The only other EU countries, where ninety and more per cent of the eighteenyear olds continue their studies are Estonia, Ireland, Lithuania, Latvia, the Netherlands, Poland, Slovenia, Finland, and Sweden. On the other hand, there are countries where only a relatively small proportion (less than 70%) of the 18-year-olds continue their studies, such as Greece, Cyprus, Malta, and the United Kingdom. In some of these countries, the low proportion of young people continuing their studies is due to the fact that many of them study abroad.

PEOPLE WITH UPPER SECONDARY EDUCATION In the Czech Republic, upper secondary education is provided by secondary schools, such as grammar schools, i.e. schools providing general secondary education, or secondary technical/vocational schools, where graduates obtain either a Certificate of Apprenticeship or a General Certificate of Education. In the Czech Republic, as in practically all EU countries, upper secondary education is the basic prerequisite for obtaining qualified employment, even in a time of economic crisis. This is one of the reasons why the educational level of the population of different countries is measured by the proportion of the population with at least upper secondary education.

In the Czech Republic, the proportion of the population aged 25-64 years with at least upper secondary education is traditionally very high. Between 1998 and 2014, this proportion increased from 85.6% to 93.2%, ranking the Czech Republic among EU countries with the highest proportion of young people with at least upper secondary education. This proportion is the higher, the younger the group of the population – in the Czech Republic, the proportion in the 55-64 age group is 87.6% in comparison with 94.6% of people with at least upper secondary education in the case of the 25-34 age group.

PEOPLE WITH THE HIGHEST EDUCATION LEVEL In the Czech Republic, this level of education involves 21.5% of the population aged 25-64 years. In the case of the younger generation aged 25-34 years, this proportion is considerably higher, amounting to 29.9%.

In the pre-revolution period, the number of enrolment vacancies was regulated by the state, with only about 18% of the particular population age group being admitted to university studies. At that time, 9% of men and 5% of women obtained tertiary education. After 1989, universities opened their doors more widely and the number of students enrolled for the first year of university studies rose rapidly. Currently, the number of students enrolled in tertiary education accounts for more than 90% of the particular population age group. In spite of the rapid and massive growth of students enrolled in the first year of university

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studies, however, the proportion of the population with tertiary education has been growing slowly, as the great development of tertiary education concerns nearly exclusively young people, and the increase in relation to the total population will appear only after a great delay. That is why the Czech Republic is still lagging behind the most advanced countries in terms of the proportion of people with tertiary education. In the past 15 years, however, this proportion in the 25-64 age group increased by 10.0 and in the 25-34 age group by as much as 18.2 percentage points.

Despite the continuing growth of this share, in comparison with other EU countries, however, the Czech Republic is still on a lower rung of the ladder within the European Union in terms of the proportion of young people with tertiary education, together with Croatia, Italy, Malta, Portugal, Romania, and Slovakia.

Bulgaria, Germany and Austria, too, are slightly below the average value.

Within the European Union, however, tertiary programmes of study differ in content, structure, and length. In addition, the data on the proportion of the population with tertiary-level education (according to labour force surveys or the census) may be influenced by different classification criteria and the inclusion of programmes which have not been completed. It is therefore useful also to examine the interest of the young population in education, which is shown by the proportion of students aged 15-24 in the number of the population of the corresponding population age group. In the Czech Republic, 63.5% of this category of young people is in the educational process, while the EU average is 61.9%. This places the Czech Republic among the 16 countries with the highest proportion of young people in the educational process, along with Belgium, Estonia, Denmark, Ireland, Lithuania, Latvia, Hungary, Germany, the Netherlands, Greece, Poland, Slovenia, Spain, Finland, and Sweden.

MICHAELA KLEŇHOVÁ Czech Statistical Office E-mail: michaela.klenhova@czso.cz; www.czso.cz

VÁCLAV JELEN Ministry of Education, Youth, and Sports E-mail: vaclav.jelen@msmt.cz; www.msmt.cz 1) That means the proportion of young people aged 18-24 who do not have upper secondary education and are not in the process of education.

TOURISM

THE CZECH REPUBLIC – AN IDEAL DESTINATION FOR YOUR GET-TOGETHERS

Apart from hotels, there are several large congress centres, including the imposing Prague Congress Centre, the Aldis Centre in Hradec Králové, the Parkhotel Congress Centre in Plzeň, and the GONG multifunction halls in the Lower District of Vítkovice in Ostrava.

It is therefore not surprising that, as the statistics of the International Congress and Convention Association (ICCA) reveal, in 2013 the Czech Republic played host to 145 meetings organised by international associations, ranking this country 26th in the world and 16th among

NEW TRENDS IN THE HOTEL MARKET Investments of more than EUR 220 million are expected to flow into hotel property in the Czech Republic in 2015. Growing interest in hotels is shown by both domestic and foreign investors. Among foreign buyers, the greatest interest is shown by investors from Asia, whether private and corporate buyers or institutions. The growing interest in investing in Czech hotels is mainly due to their improving performance. Both the occupancy rate and the average prices of hotel rooms are growing, which results in the hotels´ higher profit rates. The loss of the Russian clientele has been compensated by tourists from Germany and especially China and South Korea. In February 2015, the first two hotels in the Czech Republic changed hands – Courtyard by Mariott Prague Airport and Courtyard by Mariott Plzeň, and more transactions are expected. At the moment, the news appeared that the sale of another three hotels is expected in the Czech Republic. The greatest business deal in 2015 will probably be the sale of Hilton Hotel in Prague. Last year, a record 8.08 million foreign visitors came to the Czech Republic, three per cent more than in 2013. On the other hand, the number of domestic tourists accommodated in hotels and other accommodation facilities including camps decreased by two to three per cent. The year 2015 was a record one in terms of revenues from tourism, totalling nearly CZK 140 billion. Tourist expenses in the Czech Republic last year grew by 10 to 12%, reaching a record CZK 100 billion.

MEETING & INCENTIVE FORUM EUROPE AUTUMN 2016 More than 350 top professionals from all over the world engaged in MICE (meetings, incentives, conferences, and exhibitions) activities will meet at the M&I Forum Europe Autumn 2016 in Prague in 2016. During four days, more than 4 000 personal meetings of qualified purchasers and suppliers of conference services from Europe and the whole world will take place there. Leading European MICE experts will thus have an opportunity to become acquainted with Prague´s new and so far undiscovered highlights. Since 2009, when Prague last hosted the M&I Forum, the city has undergone great changes. The offer of accommodation facilities, especially four- and five-star hotels, has been broadened and the public transport network has been modernised and enlarged, so that visitors will have a greater choice of conference rooms, but also a greater opportunity to see the city itself, with its valuable historical sights. The prestigious international technological and scientific institutions seated in Prague attract specialists and academicians from all over the world. More information about the Prague M&I Forum Europe Autumn 2016 can be found at http://mi-forums.com/.

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European destinations. In city-to-city comparisons, the capital city of Prague is ranked 11th, with 121 important events having been held there last year.

The number of MICE events held there in 2013 increased by more than 10% in comparison with the previous year.

Large-scale event is scheduled in the Czech capital in 2017: Prague was chosen as the host destination for the 56th ICCA Congress. Prague’s candidacy was based on the realisation of the importance of congresses and conferences for the strategic development of the city and the whole of the Czech Republic.

The venue of the event is the Prague Congress Centre, the largest congress facility in the Czech Republic, suitable for hosting prestigious international events. More than 1 500 delegates will participate in the ICCA Congress.

WHY ORGANISE CONFERENCES OR CONGRESSES IN THE CZECH REPUBLIC? Safe Destination

An important consideration when selecting a conference venue is security.

The Czech Republic is one of the safest and most peaceful countries in the world. In addition, it has vast experience in the organisation of events. Two of the largest conferences organised in the Czech Republic – the NATO summit in 2002 and the annual meeting of the International Monetary Fund in 2000 – proved that the Czech Police can cope with both the organisation of such events and the demonstrations accompanying them.

Ideal Geographical Position and Easy Access

The Czech Republic is situated in the very heart of Europe. Thanks to its position, it is an ideal country for holding international meetings, supported by the enlargement of Prague Airport. The railway network in the Czech Republic is one of the densest in Europe, with modern international express trains providing a comfortable alternative when travelling longer distances within the bounds of the country. The motorway network, which is being continuously extended and is nearly 1 000 kilometres long, links Prague with other large cities and towns.

Photo: CzechTourism archives, Vladimír Kubík

With its more than 230 hotels equipped with facilities for holding large conferences and congresses, 20 of them five-star and 65 four-star ones, the Czech Republic has all the prerequisites for hosting important meetings and congresses. In addition, up to 2780 other hotels have all the amenities necessary for holding smaller conferences, seminars and other get-togethers.

High Quality at an Affordable Price

Events organised in the Czech Republic are cost-efficient and extremely professional. A large number of firms in the Czech Republic specialise in the organisation of conferences (PCOs – Professional Conference Organisers) and incentive events (DMCs – Destination Management Companies). Dozens of recognised firms offer the full range of services at high professional standards in the MICE (Meetings, Incentive, Conventions and Events) market.

Excellent Food and Beverages

Czech brewing tradition goes back to the 10th century and beers brewed in this country are among the global best.

Pilsner Urquell and Budweiser Budvar are known throughout the world for their outstanding taste. The vine-growing regions, especially in South Moravia, produce first-class wines, including Riesling and St. Laurence, as confirmed by the growing popularity of wine-tasting tours. The restaurants, inns, and wine cellars meet all the special wishes of visiting groups.

Congress and University Centre Zlín

Unique Regions

The Czech Republic is a small country, and the advantage of this fact is that all its regions are easily and quickly accessible.

Therefore, participants can visit other interesting places before or after an event.

MORE AT www.czechconvention.com/

Creativity and Innovation

Did you know that the word “robot” was invented by the Czech writer, Karel Čapek, and that the former Czechoslovakia was the third country to send a man into space (Vladimír Remek)? Or that the Bata shoe empire was founded by the Czech shoe manufacturer Tomáš Baťa? And it was not by chance that the world´s very first trade fair was held in Bohemia in 1754.

Polská 48, 790 81 Česká Ves, Czech Republic Phone: +420 584 488 111, Fax: +420 584 428 178 E-mail: retezarna@pvtnet.cz

Řetězárna a.s. is a firm with a tradition going back more than one-hundred years. Its core programme is the manufacture of welded chains and chain accessories. Its skilled workers, long-term experience, modern machinery, and equipment using the ISO 9001:2008, ISO 14001:2004, and OHSAS 18001:2007 quality management systems give its customers a guarantee that the products they will buy from us are of a high-quality standard. The quality is further guaranteed by the X 45 certificate, which only a few dozen companies the world over can pride themselves on.

The company´s current production range comprises: a) mining chains grade 6, 8, 9 and D, dimensions 10,14,18,19,22,24,26,30,34 and 38 mm b) tested chains grade 2 and 3 c) tested chains of higher strengths, quality grades 4,5,6,7,8 and 10, dimensions from 4 to 36 mm, for pulley blocks, fishing, suspensory d) lifting chains grade 2, 8 and 10 e) alloyed steel forgings up to 4 kg, carbon steel forgings up to 7 kg f) tyre chains (snow chains, protective chains, ground-gripping chains) We make these products in accordance with the ČSN, DIN, EN and other standards. Currently the firm exports more than 90% of its output to more than 39 countries the world over.

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The Château of Hluboká nad Vltavou

GOLF: THE CR IS A PROMISED LAND Why come to the Czech Republic to play golf? The Czech Republic is the most developed golf destination in Central and Eastern Europe. In this country, golf has a tradition of more than a century and boasts approximately 100 golf courses. These include not only championship courses, but also golf resorts, training academies, indoor simulators, and golf schools for both beginners and experienced players.

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in the country – that is Konopiště Golf Resort, just 40 km south of Prague. The largest golf resort in the Czech Republic offers everything you could ever possibly need to enjoy a day’s golf. You can choose between two 18-hole courses and there is also a large practice facility, a hire centre, and a shop.

A ROUND OF GOLF IN THE CZECH MOUNTAINS What is the best way of combining a great round of golf with panoramic views of the surrounding countryside?

A trip to the mountains of the Czech Republic of course – where golf courses boasting the highest levels of service await you. Whether you travel to the Krkonoše Mountains or Liberec, get ready for immaculate greens, stylish clubhouses, breath-taking views and lots of fresh air, the latter a guarantee of a pleasant afternoon’s exercise.

Photo: CzechTourism archives, Libor Sváček

GOLF IN PRAGUE? WHY NOT? Everyone knows that Prague is a city where people come to admire the architecture. But people are sometimes pleasantly surprised to find that one’s handicap can be improved at some of the luxury golf resorts in the city. The first 18-hole resort in Prague can be found in the tranquil surroundings of Zbraslav at the Prague City Golf Club. Between the Berounka and Vltava Rivers, you can enjoy every facility and comfort as well as a superb round of golf. Proof of the high standards set by this resort is the fact that it was partially designed by the top Czech golfer, Alex Čejka.

A pleasant location amid forested countryside, Karlštejn, the best known Czech castle as a dramatic backdrop, 27 holes, first-rate design, natural ravines, two lakes and a series of bunkers – all these are on offer at the Karlštejn Golf Resort, just 45 minutes by road from central Prague.

A round of golf straight from the plane? No problem. Not far from Prague Airport there is an 18-hole course of the highest standards. At the Albatross Golf Resort, chosen as “Golf Course of the Year” in 2011, you can spend a superb day in the company of your favourite sport and enjoy the top-notch service offered by the Club. Make use of the generously proportioned Practice Centre, the modern clubhouse with a full range of amenities, a restaurant and conference facilities. For the second year running, this venue hosted the prestigious Ladies European Tour event, a leg of Europe’s top professional competition.

A modern golf resort not far from one of the most beautiful chateaux

Doing Business in the C zech Republic V I. To u r is m

Perfectly designed courses, top-notch facilities, restaurants, golf shops and, in the background, mighty Mount Ještěd topped by its famous hotel – this is what you will discover at the Ypsilon Golf Resort in Liberec. The 18-hole par-72 course is of the English type and over 6 000 metres in length. Thanks to the rugged terrain and remoteness from civilisation, you can enjoy a truly undisturbed time practising your favourite sport.

What must it be like to tee off with an unrivalled view of the Czech mountain ranges? Come and see at the golf course in Mladé Buky in the heart of the Krkonoše Mountains, which offers one of the most incredible vistas in the country.

Here you will find a top-notch 18-hole course, as well as a 6-hole course with practice chipping and putting greens and a covered, illuminated driving range.

ENJOY AN IMPERIAL ROUND OF GOLF Fancy a truly unique experience, golf club in hand, in locations where European history was made? Then head for the well-tended greens of South Moravia, where some very special resorts boasting comprehensive facilities and amenities await you. Whether you are a professional player or just beginning to learn the game, you can enjoy a perfect round at any of the first-rate courses in this picturesque region. The Golf Resort Kaskáda Brno, Austerlitz Golf Resort Slavkov, and Golf Resort Telč – all these are venues that the keen golfer should not pass by on a tour of South Moravia.

All courses offer perfect conditions for “the gentleman’s game” and are easily accessible from the regional capital.

SPA GOLF REGION Within the West Bohemian Spa Triangle formed by the spa cities of Karlovy Vary, Mariánské Lázně, and Františkovy Lázně, there are 10 golf resorts, 6 of which have 18-hole courses. The bestknown are the Golf Resort Karlovy Vary, the Royal Golf Club Mariánské Lázně, and the Astoria Golf Resort Cihelny. The Golf Club Karlovy Vary was founded in 1904 and is the oldest golf club in the Czech Republic. By undergoing a mas-

WHERE TO PLAY GOLF? The complete selection of Czech and foreign golf resorts and indoor driving ranges can be found on the portal of the Czech Golf Federation – www.cgf.cz.

More information also at www.czechtourism.com.

sive reconstruction, the Karlovy Vary golf course was able to become one of the most prestigious European golf establishments. The championship 18-holes, par-70 golf course in Astoria Golf Resort Cihelny, built in 2001, was designed by the world-famous Gary Player Design Company. The area includes a complete training facility with 18-hole pitch & putt “Honey Course”, a putting green and a covered driving range.

SOUTH BOHEMIA’S GOLFING MASTERPIECES The harmonious landscape of South Bohemia is not just about shimmering lakes, rounded hills, flower-filled valleys and Renaissance châteaux, and palaces. On a trip to the southernmost reaches of the Czech Republic, you can take a break on some well-tended greens belonging among the region’s many golf courses. Quite simply, this region’s undulating landscape is ideal for golf. Bring a bit of variety into your trip by visiting two courses, one located at Mnich u Nové Bystřice, the other in Hluboká nad Vltavou. The Golf complex in Mnich is divided into two sections. The first is the Mnich 18-hole championship standard course, one of the most popular and the oldest in the country. Every year, you can watch prestigious national and international professional tournaments here. If you are a novice golfer, try the other part of the complex, the 9-hole course at Nová Bystřice. Both sections are attractively set in the wonderful landscape of Bohemian Canada, one of the most attractive areas of the Czech Republic thanks to its thick forests, numerous lakes, and huge granite boulders scattered across the countryside.

One 18-hole course, one 9-hole course, a large driving range and a long aristocratic tradition – this is what you will find at the golf course in Hluboká nad Vltavou. The magnificent landscape in which the courses are located has undergone gradual alteration over several centuries, owing to the nearby presence of the neo-Gothic Hluboká Château, one of the most beautiful châteaux in the Czech Republic. The entire area is an ideal spot for a few rounds, as well as for pleasant strolls and some time out in the shadow of the impressive residence of the Schwarzenberg Princes.

THE ROUNDS OF YOUR LIFE AT THE QUARTET OF GOLF COURSES IN NORTH MORAVIA! Wondering how to add even more interest to a break while touring Ostrava’s industrial heritage? Fancy discovering the hills of the Beskydy Mountain with a bit of sport thrown in for good measure? Then come and give one of North Moravia’s golf resorts a go! The first of the golf courses you can tee off at in perfect fashion can be found in the château park in Šilheřovice near Ostrava. The 18-hole course is dominated by the Rothschild Château and enjoys an unmatched ambience thanks to trees brought here from all over the world.

Imagine an 18-hole course offering some incredible panoramic views of the Silesian Beskydy, numerous bunkers, undulating fairways, interestingly shaped greens and several lakes. All this can be found on the championship standard links course at the Ropice Golf Resort.

A superb golfing experience awaits you, whether you are a professional or a less experienced golfer.

Do you like big open courses that really put the skills of the motivated golfer to the test? Then you will certainly not be disappointed by the Golf Club Ostravice. Comparable with the most up-to-date European golf courses, it enjoys a superb location between two of the highest peaks in the Beskydy range. The highlight of any round will be the panoramic views of Lysá hora from the 18th hole.

If you are one of those discerning golfers who demand only the highest quality, haul your golf cart to the Prosper Golf Club Čeladná, situated in the very heart of the Beskydy – an ideal venue for a relaxing break.

The largest resort in Central Europe boasts two championship standard 18-hole courses with a clubhouse, as well as excellent facilities, a stylish restaurant, and a modern Riding Centre.

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Doing Business in the C zech Republic V I. To u r is m

LUXURY AND TRADITION OF CZECH SPAS Why are the Czech spas some of the most popular in the world? Spa recreation and treatment has a long tradition in the Czech Republic, which boasts about 40 spa resorts, hundreds of curative springs and rich peloid deposits (mud, peat, and bogs), ranking the country among international leaders in this area.

Guests can look forward to superb high quality spa care, the comfort and services offered by spa facilities and also the beautiful surrounding countryside. You must have already heard of Karlovy Vary with its beautiful colonnades, Mariánské Lázně with its singing fountain and Luhačovice Spa with its characteristic Art Nouveau architecture, inspired by folk styles.

SPA TRIANGLE Nowhere else in the world can such a concentration of curative springs be found as in the West Bohemian Spa Triangle, formed by three famous spa towns: Karlovy Vary, Mariánské Lázně, and Františkovy Lázně.

The incarnation of spa elegance, imposing colonnades, exclusive spa buildings and a wonderful layout in the heart of a forested valley – this is Karlovy Vary.

Thanks to its unique architecture, this is one of Europe’s most beautiful spas.

Karlovy Vary’s greatest wealth is its 13 hot mineral springs, which are used to treat illnesses affecting the digestive system and metabolic disorders, along with problems linked to cancers and the locomotor system. The hottest of the springs – the Vřídlo – has an incredible temperature of 72º C! When you pass through the heart of Mariánské Lázně, you have the sense that you have been transported back one century in time by the wave of a magic wand.

Splendid spa buildings alternate with blossoming parks in which spa guests relax, sipping contentedly at jugs filled at some of the town’s famous springs. Get to know the history of a town which, at the height of its fame, hosted the most important of statesmen and artists, and remains one of Europe’s most beautiful spa towns. You certainly shouldn’t neglect taking a stroll along the elegant neo-classical cast-iron colonnade, which

INFORMATION ABOUT SPA RESORTS IN THE CR CAN BE FOUND IN THE SPA CATALOGUE OR AT http://spa.czechtourism.com, www.lecebnelazne.cz and www.jedemedolazni.cz.

dates back to 1899 and is among the most beautiful in Bohemia. In the spa season, concerts of Mariánské Lázně classics are held here, while, on special occasions, such as the Fryderyk Chopin International Music Festival held in August, the local symphony orchestra also performs.

In Františkovy Lázně, you can put yourself in the capable hands of no fewer than 20 cold mineral springs, top-quality natural mud, and gases with curative properties. All of these are used in the treatment of the musculoskeletal system, cardiovascular diseases and, in particular, gynaecological problems, including infertility.

DISCOVER JÁCHYMOV In a wooded valley at the foot of the Krušné Hory Mountains, you will find the spa town of Jáchymov, which was established as the first radon spa in the world. The history of the spa in Jáchymov began in the early 20th century. At that time, miners extracting uranium ore from the former silver mines came upon a powerful spring of radon water. Since that time, visitors from all over the world have come here to be pampered in the local spa – just as Johann Strauss, Baron Rothschild, and Maria Skłodowska-Curie once did. Jáchymov offers much more than just its world-famous spa. In the town itself, don’t overlook the interesting Renaissance Town Hall and the Church of St. Joachim. Also worth a visit is the Royal Mint and Museum where, among other things, you will learn how the local Jáchymov thaler, minted in the 16th century, gave its name to the best-known currency in the world today – the US dollar.

GET WRAPPED UP IN TŘEBOŇ!

Pleasant heated wraps in first-class peat, romantic walks through a Renaissance town, a wonderful landscape of thousands of fishponds and gastronomic delicacies that will have your taste buds in seventh heaven. That is the Třeboň Spa. The spa specialises in disorders of the locomotor system, rheumatic problems, post-trauma and post-surgery convalescence and boosting the overall condition of body and mind. The local speciality – natural healing peat, deposits of which are found near the town – serve both for treatment and pleasant relaxation. It would be difficult to imagine a more beautiful spot for the perfect rest. Třeboň is, after all, one of the most fairytale-like of South Bohemian towns. The town is a wonderful starting point for exploring the surrounding area.

Romantics should also not neglect to visit one of the most beautiful towns in Europe, Český Krumlov, which, thanks to its enchanting historical centre, is on the UNESCO World Heritage List. In addition, you will find elegant aristocratic residences, reminiscent of something out of a fairytale, at Hluboká and Jindřichův Hradec..

TO LUHAČOVICE SPA IN SEARCH OF ORIGINAL ARCHITECTURE When you feel like having a rest during your wanderings around harmonious South Moravia, set out for Luhačovice. The pleasant surroundings and original architecture of Luhačovice attract thousands of people every year, where the peace and quiet, some pleasant relaxation, and excursions into the beautiful surrounding areas may be enjoyed. Luhačovice’s natural wealth consists of the cold mineral springs with their high sodium, calcium, magnesium, and carbon dioxide content. With the aid of these, spa staff will help rid you of problems of the respiratory system, the digestive tract, metabolic and locomotor disorders, and even cardiac and vascular problems.

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PREHISTORIC WATER AT THE DARKOV SPA Iodine- and bromine-rich mineral water – this is the greatest asset of the Darkov Spa in Karviná. For 150 years, this unique mineral water has been helping patients from around the world to get back on their feet. If you suffer from poor health, make your way to this spa, well known for its tranquil ambience – a truly soothing experience for body and soul. Thanks to the excellent curative properties of the local springs, which contain water from the Tertiary Period, the spa at Darkov can improve your musculoskeletal complaints, neurological problems, skin issues, circulatory and cardiovascular disorders.

Its reputation is borne out by the fact that, following injury during the Thai tsunami, the famous Czech model, Petra Němcová, was treated here. At present, the top-quality care of Darkov Spa is popular among Czech and Arab clientele.

TREAT ALL YOUR SENSES AT BEER AND WINE SPAS The Czech Republic is a country where beer and wine are literally national treasures. However, beer and wine have broader uses than might appear to be the case at first glance. Visit the aromatic world of Beer and Wine Spas, which promise perfect pleasure, not only for your taste buds but for your body too. You can indulge in beer wellness both at spa centres and elsewhere.

In Karlovy Vary, you can experience for yourself the unique effects of beer at the First Beer Spa. Here you can bathe in handmade whirlpool tubs of Royal Oak, an eternal symbol of longevity and endurance. Beer

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Photo: CzechTourism archives, David Marvan

SPA NEWS The basic component of the curative water in Velké Losiny thermal spa is sulphur. In 2015, a host of water attractions was added to the spa cures for the guest’s entertainment.

The spa is the only one in the Czech Republic to use original sulphur thermal water for this purpose. – Since mid-June 2015, visitors to the Bohdaneč medicinal spa about one hour´s drive from Prague have an opportunity to try out the traditional Chinese medicine in its new Centre of Traditional Chinese Medicine. The Centre uses traditional East Asian methods, such as acupuncture, herb therapy and tuina massage. Official support and quality of the centre are guaranteed by the Central South University in Changsha.

Spas can also be found in other spa towns, such as Jeseník in Moravia. Rejuvenating spa therapies using a combination of the healing effects of hot mineral water, beer, the ingredients used to brew it, and special massages, are a unique way of making your stay at Chodová Planá Beer Spa even more memorable.

These procedures have a curative effect on the complexion and hair, relax the muscles and joints and boost immunity.

This unique therapy employing the Czech national beverage can also be enjoyed at the Novosad Harrachov Beer Spa in the heart of the highest Czech mountains, the Krkonoše. Your other half can also experience the entire procedure in a special double bath.

You can also appreciate the beneficial effects of beer at BBB Bahenec Beer Spa in the wonderful landscape of the Beskydy mountain range, or in the unique underground environment of Sladovna Beer Spa in Černá Hora, with its wide selection of beer procedures.

You don’t need to be a sommelier to appreciate the wonderful taste and qualities of Moravian wine. Allow yourself to be pampered at the First Czech Wine Wellness in Hustopeče, which offers over 20 curative and relaxation procedures. A total body massage with grape seed oil will transport you to seventh heaven, your skin will glow thanks to a unique exfoliating paste made from crushed seeds, and vine wraps will help you combat excess weight and cellulite. You will literally receive the Royal treatment at the Château Wine Baths at Zábřeh Château: unwind in a grape seed oil bath in a wooden tub reminiscent of a wine barrel and enjoy a gentle massage or scrub, all against the romantic backdrop of flickering flames by the fireplace in the unique environment of a Renaissance château.

Today, spa resorts no longer limit themselves to mere conventional spa sojourns, but also comprise popular wellness programmes (managerial, anti-stress, weight loss, detoxification, wellness and beauty), in addition to medical wellness (the harmonious combination of natural curative sources, qualified medical care and other complementary activities, such as golf and Nordic Walking).

REGIONS

PRAGUE REGION Prague is one of the most attractive and successful regions within (Central) Europe. It represents a relatively dynamically developing and successful region, repeatedly ranked by Eurostat among the ten wealthiest regions in the European Union (measured by gross domestic product per inhabitant). In terms of the number of inhabitants, it is the 15th largest city in the EU, and, regarding area, Prague ranks among medium-sized cities in the EU, with an area of 496 sq. km.

Prague is an important cultural and art hub, its centre with an area of 1 106 hectares is included in the UNESCO Cultural Heritage list, which makes the city one of the most sought-after tourist destinations in the EU.

ECONOMIC POTENTIAL The number of economic entities which came into being on the territory of the capital Prague between 2009 and 2014 is more than 150 000. They are entities with a varied organisational structure, both as regards their specialisation and legal form. In addition, in 2014, 50.5% of all the new trading companies in the Czech Republic had their registered places of business in Prague. Their prevailing legal form was limited liability company (95.5% of the new trading companies had this legal form in 2014).

Prague is traditionally the most popular destination of all visitors to the Czech Republic. Tourism is thus an important economic driving force of the capital city. About 6 million people visited Prague during the year 2014.

Passenger and air freight transport is operated in Prague mainly at the Václav Havel Airport. In 2014, more than 11 million passengers were checked in here. The Václav Havel International Airport Prague is one of the largest airports in the whole of Central and Eastern Europe. In 2014, the Prague airport handled regular flights of 54 air companies to 119 destinations. Most passengers travelled to the UK, Germany, Russia, Italy and France, mainly using the airports in Paris (Charles de Gaulle), Moscow (Sheremetyevo), Frankfurt, Amsterdam, and London (Heathrow). The destination showing the greatest increase in the number of passengers was Stansted airport in London.

INVESTMENT According to a study by the ABSL association, there are more than 200 shared service centres in the Czech Republic which employ over 50 000 people. The centres are located mainly in Prague, Brno, Ostrava and about ten other cities of the Czech Republic. Investment in Prague, especially in shared services, has been the trend of the last few years.

This belongs to what is called the strategic services category. Besides the shared service centres, they include multilingual customer centres, high-tech repairs centres, software development and expert solution centres. For example, SKYPE and Microsoft companies have opened a software development centre in Prague. The Accenture and ExxonMobil firms have shared service centres in the capital. The ICON Communication Centre has built customer centres here. The category of ICT expert solution centres includes projects of the IBM and DHL companies (the purpose of the establishment of the IT operations centre in Prague is the management and support of the entire DHL European IT infrastructure from a single site with top equipment).

An interesting investment realised in 2015 is the opening in Prague of a corporate office of Amazon Company, where 500 people will find work in managerial and supporting positions. They are positions requiring high specialisation, especially in the area of IT and HR. The new office will house five sections, for example the shared HR services section and a multi-language contact centre for Amazon employees from all over Europe, and a central Amazon Connections Section for

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EU countries for everyday contacts with the employees, which will evaluate worker feedback and propose activities that will help improve the workplaces and working conditions. The Prague office will also employ specialists supporting the functioning of Amazon’s distribution centres in the Czech Republic and Poland.

The plan provides for the completion of 183 700 sq. metres of office space in Prague in 2015, the most since the crisis year 2008. In the first quarter of 2015, construction was started of Classic 7 Phase III (6 300 sq. m) in Prague 7, Radlice Park (6 400 sq. m) in Prague 5, and City Deco (13 200 sq. m) in Prague 4.

The highest number of offices under construction is in Prague 4 (101 400 sq. m), Prague 8 (37 700 sq. m), and Prague 5 (33 400 sq. m). At the end of the 1st quarter of 2015, one-third of the offices under construction already had their renters, according to DTZ. A full 206 300 sq. m of office space is under construction and other stalled projects with a capacity of 34 000 sq. m are waiting to be rented. In the first quarter, most of the new space was rented in Prague 4 (61%), Prague 5 (19%), and Statistical Data Population

31 June 2015

1 262 612

Gross wage

1.–2. Q. 2015

CZK 33 397 (approx. EUR 1 213)

31 August 2015

4.58 %

Unemployment

Source: Czech Statistical Office; EUR 1 = CZK 27.533

Prague – Vyšehrad

Photo: CzechTourism archives, Irena Brožová

Prague – High Synagogue

Prague 7 (8%). New demand in the 1st quarter was boosted especially by the renting by Microsoft of office space in the BB Centrum Delta administration building (11 600 sq. m).

There are several organisations in Prague concerned with giving support to business, in addition to three scientific and technical parks, including eight more scientific and technical parks located in the close vicinity of Prague.

INOVACENTRUM ČVUT Innovacentrum is a part of the Czech Technical University (ČVUT) in Prague, the aim of which is to support technology transfer, promote cooperation between ČVUT and industry and mediate the transfer of new technologies into practice. Inovacentrum ČVUT, with its Business Innovation Center (BIC) statute, is a member of the European Business Network (EBN). More at www.inovacentrum.cvut.cz.

VZLÚ PRAGUE SCIENTIFIC AND TECHNICAL PARK

practice; its services could be found useful by companies concerned with transport vehicles, power engineering, and construction. More at www.vzlu.cz/cz/spolecnost/vedeckotechnicky-park-vzlu-praha/ vedeckotechnicky-park-vzlu-praha

INNOVATION BIOMEDICAL CENTRE ÚEM AV CR It is a business incubator for innovation firms concerned with biomedical sciences and a centre for the support of the competitiveness of start-off firms concerned with biomedicine. More at bioinova.avcr. cz/o-nas/ibc.html.

A new technological accelerator to be named Prague Startup Center opened in Prague, with the support of CzechInvest Agency and Czech ICT Alliance. The main programme of the Prague Startup Center, which is being prepared in cooperation with the European Space Agency (ESA), will focus on space technologies, drones etc. More space activities are taking place in the Czech Republic. One of the institutions already in place is the headquarters for the Galileo navigation system.

Beginning technological firms will have the use of various equipment and facilities, from offices to legal, administrative, and technical assistance. The centre will help the firms expand to other markets.

EDUCATION

The VZLÚ Scientific and Technical Park in Prague focuses on the development of the aviation, space, defence, and safety industries and the transfer of research and development results into Office rentals in Pratur (1st quarter 2015) City centre

18.50–19.50 EUR/sq. m/month

decline

Inner city

15–17 EUR/sq. m/month

decline

City outskirts

13–14.50 EUR/sq. m/month

decline

Source: DTZ, Praguie Research Forum

USEFUL CONTACTS: Prague City Council – www.magistrat.praha.eu Portal of the Capital City of Prague – www.praha.eu Tourist portal of the Capital City of Prague – www.praguewelcome.cz Economic Chamber of the Capital City of Prague – www.hkp.cz

Prague is an important centre of science, research, and education, where one-third of the country´s public universities and one-half of private institutions of higher learning are concentrated. On 1 January 2014, 141 914 students were enrolled in Prague’s public universities, including 20 780 foreigners (17.2%), according to the Ministry of Education, Youth, and Sports. There are five large prestigious public universities on the territory of Prague – Charles University, the Czech Technical University, Institute of Chemical Technology, University of Economics, Czech University of Life Sciences – and two dozen private universities. The Academy of Sciences and its institutes also have their seats and main activities in Prague, which makes the city a centre of education with an importance reaching beyond the borders of the Czech Republic. Prague is a very attractive location for foreign students, scientists and research and development specialists, which naturally contributes to the greater internationalisation of the universities.

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CENTRAL BOHEMIA REGION

The Region is divided into 12 districts with 10 district towns. The largest in area is the District of Příbram (15% of the regional area), and the smallest is Prague-West (5% of the regional surface area). There is a large number of historically valuable monuments and sights and several protected landscape areas within the territory of the Central Bohemia Region. The greatest concentration of historical monuments can be found at Kutná Hora (St. Barbara Cathedral, the Italian Court, Hrádek housing the Museum of Mining, the Ossuary, entered in the UNESCO List of World Cultural Heritage). Kolín is another town, besides Kutná Hora, figuring in the Czech list of historical urban reservations in Central Bohemia. The most famous castles in the Region are Karlštejn and Točník (Beroun District), Křivoklát (Rakovník District), Český Šternberk (Benešov District), and Kokořín (Mělník District).

ECONOMIC POTENTIAL Developed agricultural and industrial production is characteristic of the Region. Agricultural production benefits from the excellent natural conditions of the Region’s north-eastern part. The Region is especially successful in plant production, including the growing of wheat, barley, sugar beet, and, in suburban areas, the cultivation of fruit, vegetables, and flowers. Machine building, chemical and food processing are pivotal industries. Besides traditional fields, new and demanding fields and services are being successfully developed.

The most important industries in the Region are engineering, the chemical industry, and food processing. The Škoda Auto factory has become an enterprise of nation-wide significance. Other industries in the Region are glass and ceramics production and printing. The previously traditional sectors of coal mining, steel production, and the leather industry are on the decline.

The intensity of economic activities is heavily influenced by the Region’s location and easy access to main transport corridors. In the Central Bohemia Region this is especially true of places in the vicinity of the capital with connections to main roads, especially the highways.

Another mode of transport is by water: some three-quarters of the Labe-Vltava waterway passes through the Region’s territory and is used for both domestic and international transport.

INVESTMENT The Region offers a wide range of investment opportunities. Industrial parks make it possible for investors to realise their new projects in either vacant or partly occupied parks.

There are 16 industrial parks in the Central Bohemia Region. A quarter of these occupy large areas of over 100 hectares, whereas the remaining consist of smaller surface areas. The parks in this Region are more densely occupied than in the rest of the country, as a result of the economic influence of Prague, the great density of transport networks and a well-developed technical infrastructure, plus the population density. In 2014, the Region attracted investments worth 7 642 79 mil. Czech crowns with 17 investment projects, mediated by the CzechInvest Agency, which helped create 2 349 jobs. A strong position in the Central Bohemia Region is held by the automotive sector, owing to the presence of two major car manu-

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facturers, Škoda Auto and TPCA. Investors in Central Bohemia have launched large projects. An important investor in the Region is LEGO Production s.r.o., which employs 2 000 workers in its plant in the outskirts of Kladno. There, the company manufactures mainly decorations and assembles LEGO elements. Its other programmes include large-volume packing and the research and development of decoration and packaging technologies. Its distribution centre is located in Jirny. LEGO production, s.r.o. has been in the Czech Republic since 2000. Its factory is based in the Kladno-South industrial park. In April 2015, it opened its third manufacturing building there.

In September 2015, the warehouse of the American Amazon online shopping centre started full operation in Dobrovíz near Prague. Total costs of the project, including the cost of land, exceeded EUR 75 million. By the year 2018, 2 000 people will find regular work in the distribution centre and another 3 000 will be employed seasonally. The hall in Dobrovíz is the largest detached industrial building to be built in the Czech Republic after 1989. Its special feature is that it is fully air-conditioned and very well thermally insulated. It covers an area of 95 000 sq. metres.

Other investment projects have been located in Rakovník (Eberspächer), Mochov (JOCKEY Praha CZ), Hořátev (Fresenius Hemocare CZ), and Slaný (Electric Powersteering Components Europe). Important industrial parks in the Central Bohemia Region are situated in Kolín and Mladá Boleslav. The industrial Statistical Data Population Gross wage Unemployment

31 June 2015

1 320 352

1.–2. Q. 2015

CZK 26 035 (approx. EUR 946)

31 August 2015

5.46%

Source: Czech Statistical Office; EUR 1 = CZK 27.533

Photo: CzechTourism archives, Ladislav Renner

With its geographical position in the central part of the Czech Republic, the Central Bohemia Region forms a ring around the territory of the capital city of Prague, which is its only internal border. A specific feature of the Region within the regional system is the fact that, within its centre, it encloses the capital, which is a separate region. The Central Bohemia Region does not contain its regional city and the Region’s administrative centre does not lie within the territory of the Region. Together with the capital of Prague, the Region forms a natural agglomeration linked together economically, historically, and culturally.

zone at Mladá Boleslav covers a surface area of 75 000 square metres. Another large company having its manufacturing plant located in the Mladá Boleslav Industrial Park, besides the Škoda Auto car factory, is the international company, Faurecia, one of the world´s largest suppliers for the automotive industry.

The company Eaton, which concerns itself with the hazardous energy control, use and administration, in 2015 enlarged its European innovation centre – the new building is a part of the scientific and technical park in Roztoky near Prague, a world research centre doing innovation work for Europe, the Middle East, and Africa. In the innovation centre, on a surface area of 6 500 sq. m, where top research is carried out focusing on the development of new generation energy systems that will make possible a more efficient, safer, and sustainable management and use of electric, hydraulic, and mechanical energy. The Czech workplace is one of Eaton´s five main innovation centres. Its Czech branch started operations in 1993, still under the name of Felton & Guileaume. Today it employs approximately 1 500 people in Prague, Suchdol nad Lužnicí, Pohořelice, and Chomutov. It serves local as well as global clients, including VW Group, Volvo, E.ON, HP, IBM, and Czech Railways.

Many investment parks benefit from favourable locations near international highways and main roads. These parks include, for example, the Průhonice and ČestliceNupaky Industrial Parks (both near D1, which connects Prague and Brno), Rudná-Nučice (near D5, which runs from Prague through Plzeň to Germany) and Hostivice-Jeneč and Tuchlovice. Many parks were established in the vicinity of larger towns, such as Kladno, Slaný, Kutná Hora, Příbram, Nymburk, Rakovník.

An important part of the efforts to raise the competitiveness of the Central Bohemia Region is research, development, innovation, and technological development. The creation of conditions for the development of the innovative potential and a knowledge-oriented economy is one of the top priorities of the Central Bohemia Region. The following are some of these: Centre for Applied Research Dobříš – www.cavd.cz Technology and Innovation Centre – VÚK Panenské Břežany Business Incubator Nymburk – www.inkubator-nymburk.eu/ Science and Technology Park in Řež – www.ujv.cz/cz/park.html/

Kutná Hora – Sedlec

USEFUL CONTACTS: Central Bohemia Regional Office – www.kr-stredocesky.cz Central Bohemia Region – European Office – www.stredocech-eu.cz/ Central Bohemian Regional Chamber of Commerce – www.khkstrednicechy.cz Scientific and Technology Park Mstěnice – www.eurosignal.eu Technology Park and Incubator, Ltd, Březno Scientific and Technical Park Milovice – www.vtpmilovice.eu

Technopark Kralupy of the Chemical Technology University in Prague opened in June 2015. Its laboratories will employ research teams composed of scientific workers and talented students of the University and will offer enterprises qualified services in the area of development and innovation, materials testing and analyses. The Technopark came into being as a reconstruction of a former steam mill in the centre of the city of Kralupy nad Vltavou. The park was completed in two years. Its facilities include a corrosion climatic chamber, an extrusion press for experimental plastic tubes coextrusion, and weighting presses for concrete materials testing. There are also furnaces for testing the heat resistance of building materials, laboratories for microbiological contaminants (moulds) identification, special analytical instruments for optical and thermal analyses and many other devices. More at www.technopark-kralupy.cz A Scientific and Research Centre – a sustainable energy (SUSEN) project – is to be realised at Husinec-Řež. The project, worth nearly CZK 2.5 billion, is being realised within the framework of the Research and Development for Innovation Operational Programme.

A second large scientific project being prepared is the realisation of the Biotechnological and Biomedical Centre of the Academy of Sciences and Charles University at Vestec (BIOCEV). The third important project to be located in the Central Bohemia Region (at Dolní Břežany) is the ELI (Extreme Light Infrastructure) superlaser project to be put into operation in 2016. The facility will form one part of an international project, in which also Hungary and Romania will participate.

EDUCATION The Region is home to the Faculty of Biomedical Engineering of the Czech Technical University (CTU) in Kladno.

There are private universities – the ŠKODA AUTO, a.s., University in Mladá Boleslav, and Academia Rerum Civilium – College of Political and Social Sciences, s.r.o. – in Kolín. The Academy of Productivity and Innovations also offers managers the opportunity of extending their professional education (API).

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PLZEŇ REGION The Plzeň Region is the Czech Republic’s third largest region in terms of area. Since its origin Plzeň (Pilsen), a city founded by order of King Wenceslas II of Bohemia at the confluence of the Radbuza, Mže, Úhlava, and Úslava Rivers in 1295, has been the natural centre of the Region. The industrial and technological development of Plzeň started in the middle of the 19th century, and step by step it became one of the most important cities in the country. At present, Plzeň is the fourth largest Czech city. It has 167 000 inhabitants, more than 30% of the population of the Plzeň Region.

Besides Plzeň, the function of district centres is performed by the towns of Klatovy, Domažlice, Tachov, and Rokycany. Given the low population density, also smaller towns, such as Sušice, Stříbro, Plasy, Kralovice, Horšovský Týn, Přeštice, and Nepomuk play an important role.

ECONOMIC POTENTIAL The most important economic sector of the Plzeň Region is the manufacturing industry. Traditional industrial branches include engineering focused on the power industry and transport systems. Other prominent sectors are the production of components for automobiles, mechanical and electrical engineering, electronics, plastics, and food industries (mainly beer brewing and wine and spirits production). The Region also supports investment in strategic services (high-tech services, research and development). Important food manufacturing enterprises in the Plzeň Region include: Plzeňský prazdroj a.s. (Pilsner Urquell), founded in 1843, the largest Czech beer exporter, which exports its products to nearly 50 countries the world over and is part of the SABMiller plc. international group, the world’s second largest brewing company; Stock Plzeň a.s., traditional spirits manufacturer, currently the largest manufacturer of spirits in the Czech Republic; Bohemia Sekt Českomoravská vinařská a.s. in Starý Plzenec, an important wine producer.

The important industrial sectors of the Region include mechanical engineering, which is mainly associated with the name of Škoda. Its main product range is equipment for classical and nuclear power plants and petrochemical industries, metallurgical works and forged products, heavy machine tools, equipment for rolling mills, equipment

for sugar cane processing, hydraulic and vulcanising presses, gear boxes, rail transport vehicles, trolleybuses, complete electric drives, turbines for combined gas and steam cycles and extraction steam turbines. Škoda Plzeň also conducts its own research and business activities. Other important industrial enterprises with a major effect on the Region’s economy are: DIOSS Nýřany a.s., specialising in metal sheet and pipe products, Okula Nýrsko a.s., focused mainly on plastic materials processing, and LASSELSBERGER, s.r.o., which represents the ceramic industry, and is formed by the companies of Chlumčanské keramické závody, Keramika Horní Bříza, Rako Rakovník, Cemix Čebín, and Calofrig Borovany.

Regional development also benefits from cooperation with neighbouring Statistical Data Population Gross wage Unemployment

31 June 2015

575 569

1.–2. Q. 2015

CZK 24 776 (approx.EUR 900)

31 August 2015

4.57%

Plzeň

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Photo: CzechTourism archives, Václav Jirásek

Source: Czech Statistical Office; EUR 1 = CZK 27.533

Doing Business in the C zech Republic VII. Regions

Bavaria within the Euroregions. Taking advantage of the support for European Cross-border Cooperation Programmes in the Plzeň Region are the Districts of Domažlice and Klatovy in the Bohemian Forest Euroregion, and the District of Tachov in the Egrensis Euroregion.

Doing well in the Region is congress tourism. In the first half of 2015, 720 800 people attended conferences and congresses organised there, according to the latest estimates. In the same period, 289 conferences/congresses were held in the Plzeň Region, attended by 31 800 participants (4.4% of the country’s total). The Region’s most important centre of congress tourism is the city of Plzeň and its environs with its advantageous position, good transport availability, and especially a great potential of suitable conference spaces (hotels, university compounds, etc.). Thanks to its rich cultural and social life, Plzeň can offer various cultural, social, and sporting leisure time activities within accompanying programmes of events organised there. In view of the industrial character of Plzeň, the most frequent subjects of the conferences are engineering, IT technologies, and science and education.

Located there is the Medical Faculty of Charles University and a teaching hospital employing a number of renowned specialists. A frequent theme of the congresses therefore is the area of medicine.

INVESTMENT Due to its geographic position, the Plzeň Region is attractive for foreign investors. Japan’s Panasonic AVC Networks Czech s.r.o., which manufactures flat panel displays, is dominant among the foreign investors. Other notable foreign companies include YAZAKI Wiring Technologies Czech s.r.o., producing components for the automotive industry, VISHAY ELECTRONIC s.r.o., manufacturing electronic components, BORGERS Cs spol. s r.o., manufacturing plastic products, MD ELEKTRONIK spol. s r.o., producing cable connectors, and Daikin Industries Czech Republic s.r.o., operating in the manufacture and repair of industrial cooling and air-conditioning equipment.

An important industrial park in the Region is Panattoni Park situated on the D5 motorway, the most frequented motorway in the Central and East European area, linking Bavaria with Prague.

The German border lies a mere 45 kilometres away and can be reached in

USEFUL CONTACTS Plzeň Region Portal – Regional Office – www.kr-plzensky.cz Municipality of the City of Plzeň – www.plzen.eu BIC Plzeň – Business and Innovation Centre – www.bic.cz Chamber of Commerce of the Plzeň Region – www.hkplzen.cz Regional Development Agency of the Plzeň Region – www.rra-pk.cz CzechInvest, Regional Office for the Plzeň Region – www.czechinvest.org 20 minutes by car. Important firms having their facilities in the locality include the companies Lear, Assa Abloy, Leoni, Ideal Automotive, and Gea. At the end of 2014, KION Group started the construction of a new plant in the park, where it will manufacture high lift trucks.

Other attractive industrial zones in the Region include Borská Pole, situated in the south-western quarter of Plzeň near the campus of the University of West Bohemia. This is the industrial zone where the first foreign investor – Panasonic – settled in 1996. The Park, with an area of 105 hectares, is attractive for investment in the automotive industry, manufacture of precision engineering products, air-conditioning equipment, production of moulds and plastic prototypes, and research and development.

CTPark Bor near the Czech-German border on the D5 motorway covers an area of 280 000 sq. metres. Most of the firms located in its seven giant halls are concerned with logistics. One of the facilities housed there is a warehousing terminal, the largest in the Czech Republic, covering an area of more than 71 000 sq. metres, owned by the leading world tyre manufacturer, Bridgestone. Other important firms are Maurice Ward from the UK, Germany’s DB Schenker, the American firm Tech Data, which assembles and distributes information technologies across Europe, and another American firm, Ceva Logistics, which in Bor runs the Dutch Philips company’s Central European distribution warehouse of consumer electronics.

The Chinese manufacturer of TV tubes and other electronic goods, Hisense, is building a plant in the CTP industrial park in Plzeň. The company will create some one hundred workplaces in West Bohemia.

Hisense is one of the largest Chinese manufacturers of consumer goods, which has chosen Plzeň as a gate for its massive entry of the European market and further expansion on the European continent. Another big firm, Faiveley Transport, a French supplier of components for the railway industry, is building a factory in Plzeň’s outskirts at Bručná, to which it will transfer about 450 employees currently working in Lekov works in Blovice, West Bohemia. The facility in the VGP to be completed at the end of 2015 will have manufacturing surfaces covering an area of more than 18 000 square metres and offices of some 3 000 square metres. The name of the new entity will be Faiveley Transport Czech.

The references of Faiveley Transport are, for example, its deliveries for the French high-speed trains TGV and deliveries of Faiveley Transport Lekov for pendolino trains operating on Czech railways. Its components will also be used in InterPanter trains, which Škoda Transportation is currently making for Czech Railways. The history of the Czech part of the firm dates back to 1934, when the Lekov works were founded. The Faiveley concern bought the company in 2001.

EDUCATION A great advantage of the Plzeň Region is the ample supply of skilled labour. The Region offers a wide range of secondary institutions in the branches of electrical, mechanical, and civil engineering as well as transport. Another source of the qualified workforce is the University of West Bohemia in Plzeň (UWB – ZČU in Czech). The University seeks collaboration with the business sector and targets the specialisations of its branches of study to meet the demands of the labour market. UWB has night faculties (for example Mechanical and Electrical Engineering, Economics, Applied Sciences).

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KORAN s.r.o.

IS A MANUFACTURER OF MACHINE TOOL ACCESSORIES

Reduced Design of Clamping Chuck – Power Driven Tool Can Easier Reach the Part Center

www.koran-rankov.cz KORAN, spol. s r.o.

Rankov 15, CZ 374 01 Trhové Sviny, Czech Republic Telephone: 00420 386 321 829, Fax: 00420 386 322 702 e-mail: info@koran-rankov.cz

Standard Design of Clamping Chuck

Doing Business in the C zech Republic VII. Regions

SOUTH BOHEMIA REGION The Region of South Bohemia used to be seen as an agricultural area with developed fish farming and forestry. Industrial development oriented towards manufacturing activities only started to appear in the Region during the 20th century.

Kašperk Castle

Statistical Data Population

637 204

1.–2. Q. 2015

CZK 23 025 (approx. EUR 836)

31 August 2015

4.52%

Source: Czech Statistical Office; EUR 1 = CZK 27.533

Of the Region’s seven districts, the District of České Budějovice, which is home to almost 30% of the Region’s inhabitants, has the highest population density. This is mostly due to the concentration of population in the city of České Budějovice itself, which has 94 800 residents. Other big towns include Tábor, Písek, Strakonice, and Jindřichův Hradec.

With its 10 057 sq. km, the Region takes up 12.8% of the entire Czech Republic.

More than 7 000 ponds, whose overall surface area today comprises over 30 000 hectares, were built within the Region’s territory in the past. A significant part of the Region’s border is formed by the state border with Austria and Germany (total length of 323 km). The Region’s border character provides opportunities for efficient cross-border cooperation in the area of manufacture as well as in the area of services, together with the development of the tourist trade, which utilises the overall attractiveness, unspoiled nature and many cultural monuments of the Region.

The Region of South Bohemia is not an area rich in raw materials.

Most importantly, there are almost no sources of power-producing raw materials. However, the expansive forests are an important natural treasure, especially in the Bohemian Forest and in the Novohradské hory Mountains. The forests are mostly coniferous, spruce and pine. The greatest raw material treasure is formed by deposits of sands and sandy gravels, brick clay, aggregate, and glass sands. Other important raw materials include peat and, in some locations, also limestone, diatomite, and graphite.There is a number of educational and scientific research institutions in the South Bohemia Region. The most important include the University of South Bohemia in České Budějovice, which comprises a public university-type school. The Region has always had the character of a recreational area rather than an industrially developed one. The efforts to preserve the natural environment are reflected in the establishment of the Šumava National Park. In agriculture, crop farming is

Gross wage Unemployment

Photo: CzechTourism archives, Pavel Ouředník

31 June 2015

ECONOMIC POTENTIAL

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Třeboň – Mediaeval Fortifications

mostly oriented towards cereals, oil crops and fodder plants. Animal breeding is dominated by cattle and pig farming. The Region has a long tradition of fish farming. The overall surface area of ponds used for fish farming is approximately 25 000 ha. The ponds provide more than half of the overall fish production in the Czech Republic. The Region also has a significant share in the farming of aquatic poultry (ducks and geese).

Industrial production is mainly concentrated in the vicinity of České Budějovice, with significant portions of the industry also in the districts of Tábor and Strakonice. However, the Region is not a crucial industrial area for the Czech Republic. The manufacturing industry is the most prominent and, within it, the manufacture of motor vehicles (excluding motorcycles), trailers and semi-trailers, and food production. The Region’s construction firms specialise in new buildings, reconstruction and modernisation. South Bohemia is easily accessible from the northern and eastern parts of the Czech Republic and from neighbouring Austria by the E55 motorway (Prague–České Budějovice–Linz), to which local roads are linked. International railway lines pass through České Budějovice; Veselí nad Lužnicí is an important railway junction. An international airport is located at a distance of 6 kilometres from České Budějovice.

In mid-2015, work began on its modernisation, with the aim of turning it into an airport offering the full-range of services for charter, tourist, business, and international and national cargo transport. Currently, the airport operator only holds a licence for non-public international flights allowing him to receive and handle only medium-size airplanes with a wing span of under 36 metres (more at www.airport-cb-cz).

Linz, Upper Austria, is the nearest public international civilian airport.

The exhibition grounds in České Budějovice host various kinds of exhibitions throughout the year. Most popular are the international “Bread Basket” agricultural fair and the “HOBBY” exhibition. Many types of cross-border cooperation have developed in recent years. One of these is the Šumava/Bayerischer Wald/Mühlviertel Euroregion, which covers an area of 16 000 sq. km with 1.3 million people. The Euroregion associates 111 Upper Austrian, 107 Bavarian, and 95 Czech municipalities (of which 56 municipalities are from the South Bohemia Region).

The South Bohemia Scientific and Technical Park, opened in 2014, offers equipped offices and laboratories, including laboratory instruments, technological halls, lecture and conference rooms and other facilities.

The Park supports selected projects – an example of an interesting idea is the creation of control software for the optimisation of the operation of small hydro-electric power stations. The project has been realised by Hydroservis Union pro s.r.o., together with the Technical University in Liberec, which developed a completely new method of controlling the

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revolutions of water-powered engines by means of a four-quadrant frequency converter. The new technology makes it possible to increase the output of waterpowered engines without the need of any construction adjustments or major changes of the hydro-unit.

INVESTMENT The Region has several industrial zones (zone locations at http://invest.krajjihocesky.cz) and cluster initiatives.

One of the largest and most attractive industrial parks in the Region is the Písek-Čížovská Industrial Park. With its surface area of 50 ha, this is the secondlargest Park in the Region and one with the best links to the motorway system.

The largest park, with a surface area of nearly 62 ha, is the Domoradice, Český Krumlov Industrial Park. Smaller industrial parks in the Region can be found in other towns – České Budějovice, Milevsko, Protivín, Soběslav, Strakonice, Třeboň, Jindřichův Hradec, and Nové Hrady. In 2014, CzechInvest Agency helped to attract three investment projects to the South Bohemia Region, worth nearly CZK 999.61 million.

EDUCATION With more than 13 000 students, the University of South Bohemia in České Budějovice (founded in 1991) is the largest educational and scientific institution in the Region (by national comparisons, it is a medium-sized university). The University offers a wide range of study courses run by eight faculties – Economics, Philosophy, Education, Science, Fish Husbandry and Protection of Waters, Theology, Agriculture, and Health and Social Studies. The University of Technology and Economics in České Budějovice and the Department of Management and Economy of the Prague Technical University in Jindřichův Hradec are no less important educational institutions in the South Bohemia Region.

Photo: CzechTourism archives; CzechTourism archives, Ladislav Renner

USEFUL CONTACTS South Bohemian Regional Authority – www.kraj-jihocesky.cz South Bohemian Chamber of Commerce – www.jhk.cz South Bohemian Agency for Support of Innovation Businesses – www.jaip.cz Regional Development Agency, RERA, a. s. – www.rera.cz University of South Bohemia – www.jcu.cz City Authority of České Budějovice – www.c-budejovice.cz

Doing Business in the C zech Republic VII. Regions

KARLOVY VARY REGION The Karlovy Vary Region is one of the smallest regions of the Czech Republic in both area and population.

Its geographic position, distant from the centre, makes it a periphery. However, thanks to this, the Region is open to foreign countries, especially Germany. The Karlovy Vary Region thus records the second highest number of resident or employed foreigners after Prague.

The Region is formed by three Districts – those of Cheb, Karlovy Vary, and Sokolov.

The Karlovy Vary Region is mainly famous for its spa industry. It is not only the region of the Czech Republic’s bestknown spa, Karlovy Vary, but also of the Mariánské Lázně, Františkovy Lázně, Lázně Kynžvart, and Jáchymov spas. In addition to the springs of curative water, the Region is also rich in natural mineral waters, with Mattoni as the best-known of these. In addition, Karlovy Vary is also famous for its Becherovka herbal liqueur and the art of the glassmakers of the Moser company. The town of Chodov has achieved fame for its rose porcelain, which is exported throughout the world.

ECONOMIC POTENTIAL The structure of the Region’s economy is very diverse. A number of branches are traditional in the Karlovy Vary Region (production of porcelain, glass and ceramics, textile and clothing industry, car-making industry, production of food and beverages, engineering and metal production, chemical industry, and mining of minerals). The Region is also renowned for its long-standing and rich industrial tradition documented since the Middle Ages, among other things, for the existing mining of diverse raw materials (e.g. tin, silver, kaolin, brown coal), the oldest porcelain factory in Bohemia, established in 1792, chemical and textile production started during the times of the Austro-Hungarian monarchy, etc.

The best-known of the traditional industrial areas of the Karlovy Vary Region is the Sokolov District, with such important sectors as the energy industry and extraction of coal used for power generation, chemical and engineering industries, textile and clothing industry, Statistical Data Population Gross wage Unemployment

31 June 2015

1 320 352

1.–2. Q. 2015

CZK 26 035 (approx. EUR 946)

31 August 2015

5.46%

Source: Czech Statistical Office; EUR 1 = CZK 27.533

and building material production. The territory of the Sokolov District is undergoing a gradual economic restructuring towards new industrial sectors (electrical engineering and electronics), and environmentallyfriendly use of energy sources. The transformation of the Sokolov District is represented by extensive favourable changes related to landscape renewal within the liquidation of the effects of brown coal mining in used-up locations (e.g. recultivation and revitalisation of the landscape with lakes of sizes in the order of tens and hundreds of hectares, golf courses, parks, sites for housing, leisure, and new business activities).

The manufacturing industry has a long-standing tradition in the area of the town of Ostrov (mechanical and electrical engineering and woodworking industries), the Cheb area (engineering, musical instruments production, production of ceramic and building materials), and the Aš area (textile and clothing industry, engineering). The plastic materials industry is a new development here. The area of Kraslice is well-known for its manufacture of musical instruments, e.g. the Amati and Strunal brands, and for engineering and textile industries.

The Karlovy Vary Region has the only public civilian international airport in the Czech Republic west of Prague. The airport, situated 4.5 km away from Karlovy Vary, has undergone extensive reconstruction and modernisation in recent years. The purpose of the modernisation was to increase its technical level to standards usual for airports of this category and to increase its capacity, including preparations for the operation and handling of passengers travelling within the Schengen Area, because passport control and customs checks of passengers are performed at the airport.

In 2014, the Karlovy Vary airport processed 85 596 passengers, 19% less than in the 2013 record year. The decline continued throughout the year 2014, but in the first quarter it was mainly due to the fact that in 2013 ČSA operated flights to Samara, Ural Airlines to Tyumen, and Rossiya Airlines to Petersburg, which were stopped at the end of the first half of 2013.

Tourism continues to be one of the most important sectors in the Karlovy Vary Region. In the first half of 2015, a total of 392 139 guests visited the Region. The guests visiting the Karlovy Vary Region have a great choice of cultural and entertainment events, and opportunities to enjoy the beautiful environment with a number of historical sites.

There are several spa symphonic orchestras in Karlovy Vary, where also several festivals are held each year. The best known of them is the Karlovy Vary International Film Festival. Other cultural and sporting events are, for example, the Cultural Summer in Loket, Chopin’s Festival in Mariánské Lázně, and Kanoe Mattoni.

Karlovy Vary

INVESTMENT In the past, the Karlovy Vary Region did not attract tremendous interest of foreign investors, but this is to change rapidly. In the first few months of 2014, seven investors applied for investment incentives in the Karlovy Vary Region, which ranks it sixth among the regions, together with the Olomouc and Zlín Regions, but higher than the latter two in terms of the number of jobs this may generate (up to 844 new positions).

The Region offers a number of industrial parks and zones. For example, the Aš Industrial Park, on the territory of the town of Aš (13 090 inhabitants) is a ‘greenfield’ project. The land with a total area of 108 hectares is designated for sale or lease to companies which will engage in economic activities here in the areas of light industry, trade and crafts, without any negative effect on the environment. The town of Aš and its surroundings is a traditional area for the textile industry.

But there are also several major enterprises concerned with engineering production. The town is situated on the border with Germany (Aš – Selb border crossing). In 2002, a new bypass was built past the town’s western outskirts, which improved access to the Industrial Park.

Aš is connected with the new road bypassing the town of Cheb in the north (I/6 – E48 road) Nuremberg–Cheb–Prague, and the A93 Munich–Berlin motorway is within easy reach as well. The international airport in Hof, Germany, is about 35 km away, and the Karlovy Vary international airport is approx. 70 km distant. The Region’s advantage is cheap and experienced workforce, especially in mechanical and electrical engineering and textile production, in addition to having a good knowledge of the German language.

The site of the 35-hectare Cheb Industrial Park is situated on the eastern edge of the town of Cheb, near a high-speed bypass, a mere 8 km from the Pomezí/Schirnding border crossing to Germany. The plots, owned by the Cheb municipality, are designated for the siting of production facilities, logistics centres and commercial or service buildings, preferably for investors who will ensure production with a higher value added. A number of firms operate in the zone, e.g. HF-Czechforge s.r.o. (Germany) – a sister company of the Hammerwerk Fridingen firm – operates a modern drop forge specialising in steel forgings, JSP International s.r.o. (Japan, France) – plastic products processing, and Playmobil CZ spol. s.r.o. (Germany) – plastic and rubber products.

In September 2015, the construction of a manufacturing plant of BWI Group started in this industrial park.The Chinese investor, manufacturer of brake systems for automobiles, is planning to employ some 300 people in Cheb.

The Staré Sedlo Industrial Zone is situated near Sokolov (24 177 inhabitants) and Staré Sedlo (820 inhabitants). The Industrial Zone, with a total area of 124 hectares, is ready for use in terms of planning documents.

Given the good transport links, the area is designated as a site of strategic importance for the Karlovy Vary Region. The town of Sokolov is situated in the central part of the Sokolov basin, at the foot of the Ore Mountains.

The brown coal reserves of nationwide significance, and the related power production, make the Sokolov District a major energy hub of the national and international transmission systems. The town is situated on the R/6 high-speed road, on the international Nuremberg–Cheb– Sokolov–Karlovy Vary–Prague international route, and an important role is also played by the Cheb–Karlovy Vary–Ústí nad Labem regional railway. There is a number of secondary vocational schools in the town, focused on mechanical engineering and the building industry.

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At the end of 2014, three new surfaces suitable for industrial construction were added to existing investment opportunities in the Karlovy Vary Region.

Panattoni Park Aš – located in the close vicinity of the German motorway A93, not far from Saxon and Bavarian car factories. Owing to this fact and thanks to the good supply of skilled employees, Aš is an ideal location for suppliers to Germany.

Skalná – a locality suitable for investment construction in the area of industrial and small-scale production, within easy reach of existing engineering networks. The local authority is open to further investment and cooperation with the business sector.

The BSS industrial park of Báňská stavební společnost s.r.o., covering an area of 14.3 ha, is situated right in the city of Sokolov in Chebská street, linking Sokolov with Dolní Rychnov. The compound comprises administration buildings, halls and warehouses. It can be reached by local roads, with a link to road R6 Cheb – Karlovy Vary. The park has its own railway siding. It is suitable for public utilities, industrial production, or as a logistics centre, etc.

EDUCATION The Region is home to a number of secondary-level vocational schools, which have been focused for decades on education in local traditional sectors and branches, often specific to the Karlovy Vary Region. In cooperation with the Sokolov Municipality and the Karlovy Vary Region, the College of Information Management, Business Administration and Law offers studies in Applied Informatics and Management Economics in Sokolov. The town also hosts the Faculty of Mechanical Engineering – an establishment of the University of West Bohemia in Plzeň. The Czech University of Life Sciences – namely the Faculty of Environmental Science and the Faculty of Economics and Management – has a distance centre in Karlovy Vary, as do the College of Banking (BIVŠ) and the Faculty of Economics as a branch of the University of West Bohemia in Cheb.

The only university based in the Karlovy Vary Region is the College of Karlovy Vary. Its Bachelor’s programmes offer studies in Criminal Law Activities, Business Law, Socio-Legal Activities, Judicial and Notarial Administrative Activities, and Public Administration.

Photo: CzechTourism archives, Ladislav Renner

USEFUL CONTACTS Karlovy Vary Regional Authority – www.kr-karlovarsky.cz Regional Chamber of Commerce for the Poohří Area – www.rhkpoohri.cz Internet portal for investors in the Region of Karlovy Vary – www.karlovyvary-region.eu District Chamber of Commerce in Cheb – support for entrepreneurial activities – www.ohkcheb.cz City Authority of Karlovy Vary – www.mmkv.cz

Teplice

ÚSTÍ NAD LABEM REGION The Ústí nad Labem Region, one of the Czech Republic’s most industrialised areas, has been the country’s main energy supplier for years. After the phasing out of intensive coal mining in the 1990s and the revitalisation of the countryside, the Region is regaining its reputation as an area of European significance with unique natural resources. Its efforts to improve the environment still further and to revitalise vast new areas are continuing.

The city of Ústí nad Labem, a transport junction of national and international significance, where important European roads, railway lines and waterways cross, is the centre of the Region. The Ústí nad Labem Region is divided into seven districts (Děčín, Chomutov, Litoměřice, Louny, Most, Teplice, and Ústí nad Labem). In addition, there are four areas in the Region which differ from each other significantly. One of these is the area in the foothills of the Ore Mountains with strongly developed industry, comprising the Districts of Chomutov, Most, Teplice, and a part of Ústí nad Labem.

The dominant industries here are power generation, coal mining, engineering, the chemical industry, and glassmaking.

The Ústí nad Labem Region has a number of attractive localities for tourStatistical Data Population Gross wage Unemployment

31 June 2015

823 103

1.–2. Q. 2015

CZK 23 314 (approx. EUR 847)

31 August 2015

9.21%

Source: Czech Statistical Office; EUR 1 = CZK 27.533

ists. The development of tourism is one of the Region’s priorities. The best-known natural attractions of the Region include the Bohemian Switzerland National Park, covering an area of 7 900 ha, established in the year 2000, the Bohemian Highlands, and the Labe Sandstones protected landscape areas, a part of the Kokořín area and the Lužice Mountains, the lovely pathway along the Labe with Porta Bohemica, the Tiské stěny Walls rock formations, and many others.

ECONOMIC POTENTIAL The area extends around Litoměřice and Louny and is known for hop cultivation and the growing of vegetables. The Labe and Ohře valleys are famous fruit-growing areas, known as the “Garden of Bohemia”.

The grape varieties grown around Litoměřice are also renowned.

In recent years, another area, that around Most, has become a wellknown vine-growing district, where vines are cultivated especially on post-mining re-cultivated land. The Ore Mountains area is a sparsely populated, mountainous landscape with limited economic activities.

The last area to be mentioned is that around Děčín, which has no heavy industry and no agriculture (its northern part around Šluknov is too far from the centre of the Region, not easily accessible and is a typical periphery area). The Region’s traditional industries are engineering and the chemical industry.

Besides the Region’s typical engineering centres (Děčín, Ústí nad Labem, Roudnice nad Labem, Louny, Klášterec nad Ohří, Varnsdorf), engineering enterprises have settled in practically every new industrial park, which has resulted in a marked growth in employment in the sector. The chemical industry, too, has a long tradition in the Region.

There are many good reasons for its location here: sufficient supply of water from the Labe River, which at the same time provides good

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USEFUL INFORMATION Ústí nad Labem Regional Authority – www.kr-ustecky.cz North Bohemian Association of Communities – www.seso.cz Regional Development Agency of the Ústí nad Labem Region – www.rra.cz transport opportunities, the vicinity of the North Bohemia brown coal mines (manufacture of liquid fuels from brown coal was the original production programme of the chemical factory at Záluží near Litvínov), and a good market for its products (fertilisers from Lovochemie in Lovosice supplied to the surrounding farming areas).

There is also a new technological and innovation centre in the Region, Nupharo, situated not far from Ústí nad Labem. Its business incubator supports beginning firms by helping them in applying for grants from the European Union or obtaining advantageous loans for investment, innovation, research, covering working costs and for marketing. The total surface area of the compound is 16 000 sq. m. The main investor is the Swiss ABB company. The company has chosen this locality situated by the D8 motorway near the border with Germany for its strategic position on the Prague–Dresden–Berlin route. The Park wants to cooperate with J.E. Purkyně University in Ústí nad Labem and other universities.

The Faculty of Transport of the Czech Technical University, which has a branch in Děčín, is preparing three projects for Nupharo.

INVESTMENT The Ústí nad Labem Region holds great allure to foreign investors and the Region has a lot to offer investors, including strategic industrial parks (SIP). One of these is the Joseph SIP, located in Havraň, Most District, some 8 km from the city of Most with its population of 67 500.

It covers an area of 196 ha. The companies located in the Joseph SIP and pursuing business activities there are, for example, Nemak Czech Republic, s.r.o. and AFSI Europe, s.r.o. The Triangle Strategic Industrial Park is located in an area whose boundaries overlap three districts

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– Chomutov, Most, and Louny. The locality adjoins the Prague–Chomutov–Hora Sv. Šebestiána/Reitzenhain, Germany expressway, which crosses the I/27 Most–Žatec–Plzeň road. The industrial park covers an area of 365 ha. At the end of the first half of 2015, 2 581 people worked for domestic and foreign investors in the Triangle Strategic Industrial Park, 444 more than at the end of 2014. This former military airport hosts a number of investors, for example, Solar Turbines EAME s.r.o., which specialises in turbine repair and revision, Gestamp Louny s.r.o., and Hitachi Automotive Systems Czech s.r.o., manufacturing components for the automotive industry. In 2014, the Korean company, Nexen, announced its plans to place a huge investment project – a car tyre manufacturing plant – in the Czech Republic, specifically in the Triangle Industrial Park, on an area of approximately 70 ha.

Other investors coming to the Ústí Region are the British firm Regenersis, which repairs electronics, and the Japanese manufacturer of rubber parts, Fukoku. Regenersis will rent 3 000 sq. m of surface in the CTPark Teplice, where a high-tech repair centre is being

Photo: CzechTourism archives, Jaroslav Mareš

Hazmburk – Gothic Castle Ruins

Doing Business in the C zech Republic VII. Regions

built. CTPark Teplice consists of three industrial halls. The total utility area of all the buildings taken together is 35 400 sq. m. The space is suitable for warehousing, logistics, light manufacturing, and assembly.

A new factory for the company SSI Technologies s.r.o. has been under construction at Přestanov near Ústí nad Labem since the end of April. In the first phase, the American manufacturer of magnetic sensors, pressure and depth sensors, monitoring systems and digital pressure gauges for the automotive and mechanical engineering industries will employ approximately 120 people. New buildings with 3 515 sq. m of working surface area and 1 821 sq. m of office surface area will be completed in VGP Park Ústí nad Labem by the end of 2015.

Other industrial parks are to be found in Kadaň, Chomutov, Rumburk, and Klášterec nad Ohří. The Region can offer a large number of unused industrial and commercial facilities to investors preferring already existing facilities.

EDUCATION Ústí nad Labem is also an important centre of tertiary education, led by the Jan Evangelista Purkyně University. One of the undeniable assets of the University is that it is a classical type of university, with both traditional university faculties, such as the Faculties of Philosophy, Natural Science, Pedagogics and Socio-Economics, and non-traditional, but very much needed faculties, such as the Faculty of the Environment, Faculty of Production Technologies and Management, Faculty of Arts and Design, and the Institute of Healthcare Studies. Hundreds of foreign students come to Ústí nad Labem each year to study at J.E. Purkyně University (UJEP). The students come from various countries, but most of them, on a long-term basis, come from the Russian Federation and Turkey.

Currently, 188 foreign students are enrolled at the University attending courses for a Bachelor’s, Master’s, and Doctoral Degree. Most of them come from the Russian Federation (53), Slovakia (41), and Ukraine (40), but there are also dozens of students from Vietnam, Kazakhstan, Belarus, and Germany.

Another higher-learning institution at which university education can be obtained in the Region is the College of Applied Psychology, Ltd., in Terezín. The Region also hosts detached workplaces of other public universities. For example, branches of the Transport Faculty and the Faculty of Nuclear and Physical Engineering of the Czech Technical University are located in Děčín and branches of the Faculty of Chemical Technology of the Institute of Chemical Technology and the Faculty of Mining and Geology of the Mining University are located in Most.

Český porcelán, a.s. has been in the market for 150 years. It manufactures utility, hotel, and decorative porcelain in different shapes and decors. Its best-known product, the blue onion pa ern porcelain, o en referred to as a blue-blood product, is exported throughout the world. The company manufactures nearly 700 different shapes with more than 3 000 different decors. The new items of Český porcelán at Dubí specifically include the Opera tea, coffee, and dinner sets. These are not intended exclusively for prestigious events, but are also suitable for modern homes.

We are confident that our range will appeal to even the most demanding customers of all ages. Examples of our products are the Praha Eco young-generation porcelain, and the Bohemia set, designed by Professor Jiří Pelcl, which meet the expectations of both households and restaurants with their timeless design.

Our production technologies conform to the conditions and parameters required for use in automatic dishwashers and microwave ovens. The company´s mo o is to offer a wide range of high-quality products at friendly prices contributing to customer satisfaction.

www.cesky.porcelan.cz

Český porcelán, a.s., Tovární 605/17, 417 01 DUBÍ, Czech Republic Telephone: +420 417 518 111 e-mail: prodej@cesky.porcelan.cz

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LIBEREC REGION

Ještěd Mountain

The Liberec Region, situated at the northern tip of the Czech Republic and bounded by a 20-km long stretch of frontier with Germany and a 130-km stretch with Poland, has easy access to the large industrial and administrative centres, Prague and Dresden, Germany, with developing links to the main European transport lines of Berlin–Prague–Vienna (Multimodal Corridor IV) and Leipzig–Dresden–Wroclaw (Multimodal Corridor IIIA).

ECONOMIC POTENTIAL The diversity and natural character of the Liberec Region are characteristics influencing business activities. Great population density in the centres of industry, hilly terrain, and restrictive environmental limits do not allow for the development of new large-size areas. The greatest concentration of business activities and foreign capital can be found in Liberec and its environs, especially in the sites of traditional industrial production. The development of various forms of collaboration between business firms and their link-ups with research and development facilities is of great importance for the strengthening of economic competitiveness. There are various professional associations operating in the Region, as well as clusters, as geographically close groups of linked-up enterprises, contractors, service providers and professionally related institutions, brought together by common and complementary interests.

These include, for example, the CLUTEX “Technical Textiles” cluster, and the Czech Membrane Platform, o.s., based in Česká Lípa, associating experts and institutions focusing on the research, development, realisation, and use of membrane operations in technological processes.

Science and technical parks are centres where research and development projects can best be developed. The Textile Machinery Research and Development Institute (VÚTS, a.s.) in Liberec has opened an innovation and technological centre and, in 2012, started the construction of a science and technical park in Dubá and a membrane innovation centre of the company, MemBrain s.r.o., at Stráž pod Ralskem.

The most important projects realised in the Liberec Region include projects for the development of a new research and innovation infra-

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structure supported by EU funding (The Institute for Nanomaterials, Advanced Technology and Innovation, The Research, Development, and Tuition Centre for Advanced Technologies, and The Engineering Research Centre Liberec).

INVESTMENT There are eight industrial parks in the Liberec Region, with a total surface area of more than 450 hectares, according to the Centre for Regional Development of the Czech Republic. The parks are located in the vicinity of or directly on the territory of Liberec, Nový Bor, Hrádek nad Nisou, Turnov, Ralsko, and Stráž pod Ralskem.

Most of these are utilised by investors.

The majority of enterprises located here are in some way linked with the automotive industry. The largest investors include the Japanese manufacturer of air conditioning units, Denso Manufacturing, which invested around three billion Czech crowns in the Liberec compound.

Statistical Data Population Gross wage Unemployment

31 June 2015

439 108

1.–2. Q. 2015

CZK 23 987 (approx. EUR 871)

31 August 2015

6.5%

Source: Czech Statistical Office; EUR 1 = CZK 27.533

Photo: CzechTourism archives, Jan Strakoš

The large number of historical buildings and other sights, as well as cultural institutions, are witness to the Region’s rich cultural and historical tradition. Institutions of regional importance include a number of museums and galleries in different parts of the Region. With respect to the glassmaking and fashion jewellery production in the area, tourists are invited to visit glassmaking museums in Nový Bor, Kamenický Šenov, and Železný Brod, and the Museum of Glassmaking and Costume Jewellery in Jablonec nad Nisou. The Bohemian Paradise District Museum in Turnov houses its own collections, covering the areas of Geology, Mineralogy, and Goldsmithery and Jewellery, which are unique, not only on the national, but also the pan-European level.

There are two spa resorts in the Region: Libverda and Kunratice.

Besides cultural and historical sights, visitors can admire the natural beauties of the Region – its exceptional countryside and rock formations. From the natural science point of view, the Liberec Region is important for its great variety of natural ecosystems, a high concentration of protected areas and rare localities of great botanical and zoological importance. There is one National Park in the Region (Krkonoše National Park), as well as five Protected Landscape Areas (Bohemian Highlands, Jizera Mountains, Lusatian Mountains, Bohemian Paradise, Kokořín), seven National Nature Reserves, eight National Natural Monuments, 35 Nature Reserves, and 56 Natural Monuments.

In 2015, Denso Manufacturing Czech decided to invest nearly CZK 400 million in the enlargement of its plant in Liberec, as its current manufacturing capacity is no longer sufficient to meet growing demand. By enlarging the hall, the firm will be able to adapt the manufacturing surface so as to ensure a continuous and efficient flow of material and information. The Denso Manufacturing plant in Liberec is the largest employer in the Liberec South Industrial Park. Currently it employs 2 285 people, of which number 1 814 are workers.

Another two large companies – Ontex, an important manufacturer of hygienic products, and SFS intec., manufacturing connecting materials – have chosen the Vesecko Industrial Park near Turnov.

One of the largest investment projects mediated in the Region by CzechInvest Agency has settled in the Hrádek nad Nisou Industrial Park: Drylock Technologies, specialising in the manufacture of disposable hygiene items, which employs some 200 people. The aim of the regional authorities is not only to attract investors to existing industrial parks, but also to make use of the local brownfields for their business activities.

In 2014, the Liberec Region obtained funds for investment mediated by CzechInvest Agency to the amount

USEFUL CONTACTS: Liberec Region – www.kraj-lbc.cz Liberec Regional Office – www.liberec.cz Liberec Regional Chamber of Commerce – www.khkliberec.cz Technical University of Liberec – www.tul.cz of nearly CZK 3.015 billion. It is the highest amount the Region has obtained over the past seven years. Thanks to those investments up to 490 new jobs will be created in the Liberec Region, most of them in the Magna Exteriors & Interiors company in Liberec and in ONTEX CZ in Turnov. Very important is the project for the enlargement of the Magna Exteriors & Interiors company, which specialises in the manufacture of plastic components for the automotive industry.

EDUCATION A typical feature of the Liberec Region is the large number of secondary art schools of supra-regional significance located here. These are mainly secondary schools of applied arts, specifically glassmaking and costume jewellery schools. Higher learning is represented by the Liberec Technical University, which runs 110 study programmes with more than 200 branches of study. In 2014, its enrolment was nearly 8 000 students.

The study programmes have Bachelor’s, Master’s, and Doctoral degree accreditation. Most of them are attendance or combined courses; some programmes are accredited for tuition in the English language. For example, in 2014 the Medical Studies Institute enlarged its Master’s degree studies with the addition of Biomedical Engineering courses.

The University prides itself on a number of achievements in research; for example, in 2015 its “nano” research entered a revolutionary phase, when the European Union awarded it the prestigious project NANOMATCON (multifunction nano particles and materials controlled by structure) . Its partners in the NANOMATCON project are the important German industrial and research company Fraunhofer-Gesellschaft and the Czech-German Chamber of Industry and Commerce. The planned research under this project is aiming at a new industrial revolution in the area of highly functional nano materials. The outcome of the project will be an excellent research workplace oriented towards the automated creation of extra fine 3D structures with functional nano particles.

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PARDUBICE REGION

The Pardubice Region is characterised by its diversity of natural conditions, population density, and industrial and agricultural production. Future development of the Pardubice Region will benefit from the Region’s advantageous location, which is good for transport links. There are 542 km of railway tracks in the Region, the most important railway hubs including the towns of Pardubice and Česká Třebová, which form a part of the international railway corridor, Berlin–Prague–Brno–Vienna.

Pardubice Airport, which serves both military and civilian air traffic, is key to the regional air transport.

The Pardubice Region has many prerequisites for the development of the tourist trade. The Region comprises beautiful landscape of both flat and mountainous character, a favourable climate and many opportunities for bathing, water sports, walking tours, cycling and winter sports.

Attractive tourist locations include the northern and eastern parts of the Ústí nad Orlicí District – the foothills of the Orlické hory Mountains, the Buková hora Ski Region, and Sněžník Dolní Morava Ski Resort. Agrotourism, especially with an emphasis on traditional horse breeding, is developing throughout the entire Region (in the foothill areas).

Every year, many visitors come to see the national stud farm in Kladruby nad Labem. Besides regular tours, the stud farm also organises various events for horse lovers. Tourist highlights in the Svitavy District include Svojanov Castle and Litomyšl Château, which has been on the UNESCO World Cultural Heritage List since 1999. The Pardubice racetrack, where the Velká Pardubická Steeplechase Statistical Data Population Gross wage Unemployment Kunětice Mountain Castle

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31 June 2015

516 045

1.–2. Q. 2015

CZK 21 801 (approx. EUR 792)

31 August 2015

6.21%

Source: Czech Statistical Office; EUR 1 = CZK 27.533

Photo: CzechTourism archives, Libor Sváček

The Pardubice Region is located in the eastern part of Bohemia, and, together with the regions of Hradec Králové and Liberec, forms the North-East Cohesion Region (NUTS 2). A part of the Region’s north-eastern border also forms the border between the Czech Republic and Poland. The land area of 4 519 sq. km (5.7% of the area of the CR) makes the Pardubice Region the fifth smallest region in the country. The Pardubice Region consists of four districts – Chrudim, Pardubice, Svitavy, and Ústí nad Orlicí.

Doing Business in the C zech Republic VII. Regions

takes place, is the Region’s most famous sporting venue. In addition, the Region is the leader in many other sports.

ECONOMIC POTENTIAL The Region’s economy mainly depends on general engineering and electronics. The following industries are also represented: chemical, textile, clothing, leather manufacturing, and food-processing. However, the chemical industry, which has the highest share in national production, is the most important. The Region also has a tradition in the area of electrotechnical and electronic industries, linked with the Tesla trademark, on which a number of other companies also build. These companies have benefited primarily from the existing research and development base and skilled labour. Industry in the Pardubice Region is broadly diversified. The automotive sector also plays an important role, in addition to the IVECO bus manufacturers. Other important employers include AVX Czech Republic in Lanškroun (electrical engineering), Iveco Czech Republic in Vysoké Mýto, Synthesia Pardubice (chemical industry), Saint-Gobain Adfords CZ in Litomyšl (glassmaking), Rieter CZ in Ústí nad Orlicí (manufacture of textile machines and a sub-supplier to the automotive industry), OEZ in Letohrad (electrical engineering), KIEKERT-CS Pardubice with its centre of operations in Přelouč (automotive industry), Panasonic Mobile & Automotive Systems Pardubice (manufacturer of mobile phones and audio-visual equipment), Automotive Safety Components International in Jevíčko (sub-supplier to the automotive industry), and REHAU, s.r.o., in Moravská Třebová (automotive and plastics industries). Enterprises with well-known names include Paramo in Pardubice, Eta in Hlinsko, and Korado in Česká Třebová. Clusters play an important role in the development of modern technologies and in improving competitiveness. The Region hosts the “Nanomedic Medicine-Pharmaceutical Cluster”, which associates a number of firms, universities and research institutions to collaborate in the area of research, development, production, and commercial realisation in the medical and nanotechnological fields.

The Region comprises approximately 20 industrial zones. Businesses can make use of ‘brownfields’, i.e. space that has lost its original economic use. Brownfields tend to be large premises in larger towns (most of them are available in Pardubice). The largest brownfields in the Region are usually former military areas.

USEFUL CONTACTS Regional Authority of the Pardubice Region – www.pardubickykraj.cz University of Pardubice – www.upce.cz Regional Chamber of Commerce of the Pardubice Region – www.khkpce.cz City Authority of Pardubice – www.pardubice.eu Regional Development Agency for the Pardubice Region – www.rrapk.cz INVESTMENT The Pardubice Region was ranked the best region among 468 rival localities in Eastern Europe in the European Cities and Regions of the Future 2014/2015 survey. This ranking was due especially to the number of important projects realised here recently, such as the campus and the overall development of Pardubice University and the linking of the Pardubice regional city to the D11 motorway by a four-lane trunk road, as well as its offer of industrial parks. For example, the Pardubice City Industrial Park is situated in the western outskirts of Pardubice, some 6 kilometres from the city centre. It lies in the cadastre of Staré Čívice between the I/2 highway leading to Kolín and Prague and the PraguePardubice railway line, which is part of the Berlin-Prague-Vienna international high-speed rail corridor. The first large project in the Park was an investment by Panasonic Automotive Systems Czech. The Park is home to the Pardubice Scientific and Technological Park. A great advantage of the Pardubice Industrial Park is its situation in the outskirts of the regional city, which provides a good social, cultural, and sporting background for its 90 000 inhabitants. There is a good supply of skilled labour, especially in the area of science and research.

The Swiss company Ronal CR is another car-making firm, which has settled in the Pardubice industrial park. It came to Pardubice in 2004.

Its core business is manufacture, research, development, and sale of components for cars, specifically aluminium wheels. Its exclusive clients are manufacturers of renowned car makes, such as Audi, Ford, Chrysler, Opel, Porsche, Saab, Škoda, Volkswagen, and many others.

The construction of the production compound on a ten-hectare plot began in December 2004 and serial production two years later, in 2006.

One of the companies having its manufacturing plant in the Černá za Bory Industrial Park is FOXCONN CZ, s.r.o., Pardubice, which specialises in the manufacture of computer technology. In addition, Foxconn would like to build a research and design centre in the Czech Republic, which, if realised, would be the only one of its kind in Europe. The firm is also planning to develop a fully automated solution for application in production, which it will use in its manufacturing plants in Pardubice and Kutná Hora. The project would offer thousands of jobs to skilled specialists and would strengthen the export position of Czech products in Asian markets. In the Czech Republic, Foxconn employs some 5 500 people. Of this number about 4 500 work in the Pardubice plant.

EDUCATION Pardubice University, the only university in the Region, is 65 years old. During its existence it has undergone great development of its study programmes and scientific disciplines. Its enrolment has grown fourfold to the current 10 500 students. The University has witnessed major advances in the area of science and research, thereby gaining the respect of both the local and international scientific community. It has seven faculties, one of which is located in Litomyšl. The University offers Bachelor’s, Master’s, and Doctoral study programmes in 130 branches. This ensures a good linkage between the educational institutions and local industry (Chemical Technology Faculty, Transport Faculty, Faculty of Electrical Engineering and Informatics, and Electrical Engineering Secondary School). The presence of foreign educational institutions, such as the British Centre, Alliance Française and the Goethe Zentrum, are also of importance.

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HRADEC KRÁLOVÉ REGION The Hradec Králové Region is situated in the North-East of Bohemia. More than one-third of its boundary, a stretch of about 208 km, forms the Czech Republic’s state frontier with Poland. The Region consists of five Districts – Hradec Králové, Jičín, Náchod, Rychnov nad Kněžnou and Trutnov.

ECONOMIC POTENTIAL The Hradec Králové Region can be characterised as being an agricultural and industrial area with well-developed tourism. Industry is primarily concentrated in towns, while agricultural production is thriving on land bordering the River Labe. From the sectoral point of view, employment is high in branches such as car making, manufacture of electrical equipment, engineering, textile production, healthcare, and the rubber and plastics sector.

The main export items are products of the automotive and engineering industries and electrotechnical components. Exports are dominated by motor vehicle components and cars, which account for more than one-quarter of total exports. More than 3% of total regional exports is accounted for by rotating electrical machines and parts thereof, ferrous products, circuit switching and breaking devices, pumps, cisterns, textiles, and rubber products.

Sectors with the highest sums spent on research and development in the Region include Information Technologies (software development) and architectonic and engineering activities (development and construction of components for the automotive and engineering industries, development and supply of technological wholes for the chemical industry, power engineering, coke production, and food processing, which together account for more than 30% of the expenses.) This is followed by the manufacture of components and accessories for motor

USEFUL CONTACTS: Regional Office of the Hradec Králové Region – www.kr-kralovehradecky.cz Hradec Králové Technological Centre – www.tchk.cz University of Hradec Králové – www.uhk.cz Regional Development Agency of the Hradec Králové Region – www.cep-rra.cz Regional Chamber of Commerce – North-East Bohemia – www.rhkhradec.cz Hradec Králové City Authority – www.hradeckralove.org Glacensis Euroregion – www.euro-glacensis.cz

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vehicles and their engines (especially braking and windshield wiping systems), research and development in the area of natural and technical sciences (breeding, textile materials, and biotechnologies), manufacture of other special-purpose machines (printing machines, mining and building machines, machinery for pharmaceutical and food processing plants, and power generating equipment), manufacture of rubber products, medical devices, and other items.

There are several clusters operating in the Region. The IT cluster in Hradec Králové focuses on the use of new information and communication technologies in the development of products manufactured by the cluster members, distributed backups, automatic control of the development of information systems, information systems safety and the housing server.

The Hradec Králové TECHNOLOGICAL CENTRE participates in the realisation of projects financed from EU funds, the aim of which is to raise the level of education and competitiveness in the Region and in particular to facilitate students’ entry into professional life.

Within the framework of these projects, the Technological Centre cooperates with recognised research and educational institutions in the Czech Republic (Hradec Králové University, Masaryk University, the Association of Scientific and Technical Parks).

INVESTMENT Altogether 40 investment projects were realised in the Hradec Králové Region between 1993 and 2014 under the Investment Incentives Programme. More than CZK 36.2 billion was promised for investment and more than 10 000 jobs were created within the framework of this programme. Most of the investments concerned the manufacture of transport vehicles (including components), the electronic and electrotechnical industries, the chemical and pharmaceutical industries, engineering, and the textile industry. There is a number of industrial parks in the Region—for example in Kvasiny (Rychnov nad Kněžnou District) and Vrchlabí (Trutnov District). Further

Photo: CzechTourism archives, Ladislav Renner

As regards the number and importance of natural assets, the Region is one of the richest in the Czech Republic. Many areas and localities are extremely valuable and there is a large number of protected areas.

From the point of view of areas of natural beauty, the most valuable are the Krkonoše National Park and the Orlické Hory, Broumov and Bohemian Paradise Protected Landscape Areas. The rich and varied natural and cultural wealth of the Hradec Králové Region, its attractive natural localities and the well-preserved environment are good prerequisites for the development of tourism. Especially attractive areas are those with a high natural potential, areas boasting a rich cultural heritage of historical sites, as well as several renowned spa resorts. To meet the requirements of the massive development of cyclotourism and its rising popularity in recent years, new cycle trails of regional and supra-regional importance are being built and marked. Hiking trails, too, have a long tradition in most areas of the Hradec Králové Region.

The Region also boasts several spa resorts, the most popular of which is Janské Lázně for the treatment of diseases and disorders of the nervous system and the motor system, and skin diseases. The spa is also a well-known winter sport resort.

Doing Business in the C zech Republic VII. Regions

Statistical Data Population Gross wage Unemployment

Art Nouveau building – Hučák Power Plant

31 June 2015

551 175

1.–2. Q. 2015

CZK 23 458 (approx. EUR 852)

31 August 2015

4.87%

Source: Czech Statistical Office; EUR 1 = CZK 27.533

development is expected of the Kvasiny Industrial Park, where Škoda Auto has its manufacturing plant. ŠKODA AUTO is further planning to invest more than seven billion Czech crowns to increase its production in the Hradec Králové Region. In adddition to creating 1 300 new jobs, the project is expected to indirectly create 400 more workplaces in the Region by ŠKODA’s subcontractors. In connection with the investment project the realisation of a new strategic industrial park sized 51.62 hectares linking up with the existing Kvasiny strategic industrial park is envisaged. In 2015, ABB company opened a new manufacturing plant in the Krkonošská Industrial Park in Trutnov, which significantly increased the company´s production capacity and supported growth in the area of power network automation. The company

also wants to strengthen its engineering centre, which among others concerns itself with the development of applications for intelligent networks and cybernetic safety.

EDUCATION The core programme of the Pharmaceutical Faculty of Charles University in Hradec Králové is the research and development of new drugs, drug forms, drug delivery systems, Biomedicine (Centre for the Study of Drugs and Other Biologically Active Substances from the Perspective of the Prevention and Treatment of Important Lifestyle Diseases, Centre for the Study of Toxic and Protective Effects of Drugs on the Cardiovascular System, Centre of Drug-Dietary Supplements Interactions and Nutrigenetics), Clinical Pharmaceutics and Pharmacoepidemiology. For firms and research organisations, the Faculty carries out contract research and development, for example, of new drugs and drug forms. It has applied for several patents in collaboration with firms and research organisations. In its research activities, the Hradec Králové Medical Faculty collaborates with the Faculty of Informatics and Management (e.g. ICT application in industry /clever networks in power engineering/, multi-agent systems) and the relatively young Faculty of Natural Sciences (e.g. Applied Mathematical Physics, Sensors, Human Body Behaviour Scanning (cooperation with LINET, IKEM), Organic and Analytical Chemistry). The Medical Faculty of Charles University in Hradec Králové pursues a wide range of research activities, from basic research to practical research, for example in the area of civilisation diseases affecting the cardiovascular and gastrointestinal systems. The Faculty´s research team comprises several hundred scientific workers and more than 250 doctoral students.

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About Our Company CRYSTALITE BOHEMIA is the largest producer of household utility glass as well as gift glass in the Czech Republic and belongs among the most significant producers within Europe. The company operates two glassworks: in Světlá nad Sázavou and in Květná (municipality Strání). In these two plants it employs around 750 people and generates a yearly turnover of about CZK 850 million. Its products are exported to 52 countries around the world. The company is owned by Mr. Lubor Cerva.

Světlá nad Sázavou In Světlá nad Sázavou, there is a fully automatic glassworks with a smelting capacity of 96 tons of glass per day. Apart from new technology of beverage glass production it features a unique production of gift products – a wide range of vases and bowls of different sizes and mass. These vases and bowls are produced on large presses with unique product specifications: up to 43 cm in size and weighing up to 5.5 kg.

The history of the glassworks began in 1967, when the work began on the construction of a new glass combine. Production began in 1970. In 2008, the glassworks halted production, and was reopened a year later on 1 October 2009 as the limited company Crystalite Bohemia, purchased by the new owner, Mr. Lubor Cerva.

At present the plant only produces and processes new, modern ecologically-clean molten glass known as crystallite, in a special refined consistency under a tried and tested process, which, in terms of its parameters, is equivalent to 24% leaded crystal and, in many ways, surpasses it. This is the reason why the beverage glass resists even the aggressive washing machines in restaurants.

Květná Glassworks in Strání Květná Glassworks, on the other hand, is focused exclusively on traditional handmade production which is uniquely decorated using various methods such as cutting, engraving, etching, panto and guilloche (fine decorative undulated line), icing, dimming, painting, and gilding. Some products from Světlá nad Sázavou are sent to Květná to undergo such decoration.

Květná Glassworks is the longest operating glassworks in the Czech Republic and belongs also among the oldest in Europe. It was founded in 1794 by the duke Lichtenstein who knew that the region is abundant in quality beechwood needed for heating the glassworks kilns. In 1897, the Květná Glassworks started the production of etched glass as the only second glassworks in Europe.

In search of new shapes and models of its products, the glassworks started the cooperation with leading Czech designers (Olgoj Chorchoj, Rony Plesl, Bára Škorpilová) in 2005. By this assortment, the company sought to address new customers and create a new, active sale system. However, the intention failed and brought the company to a crash. It was saved by its current owner, Lubor Cerva, who bought it on January 6, 2011, and made it part of Crystalite Bohemia.

Both plants in Světlá nad Sázavou and Květná operate in absolute symbiosis, they support and complement each other.

CRYSTALITE BOHEMIA s.r.o.

Zámecká 730 582 91 Světlá nad Sázavou Czech Republic

www.crystalite.org

crystalite@crystalite.org Phone: +420 569 477 111 Fax: +420 569 477 591

Doing Business in the C zech Republic VII. Regions

VYSOČINA REGION The Vysočina Region has an advantageous central location not only within the Czech Republic, but also in the whole of Europe. The D1 motorway, the E59 road and the Vysočina railway corridor offer the opportunity to reach important European transport hubs and major cities quickly. The closest airport, Brno Tuřany, can be reached by car from most of the towns in the Region in one to two hours, and the Prague Ruzyně International Airport can be reached in two hours. Vienna International Airport is 2.5 hours away. The territory of the Vysočina Region is administratively divided into five Districts.

The Region is characterised by its rugged terrain, high altitude, and low population density. The Region is attractive because of its comparatively low levels of air pollution and relatively healthy forests. The Vysočina Region also offers many fine opportunities for summer and winter stays, as well as the possibility of visiting a number of valuable historical and cultural monuments. There are three UNESCO monuments in the Vysočina Region. They is the municipal monument reserve of Telč, the Pilgrimage Church of St. John of Nepomuk on Zelená hora near Žďár nad Sázavou, and the Jewish Quarter with Cemetery and Basilica of St. Procopius in Třebíč. Besides urban tourism, the future of tourism in the Region will undoubtedly rest on various forms of tranquil, environmentally-friendly stays.

This is supported by a dense network of tourist trails (approx. 2 900 km), the development of bicycle routes and the gradually emerging agrofarms providing accommodation.

ECONOMIC POTENTIAL Agriculture has traditionally held an important position in the Vysočina Region. Despite the fact that local conditions are below the average (altitude and the sloping nature of the land decrease the land’s production capacity), the Region’s territory is optimal for certain agricultural products and activities, especially for potato growing. The Region produces approximately one-third of the overall crop of potatoes in the CR. Livestock production in the Vysočina Region specialises mostly in cattle and pig farming.

Statistical Data Population

31 June 2015

509 429

Gross wage

1.–2. Q. 2015

CZK 23 261 (approx. EUR 845)

31 August 2015

5.74%

Unemployment

Source: Czech Statistical Office; EUR 1 = CZK 27.533

The Region’s agricultural potential has given rise to the local food industry, especially meat and dairy production. Important enterprises in the Region include well-known dairy producer TPK, spol. s r.o., based in Přibyslav, JEŽEK beer from Jihlava, the Bernard Family Brewery, and Poex Velké Meziříčí, which produces extruded snacks and cereal products and also concerns itself with dried fruit packing.

As regards economic growth, the Region’s most important economic sector is industry. In the past few years, industrial production in the Region has been very dynamic and has favourably influenced the entire regional economy. Much credit for this is due to the intensive development of industrial parks along the D1 motorway (Jihlava, Humpolec, Velké Meziříčí), which was followed by massive direct foreign investment in industrial production in the Region. The most important economic sector in the Vysočina Region is the automotive industry – specifically the manufacture of car components – accounting for 18% of employment in industry. Next in importance, with a 17% share of employment, is the metalworking industry. Engineering and the food industry are sectors with more than a 10% share. The engineering industry in this Region comprises locksmithing, precision engineering, and supplies for the automotive industry. Important enterprises in this area are Bosch Diesel, První brněnská strojírna Velká Bíteš, PBS Třebíč, Agrostroj Pelhřimov, and Humpolecké strojírny. Agrostroj Pelhřimov, with its 2 500 workers, is the largest employer in the Pelhřimov District.

On an area of 60 000 square metres, the factory manufactures components for agricultural and building machines and for lorries and buses.

Motorpal Jihlava is another important engineering enterprise with a similar production programme to Bosch Diesel. Automotive Lighting, the manufacturer of car lighting equipment, started its commercial activities in Jihlava in 1997.

The Vysočina Region has the vastest timber reserves in the Czech Republic, with a well-developed woodworking industry. The most important enterprises in this area are Stora Enso, Kronospan, and Sapeli – the largest and historically the oldest door manufacturer in the Czech Republic.

DDL – Dřevozpracující družstvo (in Lukavec) – is another large firm operating in the timber production and wood processing sector, with a 60-year tradition in sawn wood and wood-based panel manufacture.

The glass industry is a traditional manufacturing branch in the Region, represented by smaller export-oriented firms, such as CRYSTALITE BOHEMIA s.r.o. Another manufacturing firm is Bohemia Machina at Světlá nad Sázavou, the cradle of original Bohemian cut crystal glass.

It is a recognised manufacturer and supplier of high-quality glassmaking machines, to which it has recently added the manufacture of luxury modern-style crystal products under the BOMMA trademark.

INVESTMENT The Region has several industrial zones. One of them, the Jihlava Industrial Park, is situated in the northern part of the town of Jihlava, in the close vicinity of the D1 motorway, linking up with the town’s industrial agglomeration, in which important firms, such as Bosch Diesel, Automotive Lighting and Kronospan, have their manufactur-

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St. Procopius Basilica in Třebíč

area of accounting and finance, construction and development, IT, etc.

In June 2014, a Scientific and Technical Park, named Vysočina, was opened in Jihlava. The building, with 600 square metres of office space and 1 780 square metres of laboratory space, offers its facilities for use in the area of technology, power engineering, energy intensiveness reduction, material engineering, and the use of biomass.

USEFUL CONTACTS: Vysočina Regional Office – www.kr-vysocina.cz Jihlava Municipal Council – www.jihlava.cz Regional Chamber of Commerce – www.hkjihlava.cz Vysočina Regional Development Agency – www.rrav.cz ing facilities. The Žďár nad Sázavou-Jamská Industrial Park lies in the south-eastern outskirts of the town, linked to important road and railway lines. The firms based there include Vamafil spol. s r.o. – technical yarns; Cooper s.r.o. – automotive industry; MteZ s.r.o. – model equipment; Unipres s.r.o. – printing, and Mibilbox s.r.o. – automotive industry. The Bystřice nad Pernštejnem Industrial Park is situated in the south-western outskirts of the town of Bystřice nad Perštejnem (10 000 inhabitants) in the close vicinity of the railway station.

The Pelhřimov District also has a number of industrial parks. Among them, the CTPark Invest in Humpolec has a strategic position beside the D1 motorway between Prague and Brno. One of the important manufacturers sited there is Valeo Compressor Europe, which manufactures compressors for air-conditioning units in passenger cars. An important investor in the Region is the MANN+HUMMEL Group, which owns two companies in Nová Ves, Třebíč Distict: MANN+HUMMEL (CZ) s.r.o. and MANN+HUMMEL Service s.r.o., which together employ more than 1 100 people. In addition, the MANN+HUMMEL shared services centre was awarded the Employer of the Year 2014 prize in the service centres category in the Central and Eastern Europe region. The award was presented to the company at the prestigious CEE Shared Services and Outsourcing Forum in Warsaw, Poland, in 2015. The Jury was especially impressed by the list of financial and non-financial benefits accorded by the company. MANN+HUMMEL employees, for example, have the benefit of attending free language courses, drawing a 13th, 14th, and 15th salary, obtaining a healthcare contribution, additional pension insurance, fidelity bonuses for years worked, sporting benefits and free theatre and cinema tickets. The firm allows for flexible working hours, the possibility of part-time employment and other flexible forms of work, including work from home. MANN+HUMMEL Group concerns itself with the development of filtration systems. It supplies its products and systems for the international automotive and engineering industries. The Czech Shared Services Centre has been providing services for the Group’s other subsidiaries since 2007 in the

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Photo: CzechTourism archives, Libor Sváček, Pavel Vopálka

EDUCATION Two universities (the Polytechnic University in Jihlava /VŠP/ and the West Moravia University in Třebíč) have their seat in the Vysočina Region. In addition, there are several detached workplaces of other universities located there. In the 2014/2015 academic year, there were 1 900 students enrolled in the universities in the Region, who studied in 16 different branches; 1 800 of them were foreign students, who attended courses in 14 different branches at two universities based in the Region: the West Moravia University in Třebíč, o.p.s. (51 students) and the Polytechnic University in Jihlava (1 785 students). Two universities, the Czech University of Life Sciences Prague and the Chemical Technology University Prague, had detached workplaces in the Vysočina Region in the 2014/2015 academic year.

The following universities offer attendance courses of study for the Bachelor’s Degree: Polytechnic University Electrical Engineering and Informatics – branches: Computer Systems, Applied Informatics Economy and Management – branches: Finance and Management, Tourism Healthcare – branches: Midwifery, General Nurse Social Healthcare – branch: Healthcare Social Worker West Moravia University Třebíč, o.p.s.: Sustainable Development of the Region and the Countryside Cultural Historical Studies Applied Information Technology Information Management Public Administration Studies Management and Marketing.

Some detached workplaces of other universities, such as the Czech University of Life Sciences Prague – workplace Czech Agricultural Academy in Humpolec, Horse Breeding (three years), also offer the attendance form of study for the Bachelor’s Degree.

Doing Business in the C zech Republic VII. Regions

SOUTH MORAVIA REGION South Moravia ranks among the regions with a major economic potential. The created gross domestic product of the Region accounts for one-tenth of the Czech Republic’s gross domestic product, its area taking up 9% of the CR territory. The Region’s territory is divided into seven Districts (Blansko, BrnoCity, Brno-Country, Břeclav, Hodonín, Vyškov and Znojmo).

The natural catchment hub of the whole of South Moravia is the Regional Capital of Brno, situated at the confluence of the Svratka and Svitava Rivers. The city with an important regional position, at the junction of motorways in the directions of Prague, Vienna, Bratislava, and Olomouc, is the centre of traditional international exhibitions and trade fairs, which underscore its status as a busy international commercial hub. Two sites in the Region’s territory are included in the UNESCO World Cultural Heritage List. The most significant is the Lednice-Valtice complex as an example of an area of forests, meadows and lakes, splendidly complemented with romantic structures of churches and gazebos, and primarily the Lednice and Valtice Châteaux. The other unique phenomenon is the Modernist architecture of Brno of the period between the two World Wars, represented by the singular Functionalist project of a family villa by the German architect Ludwig Mies van der Rohe, who designed this house at the request of Greta and Fritz Tugendhat couple in 1928. Important areas of the South Moravia Region also include two UNESCO-listed biosphere reserves, namely Lower Moravia and the White Carpathian mountains. The eventful history of the South Moravia Region is documented by the local archaeological sites, châteaux, castle ruins, churches, and synagogues.

ECONOMIC POTENTIAL

Statistical Data

Gross wage Unemployment

INVESTMENT The attractiveness of the South Moravia Region for investment has been a long-term trend. Just as in the years 2010, 2011 and 2012, South Moravia also surpassed other regions in the number of new investment projects last year. In 2014, domestic and foreign investors decided to undertake 19 new projects here. Owing to investment worth CZK 3 489, 78 mil., mediated with the help of the CzechInvest agency, 1 035 employees should find jobs in the south of Moravia. Major investors in the Region include the Honeywell company, which opened its Brno development centre in 2003 and, thanks to its talents and state-of-theart infrastructure, is now working on the current and next generation of products for Honeywell’s Aerospace, Automation and Control Solutions, and Transportation divisions. The Red Hat international firm is engaged in the area of distribution of the Linux operating system and software for cloud computing. It has been present in the Czech Republic since 2004, and the Brno branch focuses on the testing and developVilla Tugendhat in Brno

Given the industrial tradition of Brno and its surroundings, the dominant position in the Region’s economy is held by the manufacturing industry, but trade and consumer goods repairs, and commercial services play a role as well. Agriculture is the traditional sector, especially in the southern districts of the Region.

Population

The most important role in the economy is played by the engineering industry. The centres of the engineering industry are Brno, Blansko, Kuřim, Boskovice, and Břeclav. The electrical engineering industry has a tradition of more than 100 years in the Region, and is now developing in new industrial agglomerations on the outskirts of Brno, Blansko, Vyškov, etc. The food industry is based mainly in the south and east of the Region, in Znojmo, Břeclav, and Mikulov, where large agrarian enterprises linked to the local farm production are situated, such as fruit and vegetable canning companies. The northern and eastern parts of the Region are well-known for firms processing meat and manufacturing meat products and other foods from grain. There are four large breweries in the Region (Brno-Starobrno, Černá Hora, Vyškov, and Znojmo-Hostan) and numerous wine producers (Znojmo, Valtice, Čejkovice, Velké Pavlovice). The chemical and pharmaceutical industries in the Region are concentrated mainly in Brno and on the lower reaches of the Morava River, e.g. in Hodonín.

31 June 2015

1 173 394

1.–2. Q. 2015

CZK 24 954 (approx. EUR 906)

31 August 2015

6.86%

Source: Czech Statistical Office; EUR 1 = CZK 27.533

Austerlitz

USEFUL CONTACTS: South Moravia Regional Development Agency – www.rrajm.cz Brno Regional Chamber of Commerce – www.ohkbrno.cz South Moravia Innovation Centre – www.jic.cz South Moravia Regional Office – www.kr-jihomoravsky.cz Veletrhy Brno, a.s. – www.bvv.cz Brno Business and Innovation Centre – www.bicbrno.cz Technology Park Brno – www.technologypark.cz Brno University of Technology – www.vutbr.cz Representation of the South Moravia Region to EU – southern-moravia.eu/ South Moravia Tourist Authority – www.jizni-morava.cz/

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by the company Aeskulab (1 600 sq. m) in CTOffice, Tarifomat (1 500 sq. m) in Titanium building, and GE Money Leasing (1 050 sq. m) in Spilberk Tower I. The highest rentals in Brno in the first half of 2015 remained stable, standing at the level of 12.50 EUR/sqm/month.

EDUCATION The above-average educational level of the Region’s population is also due to the quality system of tertiary education. The necessary education is provided to students by both public and private schools in Brno, Znojmo, and Lednice, and the importance of the University of Defence in Brno should be mentioned as well. In 2014, the Brno University of Technology (VUT) marked 115 years of its existence.

It has about 24 000 students who are enrolled at the Faculties of Mechanical Engineering, Chemistry, Civil Engineering, and Information Technology.

VUT Brno places high on a long-term basis on the ranking list of the world’s best universities prepared each year

by QS Qacqarelli Symonds Limited.

In 2015,VUT did especially well in the category Engineering – Civil and Structural, in which it placed 101st – 150th in competition with all the other rated universities worldwide. The Technical University in Brno was one of the two Czech universities which were the first in the Czech Republic to obtain the prestigious certificates of the Eurpean Commission, the ECTS Label and DS Label for the period 2009-2013. After the lapse of this period, the validity of the certificates was prolonged until 2013–2016.

One of the latest achievements of VUT Brno students is the award of a Gold Medal at the International Engineering Fair in Brno. Their unique RUDA robot from the laboratories of the Faculty of Information Technologies won in the category Automation, Measuring, and Control Technology, Sensorics and Robotics. Its main task is searching for people in landslides and avalanches.

Its bio radar can find a living person as low as twenty metres below the surface.

Currently scientists have limited the depth to five metres, because salvaging from greater depths is very demanding.

Masaryk University has been the most popular university in the Czech Republic for several years now. Currently it consists of nine faculties with over 200 departments, institutes and clinics, and provides education to about 40 000 students in regular programmes.

Photo: CzechTourism archives, Libor Sváček

ment of software. At the end of 2012, Red Hat had 500 employees in Brno, which made this office the company’s largest global centre after its headquarters.

Let us mention in detail the Ceitec Science Park, a centre of scientific excellence in Life Sciences and Advanced Materials and Technologies, with its main purpose of building a major European scientific and educational centre with top-class facilities and conditions for the best scientific staffing. CEITEC is the result of collaboration between six Brno universities and research institutes: Masaryk University, Brno University of Technology (VUT), Mendel University in Brno, Brno University of Veterinary and Pharmaceutical Sciences, Veterinary Research Institute, and the Czech Academy of Sciences Institute of Physics of Materials. For example, last year CEITEC VUT participated in the UnivSEM project. It succeeded in competition with almost 30 applicants to the European Commission to acquire funding for its project for the development of a new type of electron microscope with a wide spectrum of use. The project is led by Tescan a.s., a Czech company producing electron microscopes. The UnivSEM project enables business companies engaged in the development and sale of analytical instruments and scientific research institutes to cooperate. Their common goal is to develop a unique electron microscope, allowing numerous structural, atomic and molecular analyses to be performed simultaneously.

The total office space available in Brno is 482 900 sq. metres, 80% of which are modern “A” category buildings. No office building was completed in Brno in the first half of 2015, but 38 800 sq. m of office space is under construction. The offices will be located in four projects: Building O (15 200 sq. m) and P (15 000 sq. m) in the Slatina compound, Project Dorn (7 100 sq. m.) and Smetanova Polyfunctional House (1 500 sq. m), to be completed in 2015. The completion of the remaining projects is planned for 2016/2017. The greatest transaction in the first half of 2015 was the renegotiation of a contract with the company IBM (12 950 sq. m) in the Brno Technological Park, followed by new rentals

Doing Business in the C zech Republic VII. Regions

OLOMOUC REGION The Olomouc Region stretches along the River Morava. The Region itself consists of five Districts: Jeseník, Olomouc, Prostějov, Přerov, and Šumperk. The Region’s administrative centre is the city of Olomouc situated 275 km from the capital, Prague. The Olomouc Region has a rich cultural tradition and is an important tourist centre with a large number of historical sites and unique natural features.

The Region is known for its attractive countryside with a large number of historical sights. One of the most popular places in 2014 was the ZOO on Svatý kopeček Hill, which was visited by nearly 357 000 people. The ten most visited places and attractions in the Region included Flora Olomouc Exhibition Grounds, the Aquapark and the National History and Geography Museum in Olomouc, Bouzov Castle, the Modern Arts Museum Olomouc, Helfštýn Castle, the Archdiocesan Museum Olomouc, Šternberk Castle and the Hand Paper Mill and Paper Museum at Velké Losiny.

Most visited by tourists is the regional city of Olomouc, with the second most valuable historical city reserve in the country, comprising a vast compound of historical buildings and architectural monuments situated on the well-preserved grounds of the medieval city.

Christmas in Olomouc

ECONOMIC POTENTIAL The Olomouc Region has a favourable environment for doing business, based on a strong industrial tradition, with a large number of different sectors represented and a good supply of skilled labour. All of these create good conditions for the development of various types of business activities. The Olomouc Region has a predominantly industrial character. The highest employment rate is shown in the tertiary sector and industry. The most strongly represented sectors in the Region are engineering and the electronics industry, which has been growing rapidly in recent years. The food industry, too, holds an important position in the Region, which is known for its advanced farming. The textile and clothing industry is also doing well, maintaining its long tradition. From the economic point of view, the Olomouc Region is an industrial area with well-developed services. The economy of the Haná area is very stable and diversified, while the Jeseník District and the northern part of the District of Šumperk are among the economically weaker regions due to their geographical position, inadequate transport availability, and the aftermath of post-war events (displacement of the German population).

Doing well in the Region is congress tourism. Last year, more than 84 000 people attended conferences and seminars in the Region.

The most popular place for such get-togethers is the regional city of Olomouc. Another important sector in the Olomouc Region is balneology, with a five-per cent increase in the number of guests visiting the Region’s spas. An important indicator for spa tourism is the number of nights the guests spend in the watering places. In 2014, the number increased by nearly 10%, following a decline in 2013.

INVESTMENT

Statistical Data Population Gross wage Unemployment

31 June 2015

635 037

1.–2. Q. 2015

CZK 22 627 (approx. EUR 822)

31 August 2015

6.76%

Source: Czech Statistical Office; EUR 1 = CZK 27.533

The Olomouc Region offers potential investors a number of industrial parks, as well as modern office space. The Olomouc-Hněvotín Technological Park offers investors 950 000 square metres (95 ha) of development surfaces, designed for the location of investment projects mainly in the area of pure innovative technologies, the manufacturing industry and light production, strategic services, shared services, administration, warehousing and storage surfaces. The Science and Technology Park of Palacký University in Olomouc has been renting offices and manufacturing spaces and providing consulting services since 2000, making it possible for its clients to use the instruments and know-how of Palacký University under advantageous conditions. The large industrial park in Hranice near Přerov, where LG. Philips Display used to manufacture its conventional television screens, now houses a number of firms, such as Etimex, Henniges Automotive, Medi-Globe, DAS, and Rolled Alloys. Other industrial parks in the Region open to investors and businessmen can be found, among others, in the towns of Šumperk, Jeseník, Šternberk, and Zábřeh. An advantage of these localities is the possibility of having the space adjusted to the specific needs of investors. One of the parks, named Šlechtitelů, which is already serving its clients, is situated on the southern outskirts of Olomouc.

A new industrial park will open on the grounds of the former Bochoř airport near Přerov. The decision on the final shape of the park will be made by the government before the end of 2015. The first phase of preparations for a park to cover an area of nearly 400 hectares, with all the necessary technical attributes, including good transport access for investors, has already started.

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Pilgrimage Church of the Virgin Mary

There are good conditions for the development of services in the centre of the Region, where new strategic centres (BSS centres) are coming into being. This is made possible primarily owing to the good supply of skilled workers with a knowledge of foreign languages and practice in the area of finance, accounting, economics, and IT. Most of the companies are based in Olomouc, a university town, with a population well versed in foreign languages and with new Type A office spaces.

Ongoing new office space projects are being realised: the multifunctional CPI City Centre Olomouc, BEA Business Centre Olomouc, NOVÁ ENVELOPA Olomouc administration compound, LAFAYETTE OFFICES Olomouc. Projects currently under preparation include the OFFICE PARK ŠANTOVKA and the Silo Tower Olomouc, an interesting structure that will transform a former silo into modern offices.

The Region’s innovative potential is augmented by the activities of clusters, groups of firms with similar interests. Four clusters are currently operating in the Region with the support of the local authorities: the Olomouc Cluster of Innovations, the Czech Nanotechnology Cluster, the MoravianSilesian Wood Cluster, and, since 2009, the MedChemBio Cluster.

To help raise competitiveness, support innovation, and stimulate demand for the results of scientific and research work and their commercialisation, an institution – the Science and Technology Park – has been established at the Palacký University in Olomouc (VTP UP). Part of the Park is the Technology Transfer Centre, whose task it is to promote the commercialisation of the University’s scientific research and to provide patent services. Another workplace is the Technological Centre with laboratories of the Applied Research Centre. There are several projects in the Olomouc Region, whose task it is to support scientific research in the Region, such as BIOMEDREG – Biomedicine for regional development and human resources (the project concerns itself with the biomedical research of tumours and infectious diseases). On the basis of the research results, the Centre develops new medications and outlines individual therapy for patients (more at www.biomedreg.eu). One of the tasks of the Haná Regional Centre for Biotechnological and Agricultural Research is to transfer advanced plant biotechnologies to enterprises in the Region.

As part of this vast project, new facilities destined for scientific research

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will be built on a surface area of more than 7 000 square metres. More information can be found at www.cr-hana.eu or RCPTM – Regional Advanced Technology and Materials Centre (supports the start-up of new firms using sophisticated technologies and applied physical, optical and chemical research with special regard to nanotechnologies).

EDUCATION Thanks to the university tradition of the city of Olomouc and the large number of educational institutions there, the Region has a good supply of skilled labour. In addition, the number of university graduates is growing steadily, thus creating a great potential for the future. There are three universities in the Region: Palacký University in Olomouc, the oldest university in Moravia and the second oldest in the whole of the Czech Republic, the Moravian University College Olomouc specialising in studies in Economics, and the University of Logistics in Přerov.

Several universities in other parts of the country have their branches in the Olomouc Region. Palacký University in Olomouc plays an important role in the Olomouc Region, where it is one of the largest employers. The University is very popular with young people wishing to obtain higher education. Nearly 24 000 students are enrolled in its eight faculties, which offer a wide range of courses from Natural Sciences and Medical Studies to Humanities, Social Sciences, Physical Culture, and Law. In addition, it provides learning opportunities to children and seniors in its Children’s University and Third-Age University courses.

Photo: CzechTourism archives, Jaroslav Mareš

USEFUL CONTACTS: Olomouc Regional Office – www.kr-olomoucky.cz Olomouc land price maps and other information for businessmen, including information about industrial parks – www.olomoucko.cz Science and Technology Park, Palacký University, including information about the Business Incubator – www.vtpup.cz Czech Nanotechnology Cluster – www.nanoklastr.cz

Radiant panels ECOSUN

Radiant film ECOFILM

MR and GR PANELS

Radiant floor ECOFLOOR

address: Slezská 2, CZ-790 01 Jeseník, Czech Republic foreign sales department phone: +420 584 495 302; fax: +420 584 495 303 fenix@fenixgroup.cz

Only The Sun Does It Better

www.fenixgroup.eu

ZLÍN REGION The Zlín Region, with its long industrial tradition, is linked with the name of Tomáš Baťa, a businessman, who in the first half of the 20th century turned Zlín into a shoemaking empire. Still today, the Zlín Region is one of the most industrialised parts of the Czech Republic, at the same time boasting a healthy environment, a good prerequisite for the development of tourism.

ECONOMIC POTENTIAL The Zlín Region has always been looked upon as an economically strong area with a high concentration of industrial enterprises. The emergence and development of a large part of the industrial manufacturing plants are linked with the name of Tomáš Baťa. In the past, the main manufacturing sector was the footwear industry, with other allied sectors, such as the rubber industry and engineering developing in parallel with it. The Region is also known for its aircraft industry and allied branches. These activities were traditionally primarily linked with Zlín, the centre of the Region, and its hinterland. In the course of time, other strong economic centres emerged in the Region, such as Vsetín,

USEFUL CONTACTS: Zlín Region – www.kr-zlinsky.cz City of Zlín – www.zlin.eu Regional Chamber of Commerce of the Zlín Region – www.khkzlin.cz Catalogue of companies in the Zlín Region – www.zlinregioncompanies.com Technology Innovation Centre Ltd. – www.ticzlin.cz/en Tomáš Baťa University in Zlín – www.utb.cz Holešov Strategic Industrial Zone – www.zonaholesov.cz

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Statistical Data Population

31 June 2015

584 792

Gross wage

1.–2. Q. 2015

CZK 22 480 (approx. EUR 816)

31 August 2015

5.87%

Unemployment

Source: Czech Statistical Office; EUR 1 = CZK 27.533

Uherské Hradiště, Kroměříž, Rožnov pod Radhoštěm, and Uherský Brod.

The current industrial potential of the Region is based on the existence of the original key manufacturing enterprises and foreign investors in industry.

The most important among these are suppliers for the automotive industry. e.g. rubber manufacturing companies (producing mainly car tyres), plastics companies (producing plastics and composite parts of vehicles), machinery, industrial forging and chemical companies (producing specialised parts for the safety of passengers). Another important branch is the aircraft industry, represented by prominent Czech aircraft manufacturers and their suppliers, companies focused on electronics (R&D and production of semiconductors, photovoltaic systems, and intelligent control systems), precision machinery (vertical and horizontal machining centres, special tooling for machine production), electrical and mechanical engineering (generators, motors and their components), production of weapons, initiation systems for blasting operations, as well as furniture manufacture. In the past few years, intensive development has been witnessed by the ICT sector, mainly in the field of safety (development of anti-terrorist safety systems, electronic transaction technologies, and road traffic technologies).

The Zlín Region offers skilled and flexible labour at very reasonable wage costs.

The economic activity rate is 58.4% and GDP per capita (in PPS- purchasing power standards) in the Zlín Region reaches 69.8% of the EU-28 average, with the Region holding 7th position among the 14 Czech Republic regions.

Photo: CzechTourism archives, Vladimír Kubík

The Zlín Region is situated in the eastern part of the Czech Republic, stretching along the border with the Slovak Republic. Even though it is one of the Czech Republic’s three smallest regions (with a surface area of 3 964 sq. km.), it is quite unique among other Czech regions with its charming diversity of landscape, folklore, historical and technical sights. No other tourist area can simultaneously offer visitors mountains, garden architecture, spas with healing mineral springs, vineyards, remnants of the Great Moravian Empire, numerous monuments and historically valuable buildings, and unique modern Functionalist architecture. Its three ethnographic entities – the fertile Haná, hospitable Slovácko, and distinctive Valašsko – add to the originality of the Region. The beautiful Podzámecká and Květná Gardens and the Archbishopric Château in Kroměříž are world renowned, being on the UNESCO List of World Cultural Heritage Sites.

The statutory City of Zlín is the natural industrial, business, and cultural centre of the whole of South-East Moravia. As a Garden City set harmoniously in a natural environment, it is a unique example of Functionalist and 20th-century urban architecture, the heritage of Tomáš Baťa. The city is linked with the existence of film studios, whose importance was enhanced by the success of animated films produced here in the latter half of the 20th century. Each year, the city is the venue for the International Festival of Films for Children and Youth and the Barum Czech Rally motoring competition. An important aspect of Zlín are its cultural and educational endeavours. The materialisation of these endeavours are the Cultural and University Centre, built between 2006 and 2011 to the design of Eva Jiřičná, and the 14|15 Bata Institute – newly reconstructed factory buildings which were opened in 2013 as a new venue for the Regional Art Gallery, Museum of SouthEast Moravia, and Regional Library.

Doing Business in the C zech Republic VII. Regions

Zlín – Bata Houses

INVESTMENT The most important foreign investors in the Zlín Region (according to the number of employees) are the companies of Continental AG from Germany and ON Semiconductor from USA. In addition, there are numerous successful foreign industrially-oriented investors from Germany, Japan, the USA, the Netherlands, Spain, the UK, France, Canada, and other countries. One also finds significant investments in the Zlín Region by local companies, mostly oriented towards R&D and innovation of their products.

Potential investors are able to find suitable plots for their investment projects in a couple of industrial parks or in the database of mapped suitable brownfields in the Zlín Region. The most important development area is the Holešov Strategic Industrial Park, where the construction of infrastructure started in 2008. The chosen area to the south of the town of Holešov fulfils all the conditions for successful projects, positively influencing the future growth of the regional economy as well as that of the whole of the Czech Republic. With its 360 hectares, the Holešov Strategic Industrial Park is one of the largest prepared development areas in the Czech Republic. Investors can choose plots ranging from 0.5 to 100 hectares in size and may take advantage of perfect access to the Czech and European highway

networks. There are a few public airports, including international ones, in close proximity to Holešov as well. The area has all the necessary technical infrastructure, with the backbone transport communications of the Industrial Park being connected with the regional transport network. The area is flat, with good conditions for the establishment of basic structures.

The competitive advantage of this locality is the industrial tradition of the Region and the Progress Technology Park situated in the heart of the area. This Technology Park significantly broadens the possibilities for investors, mainly those innovation-oriented or start-up companies for which the purchase of a plot and the construction of premises could be a distinctive barrier to starting a new business. Such companies may find their new address as well as the required services in the Technology Park.

EDUCATION As the majority of the population in the Zlín Region is employed in industry, the proportion of qualified secondary educated people in the population in the Region reaches 70.32%. The Region offers a network of technically-oriented secondary and vocational schools, collaborating with regional companies. The proportion of the population with tertiary (university) education is 13.59%, with a slight increase annually. The important institution which significantly contributes to this number is the local Tomas Bata University in Zlín. With about 10 300 students, the University ranks among the medium-sized Czech universities. The Tomas Bata University has six faculties – the Faculty of Technology, Faculty of Management and Economics, Faculty of Multimedia Communications, Faculty of Applied Informatics, Faculty of Humanities, and Faculty of Logistics and Crisis Management. The University is a member of a number of international organisations. In addition, it is one of the most prominent centres of research in the Czech Republic and, in many respects, also abroad. An excellent reputation for research by the University has mainly been acquired with outputs in the area of Polymer Engineering, Chemistry and Automation, and Technology Process Control. The University continues to strengthen its position in applied research with the development of new units where excellent research is concentrated (Centre of Polymer Systems and Centre for Security, Information, and Advanced Technologies – CEBIA TECH).

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CUSTOMISED MASS SERIES

METAL MANUFACTURING

member of INDUSTRIAL SYNERGY group

KOVONA SYSTEM, a.s.

Průmyslová 2007 737 01 Český Těšín Czech Republic

www.kovona.cz

We have a long history in the area of metal manufacturing We offer: design, development, testing and manufacture of metal products completed with plastic or wooden parts, assembly, packing, and delivery

Doing Business in the C zech Republic VII. Regions

MORAVIA-SILESIA REGION The Moravia-Silesia Region has a very diverse geography. It is located in the north-east of the Czech Republic, forming one of the remotest areas of the country. Prague is approximately 300 km distant as the crow flies.

Expressed in transport time, this distance is one hour by plane, three hours by train, and four hours by car.

The Region’s border characteristics provide opportunities for efficient cooperation in the manufacturing sector, infrastructural development, cultural and educational activities, and especially in the area of tourism. For this purpose, four Euroregions are currently active in the Region – Praděd, Beskydy, Silesia, and Cieszyn Silesia. The Region has an area of 5 427 sq. km and consists of six former Districts (from the West: Bruntál, Opava, Nový Jičín, Ostrava-Town, Karviná, and Frýdek-Místek). The regional city of Ostrava is considered the Region’s commercial and cultural centre. It has large shopping and exhibition centres, luxury hotels, pleasant cafés and theatres. The tourist trade also benefits from the extensive network of bicycle tracks through the interesting surroundings.

The Region’s traditional cultural centres are Ostrava, Opava, and the Těšín district with the important Polish minority in Český Těšín. The internationally renowned Janáček Philharmonic Orchestra is based in Ostrava. The Region is characterised by its conditions for industrial tourism (Technical Museum Tatra in Kopřivnice, Museum of Wagonmaking in Studénka, Museum of Mining in Ostrava-Petřkovice, Dolní Vítkovice, National Cultural Heritage Site Michal Coal Mine). The Region’s spa industry is

Photo: CzechTourism archives, Lenka Jamnická

Ostrava – Dolní Vítkovice

based on utilising the curative effects of the iodine-bromine water in the Darkov Spa and Rehabilitation Centre. A new spa sanatorium with architecturally interesting buildings has been operating in Klimkovice since the beginning of the 1990s. Watersports fans enjoy boating down the Moravice and Odra Rivers, and those who prefer recreation on the water’s edge visit the Žermanice and Těrlicko dams, or, less frequently, the dam in Slezská Harta. There are golf courses of various levels of difficulty in the Moravia-Silesia Region, starting with courses featuring short holes all the way to courses where championship tournaments are played.

Whatever the course, you will always be playing in beautiful natural surroundings with the magical backdrops of the Beskydy Mountains or historical castles. The courses at Čeladná, Ostravice, Šilheřovice, Kravaře, and Ropice have won the favour of many local and foreign players.

ECONOMIC POTENTIAL The Region has been one of the most important industrial regions in central Europe since the 19th century. However, the orientation of its economic activities – the industrial structure – causes considerable problems in the restructuring of this Region and in attempts at dealing with social problems, especially with those related to the unemployment rate. The natural environment has improved significantly since the beginning of the 1990s, thanks to the decrease in industrial production, the use of technologies friendlier to the environment and significant investments in environmental measures.

More than a half of the Region’s area is occupied by agricultural land, and another part of over 35% is taken up by forests (especially in the mountainous areas of the Jeseníky and Beskydy). Besides natural wonders, the Region has rich deposits of raw materials – mainly a crucial domestic deposit of hard coal – and deposits of natural gas, as well as other raw materials, such as limestone, granite, marble, slate, gypsum, sandy gravels, sands, and brick clays.

The most important industrial sectors in the Moravia-Silesia Region are organised in clusters, which provide the Region with a new profile

and significantly simplify investor access to individual sub-suppliers.

The Region is the leader in the Czech Republic in this regard. Let us mention, for example, the IT Cluster, which was one of the first clusters in the Czech Republic. Other important clusters include the MoravianSilesian Automotive Cluster, which supports innovations and export capabilities of firms in the automotive industry, the Moravian-Silesian Machinery Cluster, which associates engineering firms and firms oriented towards engineering-related activities and services for engineering, and the Moravian-Silesian Wood Cluster.

INVESTMENT The Moravia-Silesia Region has a number of industrial parks. Two of the most successful industrial parks are the industrial park in KarvináNové Pole and in Kopřivnice, which together host the greatest number of investors. These locations also have the look of prosperous industrial parks. Another important industrial park is in Ostrava-Hrabová. The location of Krnov-Červený Dvůr, which had to be expanded because of keen demand, is also at full capacity, similarly to Karviná. There are also other successful projects, such as Bolatice, which are mostly occupied by smaller business entities.

The largest project, which was tied to the interest of a strategic investor operating in the automotive industry, was the preparation of a strategic industrial park at Nošovice. The surface area of the Park, limited by the zoning plan, is 260 ha. The Industrial Park was prepared for the investment project of the Hyundai motor company. The investors in the Industrial Park are Hyundai Motor Manufacturing Czech s.r.o., Logistics Park Nošovice a.s., Mobis Automotive Czech, HYSCO CZECH, s.r.o., Hyundai Dymos Czech, s.r.o., and Glovis Czech Republic s.r.o.

The Ostrava-Mošnov Strategic Industrial Park is another unique investment opportunity for investors. Its advantage is not only its strategic position in the vicinity of the Ostrava international airport, but also easy access to the trunk road and railway systems. The surface area of the Industrial Park is 200 ha.

In 2014, Ostrava Hrabová Industrial Park celebrates its 10th anniversary. There are more than 50 companies in the Park, employing about 7 000 people.

In 2015, The Czech Government approved the award of a subsidy for the construction of the Nad Barborou Industrial Park. It is a bownfield in the location of a former coal mine between the towns of Havířov, Karviná, and Orlová. On completion, the industrial park will be covering an area of 88 ha.

Currently the Nad Barborou Industrial Park is the most important locality being transformed in the Moravia-Silesia Region, but it is not the only investment project there. The Ministry of Industry and Trade supports the development of more industrial areas in the Region, for example the project “Enlargement of the Scientific and Technical Park in Ostrava”. Another industrial park to be enlarged is Červený dvůr in Krnov. The past 18 months proved to be a good time for the MoraviaSilesia Region as regards investments. From the beginning of 2014 to mid-2015, CzechInvest Agency, in collaboration with the Ministry of Industry and Trade, attracted 32 investment projects to the Region worth CZK 17.7 billion. When completed, they will create 4 530 new

USEFUL CONTACTS: Moravia-Silesia Regional Authority – www.kr-moravskoslezsky.cz Ostrava City Authority – www.ostrava.cz The Regional Council of the Moravia-Silesia Cohesion Region – www.rr-moravskoslezsko.cz Ostrava Science and Technology Park – www.vtpo.cz Chamber of Commerce of the Moravia-Silesia Region – www.khkmsk.cz

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Statistical Data Population

31 June 2015

1 220 685

Gross wage

1.–2. Q. 2015

CZK 22 524 (approx. EUR 818)

31 August 2015

9.87%

Unemployment

Source: Czech Statistical Office; EUR 1 = CZK 27.533

jobs. The largest projects in the Region include a manufacturing plant of Röchling Automotive Kopřivnice s.r.o., manufacturer of components for the automotive industry, worth CZK 404 billion. Another company to invest massively in the Region is OKIN BPS, which will spend CZK 12 million on its expansion and create 110 new jobs.

The support of investment in the Moravia-Silesia Region is bearing fruit. For example, the Swedish company Mölnlycke Health Care is planning to employ up to three hundred people in its new plant in Havířov in the next few years. Its construction is about to start at the end of 2015. The new manufacturing plant will be built in the location of the former Dukla Coal Mine. Investment in Havířov will amount to nearly CZK 1.6 billion.

Mölnlycke already has one manufacturing plant in the Nové Pole Industrial Park in Karviná, which employs more than 600 people. Another example of the fact that firms which are already settled in the Region are expanding, is the Italian manufacturer of cast wheels for the automotive industry Cromodora Wheels.

This company is planning to increase its output in its manufacturing plant in Mošnov, Nový Jičín District, by nearly 50% by the year 2020. Varroc Lighting Systems, manufacturer of car spotlights, too, is expanding production. Between 2015 and 2019 it is going to invest CZK 1.28 billion in its plants in Šenov near Nový Jičín and Rychvald in the Karviná District. Tieto Czech, the largest IT company in Ostrava, took on nearly 250 new workers in 2014 and it now employs more than 2 000 IT specialists.

EDUCATION The Region prides itself on its very good educational opportunities. There are five universities in the Moravia-Silesia Region, with 16 faculties (Mining University – Technical University Ostrava, Ostrava University, Silesian University in Opava, Ostrava Business School and the Social-Administrative College, Institute of Lifelong Learning in Havířov). The enrolment is more than 38 000 students.

USEFUL ADDRESSES AND INFORMATION

MINISTRY OF FOREIGN AFFAIRS

MINISTRY OF INDUSTRY AND TRADE

The Ministry of Foreign Affairs is a central body of the state administration of the Czech Republic responsible for formulating foreign policy and protecting the rights and interests of the Czech Republic and its citizens abroad. Its competence is defined in § 6 of Act No. 2/1969 Coll.

The Ministry of Foreign Affairs also operates diplomatic missions of the Czech Republic abroad, including embassies, consulates, and delegations to international organisations. Mainly through this network the Czech Republic promotes its economic and commercial interests abroad and enhances the general awareness of the production and investment potential of the Czech economy.

The Ministry of Industry and Trade is the central body of state administration for the economic and commercial policy, the affairs of small and medium-sized enterprises and trades, the energy and raw material policy of the state, and coordination of the Czech Republic’s foreign trade policy in relation to the different countries and in support of export. Organisations directly managed by the Ministry of Industry and Trade: the Czech Trade Inspection, the Assay Office, the Office for Technical Standardisation, Metrology, and State Quality Control, the State Energy Inspection, the Czech Office for Weapons and Ammunition Testing, the Investment and Business Development Agency CzechInvest, the Czech Trade Promotion Agency CzechTrade, the Czech Metrology Institute, the State Research Institute for Material, the Ministry of Industry and Trade Services Administration.

Ministerstvo zahraničních věcí Loretánské náměstí 5, 118 00 Praha 1 Phone: +420 224 181 111 Fax: +420 224 182 048 E-mail: epodatelna@mzv.cz Detailed information about the Ministry of Foreign Affairs of the Czech Republic and its role in economic diplomacy and export-promoting activities is available at the following website: www.mzv.cz

Ministerstvo průmyslu a obchodu Na Františku 32, 110 15 Praha 1 Phone: +420 224 851 111 Fax: +420 224 811 089 Politických vězňů 20, 112 49 Praha 1 Phone: +420 224 851 111 Fax: +420 224 221 575 E-mail: posta@mpo.cz More information at: www.mpo.cz

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MINISTRY OF REGIONAL DEVELOPMENT

CZECHTRADE – CZECH TRADE PROMOTION AGENCY

The Ministry of Regional Development is a central government authority of the Czech Republic in the matters of regional and housing policy, development of dwelling and housing stock, letting of flats and nonresidential premises, spatial planning, building rules, expropriation, investment policy, tourism, undertaking.

It plays an important role within the state administration through the extent of its powers, competences and liabilities for the management of financial means.

The Ministry also implements the regional and structural policy of the European Union, the so-called policy of economic and social cohesion. With the assistance of funding, it stimulates the development of weaker regions so that they do not lag behind the European average. These objectives are fulfilled in practice with help from structural funds.

The Ministry of Regional Development also plays the role of the National Coordination Authority (NCO) for the utilisation of financial resources from the European Union (EU) funds. The National Coordination Authority provides a single framework for all operational programmes in the Czech Republic financed from Structural Funds and the Cohesion Fund. The management of the different operational programmes is the sphere of authority of the relevant ministries. Apart from its national coordination role, the Ministry of Regional Development also functions in some programmes as the direct governing body responsible for their successful drawing.

CzechTrade is a trade promotion organisation, founded by the Ministry of Industry and Trade of the Czech Republic. Our main objective is to promote the internationalisation of Czech companies by facilitating their cooperation links with foreign entrepreneurs.

CzechTrade provides a wide range of business support and networking services including: introduction to Czech quality suppliers, assistance with local outsourcing, organisation of the buyer’s visits and meetings with Czech companies, participation in trade fairs abroad, information about doing business in the Czech Republic.

ONLINE SERVICES Czech Business Partner Search Are you seeking a supplier of goods/services or business partner in the Czech Republic? Complete the on-line form. Select your country at homepage (www.czechtradeoffices.com) or visit the website of the CzechTrade office which is the nearest to your country and open the Czech Business Partner Search.

Czech Exporters Directory Czech Exporters Directory is the official online database of Czech exporters and the easiest tool to help you find potential business partners in the Czech Republic.

Directory is available on-line at http://exporters.czechtrade.cz/en.

BusinessInfo.cz/en Ministerstvo pro místní rozvoj Staroměstské náměstí 6, 110 15 Praha 1 Phone: +420 224 861 111 Fax: +420 224 861 333 E-mail: posta@mmr.cz

The government business portal provides a comprehensive source of information for companies that are looking for guidance, assistance and business opportunities in the Czech Republic (www.businessinfo.cz/en).

CzechTrade – Czech Trade Promotion Agency (Central Office) More information at: www.mmr.cz

Dittrichova 21, 128 01 Praha 2 Green line: +420 224 907 820 E-mail: info@czechtrade.cz More information at: www.czechtrade.eu

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BUSINESS AND INVESTMENT DEVELOPMENT AGENCY CZECHINVEST CzechInvest is a state contributory organisation subordinated to the Ministry of Industry and Trade of the Czech Republic. Its main objective is to raise the competitiveness of the Czech economy by supporting small and medium-sized enterprises, the domestic business infrastructure and innovation. It attracts to the Czech Republic foreign investors operating in the manufacturing industry, business support services and technology centres, and supports Czech enterprises in their expansion efforts.

To simplify communication between the state, business and the European Union, CzechInvest acts as an umbrella business-promotion organisation for companies engaged in manufacturing, ICT and business support services, using both EU and national funding.

CzechInvest presents the Czech Republic to other countries as an attractive location for investors and it is the exclusive organisation authorised to submit applications for investment incentives. It also supports Czech companies interested in joining the supply chains of multinational companies. With its services and development programmes, CzechInvest supports the promotion of domestic companies and Czech and foreign investors, as well as the development of the business environment in general.

CZECH EXPORT BANK Czech Export Bank provides export-related financial services. The bank has twenty-year experience in supporting large export transactions conducted by Czech exporters, as well as export contracts for smaller projects and sub-deliveries. Today, the majority of the bank’s products are offered under favourable conditions to foreign buyers – partners of Czech exporters, who thus find Czech goods and services attractive not only in terms of their price and quality.

The bank focuses on offering a comprehensive range of products for the financing of exports. In addition to the financing of exports of goods and services, recently Czech Export Bank has progressed to see its role in the financing of construction works, especially infrastructure projects abroad. Furthermore, the bank offers a range of structured and project financing models.

Czech investors are provided with favourable financing for their plans to build new production capacities abroad or for their plans to invest capital into foreign companies. Czech Export Bank has significantly expanded its services of financing the export-related activities of small- and medium-sized enterprises.

Česká exportní banka, a.s.

Vodičkova 34, 111 21 Praha 1 Phone: +420 222 841 100 Fax: +420 224 226 162 E-mail: ceb@ceb.cz

All of CzechInvest’s services are provided free of charge.

CzechInvest Štěpánská 15, 120 00 Praha 2 Phone: +420 296 342 579 E-mail: info@czechinvest.org More information at: www.czechinvest.org

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More information at: www.ceb.cz

Doing Business in the C zech Republic VIII. Useful Addresses and Information

EXPORT GUARANTEE AND CZECH TOURIST AUTHORITY INSURANCE CORPORATION (EGAP) – CZECHTOURISM The Export Guarantee and Insurance Corporation (EGAP) is a specialised state-owned credit insurance company focused on the insurance of territorial and non-marketable commercial risks connected with exports of goods, services, and investments from the Czech Republic. It insures export credits, pre-export credits, investments abroad and credits for their financing, manufacturing risks, and bonds issued by banks, and thus covers a broad range of risks which exporters encounter in the preparation and realisation of export contracts. The corporation provides services to all Czech exporters and investors abroad irrespective of their size, legal form, volume of export, and the extent of the investment. EGAP activities play the role of Export Credit Agency (ECA), which is guided by OECD and EU rules that restrict state support for exports only to products and territories in which commercial entities do not operate, i.e. primarily to medium- and long-term export credits and to risk-involving territories. These rules ensure that exporters from the different countries do not compete due to the extent of state support, but exclusively in the quality and prices of goods and services.

Exportní garanční a pojišťovací společnost, a.s.

Vodičkova 34/701, 111 21 Praha 1 Phone: +420 222 841 111 Fax: +420 222 844 100 E-mail: info@egap.cz More information at: www.egap.cz

The Czech Tourist Authority – CzechTourism promotes the Czech Republic both at home and abroad as an attractive tourist destination. The agency works with a number of partners, including representatives of regional institutions, tourist regions, destination management organisations, cities, municipalities, and the business community. All of its activities aim to stimulate interest in the Czech Republic’s uniqueness, while inspiring foreigners to visit. CzechTourism objectives are to continuously increase number of incoming tourists and systematically encourage and develop domestic tourism.

This year, all of CzechTourism marketing activities support a communication strategy that presents the Czech Republic as a land of stories –a land where travellers not only discover existing stories, but also experience, create, live, and share their own. To achieve successful results, CzechTourism uses a network of foreign representative offices, actively cooperates with the media, and appeals to partners from the travel trade sector at trade fairs. The agency organises study tours to the Czech Republic for media representatives and tour operators.

It systematically channels news, trends, and analyses from the tourism sector to the domestic tourism trade and media. In order to draw attention to and promote the Central European region on distant markets, CzechTourism is an active member of the V4 countries tourism group (the Visegrád Four: Czech Republic, Slovakia, Poland, Hungary).

CzechTourism is a state-funded organisation of the Ministry of Regional Development.

CzechTourism Vinohradská 46, P.O.BOX 32, 120 41 Praha 2 Phone: +420 221 580 111 E-mail: info@czechtourism.cz More information at: www.czechtourism.com

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INTERNATIONAL CHAMBER OF COMMERCE/ICC

CONFEDERATION OF INDUSTRY OF THE CZECH REPUBLIC

ICC is – and has been throughout its long existence – a steadfast rallying point for those who believe, like our founders, that strengthening commercial ties among nations is not only good for business but good for global living standards and good for peace. ICC was founded in 1919 in Paris. Today, ICC represents 6.5 million companies and associations in more than 130 countries and transmits their interests to high official representatives including the UN, EU, WTO, OECD and G20, where ICC has been granted the highest-level consultative status.

Is a voluntary, non-political and non-governmental organisation that brings together employers and entrepreneurs in the Czech Republic. It is the largest alliance of employers and represents a predominant part of industry in the Czech Republic. It represents 28 branch or sectoral associations and 134 individual members, altogether more than 10 000 member subjects which employ around 800 000 people.

Prestige Being an ICC member is a question of prestige.

Principles ICC creates rules and principles that are fully respected and used in everyday business and have become one of the most important pillars of international trade.

Partnership ICC provides a large portfolio of services fundamental for foreign trade, such as educational and advisory services, as well as creating opportunities for establishing partnership with foreign business partners.

Territorial workshops Main aim of these workshops is to support the efficiency of Czech economic diplomacy under the presence of Czech ambassadors to introduce trade and investment opportunities to Czech exporters, to help diversify Czech export to perspective markets and to help establish useful business contacts. In the period of 2014/ 2015, these workshops were focused on e.g.: Saudi Arabia, UAE, Japan, Serbia, Kazakhstan, Turkey, South Korea, Mexico, Chile, Slovenia, Israel, Tunisia, Kenya, Egypt, Colombia, Cyprus, Philippines, India, Canada and many others.

Seminars, professional courses Our extensive range of educational programmes is targeted at specific topics associated with conducting international trade. Lecturers include experts and professionals with long-time experience or managers working in the given field – Incoterms 2010, Bank guarantees and experience with URDG 758, Documentary Credits and Standbys – International Standard Banking Practice and Practices in the USA, Terms of international sale contract in foreign trade, ...

International Chamber of Commerce/ICC Freyova 82/27, 190 00 Praha 9 Phone: +420 257 217 744 E-mail: icc@icc-cr.cz More information at: www.icc-cr.cz

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Its mission is to participate in shaping the Czech Republic’s economic and social policy and represent and promote common interests of its members in order to create optimum business environment.

It promotes and defends the interests of its members in the Council for Economic and Social Agreement (Tripartite), which is the platform for negotiations between the government, employers, and trade unions.

It supports the establishment of trade and economic relations between Czech and foreign entities by means of trade missions, conferences, bilateral and multilateral negotiations, and through the participation of its members in trade fairs, exhibitions and professional seminars.

The Confederation is a co-founder of the Czech Business Representation in Brussels (CEBRE) and of the Platform for Foreign Development Cooperation.

As a member of significant European and international organisations of employers and entrepreneurs – BUSINESSEUROPE, BIAC - enhances the position of the Czech businesses.

Svaz průmyslu a dopravy České republiky Freyova 948/11, 190 00 Praha 9 Phone: +420 225 279 111 E-mail: spcr@spcr.cz More information about the Confederation of Industry and about professional associations can be found at: www.spcr.cz

Doing Business in the C zech Republic VIII. Useful Addresses and Information

CZECH NATIONAL BANK The Czech National Bank is the central bank of the Czech Republic and the supervisor of the Czech financial market.

The primary objective of the CNB is to maintain price stability. Achieving and maintaining price stability, i.e. creating a low-inflation environment in the economy, is the central bank’s ongoing contribution to the creation of conditions for sustainable economic growth. Central bank independence is a prerequisite for effective monetary instruments conducive to price stability. In addition, the CNB fosters financial stability and sees to the sound operation of the financial system in the Czech Republic. To this end, the CNB sets macroprudential policy by identifying risks jeopardising the stability of the financial system and contributing to its resilience. Without prejudice to its primary objective, the CNB also supports the general economic policies of the government and the general economic policies in the European Union.

In accordance with its primary objective, the CNB sets monetary policy. It also issues banknotes and coins and manages and oversees the circulation of currency, the payment system, and settlement between banks. It also performs supervision of the banking sector, the capital market, the insurance industry, pension funds, credit unions, electronic money institutions, and bureaux de change. In order to undertake its tasks, the CNB processes and generates statistical information. As a central bank, the CNB provides banking services to the state and the public sector. It maintains the accounts of persons and organisations connected to the state budget. By agreement with the Ministry of Finance pursuant to the budgetary rules, the CNB conducts transactions relating to government bond issues and financial market investments.

CENTRE FOR REGIONAL DEVELOPMENT OF THE CZECH REPUBLIC – ENTERPRISE EUROPE NETWORK Centre for Regional Development of the Czech Republic (the Centre) is the implementing agency for European programmes operating under the auspices of the Ministry for Regional Development of the Czech Republic.

The Centre hosts one of the offices of the Enterprise Europe Network (EEN), a member of Europe’s largest network (with more than 500 partners) set up and run by the European Commission with the purpose of supporting business. Its consortium based in the Czech Republic (CR) is composed of six partners from four cities – Praha, Brno, Plzeň, and Ostrava. The mission of the network is to help especially small and medium-sized enterprises (SME) on entering the EU internal market and doing business there. Its officials provide comprehensive consulting services to businesses with the aim of broadening the international cooperation of companies, raising the innovative potential of enterprises in the EU and helping SMEs to become integrated more widely in EU framework programmes.

To foreign clients, the Centre – EEN offers: information about the Czech Republic, about the business environment in the CR, Czech legislation, about how to find Czech partners for co-operation, information about starting a business in the CR, sources of financing from Structural Funds, and other information.

Centrum pro regionální rozvoj České republiky Česká národní banka Na Příkopě 28, 115 03 Praha 1 Phone: +420 224 411 111 www.cnb.cz/en/public/contacts.html

Vinohradská 1896/46, 120 00 Praha 2 The EEN office: Ve Struhách 27, 160 00 Praha 6 Phone: +420 234 006 232 Fax: +420 234 006 251 E-mail: een@crr.cz

More information at: www.cnb.cz More information on the Centre for Regional Development of the Czech Republic at: www.crr.cz More information about the Enterprise Europe Network in the Czech Republic at: www.een.cz

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CZECH CENTRES The Czech Centres is an agency managed by the Ministry of Foreign Affairs of the Czech Republic and established for the promotion of the Czech Republic throughout the world. The Centres operate as a network in 22 foreign cities on 3 continents and are active members of the European Union National Institutes for Culture, EUNIC. The Centres promote Czech culture on the international level and in all fields. They present the Czech Republic as a modern country with a rich cultural tradition and the ability to develop this wealth. The Centres foster and develop cooperation of foreign cultural institutions, experts and individual artists with Czech entities.

In the area of education, science, research and innovation, the Centres collaborate with universities and professional institutions, support their mutual cooperation and promote the success of Czech science abroad. The Centres support teaching and using the Czech language in the world.

In the area of supporting foreign economic relations, the Centres contribute to develop the Czech Republic’s business interests abroad, both at the corporate and municipal levels. The Centres support creative Czech industries.

In the area of promoting the Czech Republic as an attractive tourist destination, the Centres, in cooperation with their partners, focus on regional presentations abroad.

The Centres provide common information about the Czech Republic for foreign public, media, and international entities.

CZECH CHAMBER OF COMMERCE WHO WE ARE Independent public institution of entrepreneurial

self-governance Largest and most representative business association

in the Czech Republic including small, medium, and large companies, self-employed entrepreneurs, associations, unions, and craftsmen organisations Network – regional (regional and district chambers) and professional (unions, associations, etc.)

Platform for 14 thousand members representing 60% of GDP of the country and 66% of employable population in the Czech Republic in non-compulsory membership scheme Member of European and international organisations

WHAT WE DO Support of International Trade Organisation of business missions targeting particu-

lar territory or sector Support of International Trade Organisation of business missions targeting particu-

lar territory or sector Organisation of business missions accompanying

state and government officials on their visits abroad Organisation of business forums, seminars, round

tables etc. targeting particular country or territory Organisation of bilateral meetings between Czech

entrepreneurs and foreign business delegations Involvement in various European Commission’s

programmes

Česká centra

Support to foreign companies in finding suitable

Václavské nám. 816/49, 110 00 Praha 1 Phone: +420 234 668 211 E-mail: info@czech.cz

Publishing foreign demands, offers or tenders on

business partners in the Czech Republic chamber website Czech Business Representation in Brussels (CEBRE)

More information at: www.czechcentres.cz

Consultancy & advisory services (subsidies, projects,

export & foreign trade, legal issues, etc.)

CZECHPoints (registers, documents, certificates, servic-

es, etc.) over 50 one-stop-shops throughout the country Professional Education – national certification pro-

grammes (recognised occupation), skill competitions, Thematic courses & seminars, etc.

Obligatory commenting point for new business legislation Lobbying at local, national, European & international

level Issuing own monthly magazine KOMORA.cz and

weekly electronic news distributed directly to members

Hospodářská komora České republiky Freyova 27/82, 190 00 Praha 9 Phone: +420 266 721 300 E-mail: foreigndpt@komora.cz More information at: www.komora.cz

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Doing Business in the C zech Republic VIII. Useful Addresses and Information

CONFEDERATION OF EMPLOYERS’ AND ENTREPRENEURS’ ASSOCIATIONS OF THE CZECH REPUBLIC The Confederation of Employers’ and Entrepreneurs’ Associations of the Czech Republic (Konfederace zaměstnavatelských a podnikatelských svazů ČR – KZPS ČR) is an open, independent, special-interest association established according to Act No. 83/90 Coll., on association of citizens: it unites seven representatives of employer unions in the fields of construction industry, textile industry, small and medium-sized businesses, cooperatives, agriculture, mining and oil industry, wood processing industry, education, healthcare, culture and social services; it represents 22 000 bodies with over 1 300 000 employees; it supports the promotion of specific interests of its members in the legislative field and in other areas; it formulates common business and employer interests of its members and promotes them in cooperation with relevant state authorities, other employers’ organisations and trade unions and especially in various forms by consulting the government; it is one of the social partners representing the side of entrepreneurs in the Council of Economic and Social Agreement (Tripartite).

KZPS’s members: Association of Textile, Leather, and Clothing Industry Union of Czech and Moravian Producer Cooperatives Syndicate of Businesspeople and Tradespeople of the Czech Republic Association of Entrepreneurs in Building Industries in the Czech Republic Union of Employers’ Associations of the Czech Republic Employers’ Association of Mining and Oil Industry Agricultural Association of the Czech Republic

Konfederace zaměstnavatelských a podnikatelských svazů ČR Václavské náměstí 21, 113 60 Praha 1 Phone: +420 222 324 985 Fax: +420 224 109 374 E-mail: kzps@kzps.cz More information at: www.kzps.cz (in Czech)

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CENTRAL AND OTHER KEY BODIES OF THE CZECH REPUBLIC SUPREME BODIES Office of the President of the Czech Republic Kancelář prezidenta ČR www.hrad.cz Parliament of the Czech Republic Parlament České republiky Chamber of Deputies Poslanecká sněmovna ČR www.psp.cz Senate of the Parlament of the Czech Republic Senát Parlamentu ČR www.senat.cz Office of the Government of the Czech Republic Úřad vlády ČR www.vlada.cz

Ministry of Foreign Affairs Ministerstvo zahraničních věcí www.mzv.cz Ministry of Industry and Trade Ministerstvo průmyslu a obchodu www.mpo.cz Ministry of Finance Ministerstvo financí www.mfcr.cz Ministry of Transport Ministerstvo dopravy www.mdcr.cz Ministry of Agriculture Ministerstvo zemědělství www.mze.cz

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Ministry of Justice Ministerstvo spravedlnosti www.justice.cz Ministry of Defence Ministerstvo obrany www.army.cz Ministry of the Environment Ministerstvo životního prostředí www.env.cz Ministry of Labour and Social Affairs Ministerstvo práce a sociálních věcí www.mpsv.cz Ministry of Health Ministerstvo zdravotnictví www.mzcr.cz

Ministry of Regional Development Ministerstvo pro místní rozvoj www.mmr.cz

Ministry of Education, Youth, and Sport Ministerstvo školství, mládeže a tělovýchovy www.msmt.cz

Ministry of the Interior Ministerstvo vnitra www.mvcr.cz

Ministry of Culture Ministerstvo kultury www.mkcr.cz

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DIPLOMATIC MISSIONS OF INTERNATIONAL ORGANISATIONS Representation of the European Commission in the Czech Republic e-mail: comm-rep-cz@ec.europa.eu, www.evropska-unie.cz, www. ec.europa.eu/ceskarepublika Organization for Security and Co-operation in Europe Prague Office of the OSCE Secretariat e-mail: quest@osce.org www.osce.org United Nations Information Centre Prague e-mail: unicprg@osn.cz www.osn.cz European Parliament Information Office Prague e-mail: eppraha@europarl.europa.eu www.evropsky-parlament.cz

Photo: CzechTourism archives

MINISTRIES

Doing Business in the C zech Republic VIII. Useful Addresses and Information

THE MOST IMPORTANT WEBSITES General information on the Czech Republic

www.czech.cz

Official site for the CR

BusinessInfo

www.businessinfo.cz

Official site for professionals searching for information, assistance, or business contacts in the CR

Doing Business in the Czech Republic

www.doingbusiness.cz

General information about business climate, structure, and development of the Czech economy

Portal of the Public Administration

www.vlada.cz

The electronic gateway for the public to administration and government services

Company Contact Information ARES

wwwinfo.mfcr.cz/ares/ares.html

Access to Registers of Economie Subjects/Entities

Business Register

www.justice.cz/

Public directory

Business Register

www.rzp.cz

Trade Licensing Register

European Databank

www.edb.cz

Information operator

Czech exporting companies

http://exporters.czechtrade.cz/en

Czech Exporters Directory

Yellow Pages/Zlaté stránky

www.zlatestranky.cz

Telephone and companies directory

Iuridika

http://iuridica.eunet.cz

Directory of legal services and official bodies

Portal of Czech judiciary

www.justice.cz

Course of legal proceedings

Legislation

Finance Czech National Bank

www.cnb.cz

Monetary, financial, and macroeconomic data

Prague Stock Exchange

www.pse.cz

Prague Stock Exchange data

RM-System

www.rmsystem.cz

RM-System Czech Stock Exchange

Czech Insurance Association

www.cap.cz

Directory of insurance companies operating in the CR

Register of Excise Duty Payers

http://adisreg.mfcr.cz/cgi-bin/adis/idph/ Directory of taxpayers registered under individual int_dp_prij.cgi?ZPRAC=FDPHI1&poc_ tax identification numbers (DIČ) dic=2

Chamber of Tax Advisers of the CR

www.kdpcr.cz

Database of tax advisers

www.czso.cz

Official statistical data and information covering different subjects

BVV – Brněnské veletrhy a výstavy/Trade Fairs Brno

www.bvv.cz

List of exhibitions in Brno and relevant information

Association of Fair and Exhibition Organizers of the CR

www.czechfairs.cz

Exhibition centres and companies organising trade fairs in the CR and abroad

www.upv.cz

Patents, trade marks, utility models, and industrial designs

Statistics Czech Statistical Office Fairs and Exhibitions

Miscellaneous The Industrial Property Office Česká pošta (the Czech Post)

www.ceskaposta.cz

Incl. postcodes of municipalities and its districts (PSC), philately etc.

Residence of Foreigners in the CR

www.domavcr.cz

Advice for living in the CR

Business and Investment Development Agency

www.czechinvest.org

Support for entry of foreign investors

Association for Foreign Investment

www.afi.cz

Support for entry of foreign investors

Cadastre of Real Estate

www.cuzk.cz

Information system, contains data on real estate in the CR

Road toll in the CR

www.premid.cz

Information on toll and charges

Portal of the Regional Information Service

www.risy.cz

Information website on the regions

The Czech Association of Hotels and Restaurants

www.ahrcr.cz

Directory of hotels in the CR

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LIST OF ADVERTISERS ARAKO spol. s r.o.

28

AŽD Praha s.r.o.

23

CRYSTALITE BOHEMIA s.r.o.

Czech Aerosol, a.s.

32

Česká exportní banka, a.s.

60

Český porcelán, akciová společnost

99

Doosan Škoda Power s.r.o.

70

EGÚ Brno, a.s.

131

FENIX Trading, s. r. o.

113

KORAN, spol. s r.o.

92

KOVONA SYSTEM, a.s.

116

KOVOSREAL s.r.o.

24

Letiště Praha, a. s.

10

LIEBEZEIT HYDRAULIK, s.r.o.

27

Lobby Česká republika, s.r.o.

74

M a v e l, a.s.

20

NAREX Ždánice, spol. s r.o.

16

Řetězárna a.s.

79

SKLÁRNY MORAVIA, akciová společnost

59

TOS VARNSDORF a.s.

130

106

2

UNIVERSITY OF FINANCE AND ADMINISTRATION

65

WORLD SPORT HOLDING, SE

82

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Photo: CzechTourism archives, Ladislav Renner, Vladimír Kubík, Jan Strakoš

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