CzechInvest
Investment and business development agency Investment climate in the Czech Republic
Reasons to invest
Connect & Support
October 28, 2016 www.czechinvest.org 2
I. CzechInvest – core services
Connect & Support 3 CzechInvest Investment and business development agency
Business and Investment Development Agency CzechInvest, is an agency of the Ministry of Industry and Trade. Established in 1992, the agency contributes to attracting foreign investment and developing domestic companies through its services and development programs.
• Our Mission • to support foreign direct investment • to develop local companies • to implement business-development programs • to improve the business environment
Source: CzechInvest, 2016
Connect & Support 4 Our services for potential investors
• Business intelligence • Consultancy on available financial support for investment projects (investment incentives) • Identification of green/brownfield sites, production facilities and offices • Identification of potential acquisition, joint-venture and supply partners • Tailor-made visits to the Czech Republic • Liaison with government bodies • Aftercare services
All CzechInvest’s services are free of charge as part
of the Czech government's business support measures Source: CzechInvest, 2016
Connect & Support 5 CzechInvest worldwide
Scandinavia
[email protected] South Korea
seoul@czechinvest.org
USA – East Coast
[email protected] Germany
[email protected] Japan tokyo@czechinvest.org USA – West Coast UK & Ireland
[email protected] london@czechinvest.org China – Shanghai
Source: CzechInvest, 2016
Connect & Support 6
II. Investment climate in the Czech Republic
Connect & Support 7 Czech Republic – heart of Europe
• Area: 78,865 km² • Capital city: Prague • Population (2015): 10.5 million • Labour force: 5.3 million • Language: Czech • Currency: Czech Crown (CZK) • Political system: Parliamentary republic (president) • Administrative division: 8 regions NUTS 2 • 14 regions NUTS 3 • Member of organization: EU, NATO, IMF, WB, WTO, OECD, OSCE
Source: Czech Statistical Office, 2016
Connect & Support 8 Location and infrastructure
• Great geographical location • Great access to both emerging eastern as well as established western markets • Advanced infrastructure – densest railway network in CEE, complementary highways
Source: CzechInvest, 2016
Connect & Support 9 Country overview – key indicators 2015
4.5% 332 EUR GDP growth Minimum wages (per month)
0.3% 3.3% Inflation rate Unemployment rate
Source: Eurostat, 2016
Connect & Support 10 Sectors of the Czech economy
3%
Agriculture 39% Industry Services 58%
Source: Czech Statistical Office, 2016
Connect & Support 11 Investment risk rating Czech Republic - the Island of Stability in Europe
Country Standard & Poor´s Moody´s analytics Fitch Ratings
Czech Republic AA- A1 A+
Slovak Republic A+ A2 A+
Poland BBB+ A2 A-
Russia BB+ Ba1 BBB-
Bulgaria BB+ Baa2 BBB-
Hungary BBB- Ba1 BBB-
Romania BBB- Baa3 BBB-
Source: Czech National Bank, 2016 Note: Foreign Currency Long Term Sovereign Debt Ratings, 26th September 2016
Connect & Support 12 Main universities 2015/2016
TU Liberec Students: 6,618 UJEP University CZECH REPUBLIC Usti nad Labem Graduates: 1,532 of Hradec Kralove Students: 8,701 Students: 7,200 Students: 326,909 Graduates: 1,744 Graduates: 1,905 Graduates: 82,004
University of Life Charles University Sciences, Prague in Prague University of Pardubice Students: 19,172 Students: 47,010 Students: 8,366 Graduates: 5,487 Graduates: 8,520 Graduates: 1,967 OU Ostrava Students: 9,189 Czech Technical University of Graduates: 2,411 University, Prague Economics, Prague Palacky University ZCU Plzen Students: 20,218 Students: 15,566 Olomouc Students: 11,526 Graduates: 4,643 Graduates: 4,358 Students: 20,897 VSB-TU Ostrava Graduates: 2,903 Graduates: 4,309 Students: 15,815 Graduates: 4,226
VUT Brno Students: 20,741 University of Tomas Bata in Zlin JU Ceske Budejovice Graduates: 5,478 Students: 10,565 Students: 9,427 Graduates: 2,780 Masaryk Graduates: 2,736 University, Brno Students: 32,950 Graduates: 8,375
Source: Ministry of Education, Youth and Sports, 2016
Connect & Support 13 Average annual wages Year 2015, in USD
70 000
58 714 60 000
51 442 49 677 50 000 41 716 40 471 40 000 33 542 29 979 30 000
20 000 13 647 12 773 12 257 10 660 10 000
0
Source: OECD, 2016
Connect & Support 14 12 UNESCO sites in the Czech Republic - places you just have to see!
Source Note
Connect & Support 15
III. Priority sectors
Connect & Support 16 Priority sectors Investment opportunities
Aerospace ICT
Automotive Life Sciences
Business Support Materials and Services Nanotechnologies
Energy & Cleantech Electrical Engineering and Electronics
Advanced Engineering R&D
Source: CzechInvest, 2016
Connect & Support 17 Aerospace
• Long history in manufacturing excellence, one of the largest LSA producers in the World
• More than 32,000 aircrafts & 37,000 engines delivered
• Well-developed supplier base
• Aerostructure programs with global market leaders
• World class aerospace R&D centres
• Modern airport infrastructure and MRO facilities
• Compared to Western Europe or the United States the cost per employee is significantly lower, between 40 – 60%, with the same level of expertise.
• Czech Republic is an ESA member state and home to GNSS Agency
Source: CzechInvest, 2016
Connect & Support 18 Automotive
从布拉格出发 • The Czech Republic has a unique strategic position 400km的半径 • 22 car production sites within 400 km away from Prague
• Makes part of the German automotive cluster
• More than 5 mil. motor vehicles manufactured there in 2014 300 km • 4.5 mil. cars sold in the region in 2014
Source: CzechInvest, 2016
Connect & Support 19 Advanced engineering
• Traditional engineering field
• Supported Segments: Power engineering, Transport engineering, Machine tools, Metallurgy, Metal structures and components
• Production Base of 6700 companies
• Only CEE country that is a member of a prestigious group CECIMO
• Regarding production per capita holds 8th place globally and 5th within Europe
Source: CzechInvest, 2016
Connect & Support 20 ICT
• Cloud computing
• Data mining, Image/Voice recognition
• Mobile technologies
• Smart cities
• Industry 4.0
• M2M (machine to machine) communication
• Data centre infrastructure
• Cyber security
• Game development
Source: CzechInvest, 2016
Connect & Support 21 Electrical engineering and electronics
• Between 1946 – 1989 state owned monopoly
• Evenly distributed all around the Czech Republic
• More than 30 000 employees at its peak time
• Wide range of products (transistors, radios,
televisions, military radars)
• Several successful and unique products (Tamara
radar)
Source: CzechInvest, 2016
Connect & Support 22 Life sciences
• Vaccine production
• Microbial manufacturing of biopharmaceuticals
• Generic drug makers
• R&D of veterinary products
• R&D of antibodies
• Production of ELISA kits
• Production of medical devices
Source: CzechInvest, 2016
Connect & Support 23 Nanotechnology
• Nanofibers
• Optics & Microscopy
• Monocrystalline materials
• Electron lithography
• Wound healing and tissue regeneration
• Nanostructured polymeric materials
• Nanoparticles for special purposes
Industrial tradition
1949 – First electron microscope into production
2003 – Advanced electrospinning process
Source: CzechInvest, 2016
Connect & Support 24
IV. Value added instruments
Connect & Support 25 Financial support tools in the Czech Republic
• Investment incentives to support companies setting up or expanding technology centres and centres for industrial R&D • Grants from EU and other international sources structural funds supporting the creation or extension of the R&D capacities and supporting innovative projects • Grants from the National Research Agencies • Deduction of R&D costs – Up to 100 / 110 % of the R&D expenses incurred in a given tax year can be deducted from the tax base as a special tax allowance.
Source: CzechInvest, 2016
Connect & Support 26 Investment incentives
Act on Investment Incentives No. 72/2000 Coll., as amended by the Act No. 84/2015 Coll., valid as of May 1, 2015
Supported activities • Manufacturing Industry • Starting or expanding production facilities • Technology Centres • Building or expanding R&D centres • Business support services centres • Establishment or expansion of shared service centres, SW development centres, high-tech repair centres, data centres and call centres • State aid intensity 25% for large enterprises, except for Prague (0%)
Source: Act on Investment Incentives No. 72/2000 Coll
Connect & Support 27 Investment incentives
• Eligible costs • Long-term assets of which at least half must be new machinery
or
• 2-years wage costs of employees on newly created positions
• For technology centres or business support services centres only
• Types of incentives • Corporate income tax relief for max. 10 years
• Real estate tax exemption for 5 years, only in Special Industrial Zones
• Job creation grants up to 11,100 EUR
• Training grants up to 50% of training costs
• Cash grant on capital investment up to 10% of eligible investment costs, only in case of strategic investment Source: Act on Investment Incentives No. 72/2000 Coll
Connect & Support 28 Sourcing section Supplier support
Market screening of suitable suppliers M&A and joint venture platform CzechLink M&A Arrangement of meetings and and provision of Joint Venture assistance
Administration of Organization of suppliers sector supplier forums database
Source: CzechInvest, 2016
Connect & Support 29
V. Investment projects
Connect & Support 30 Top 10 investments in the Czech Republic Mediated by CzechInvest
Total investment Company Country of origin (mil. USD)
Hyundai Motor Company South Korea 1 222
Nexen Tire Corporation South Korea 945
Toyota/PSA Japan/France 850
Volkswagen Germany 845
Robert Bosch Germany 450
Mondi Packaging Paper Štětí a.s. Germany 450
Nemak Europe s.r.o. Netherlands 436
Denso Mexiko 317
DHL Japan 263
Continental Great Britain 190
Source: CzechInvest, 2016
Connect & Support 31 Selected chinese investors in the Czech Republic
Shanghai Maling Kinloon Technology China State Shipbuilding Group Shijiazhuang Zhongxing Machinery Manufacture Saar Gummi Usti region Huawei Technologies Hradec Kralove region Shandong Linyi Noark HQ China CNR Corp. Ltd. Fenchem Biotek Economic Daily CITIC-MARMES A123Systems Yiwubuy.com Kiekert AG
Prague region Pardubice region Moravia – Silesia region WANSIDA YUNCHENG Sichuan Changhong Electric Power one enterprise Ltd. Shanxi Yuncheng Plate – Making Group Olomouc region YAPP Automotive Parts Oasis Agri
Central Bohemia region Baolong Zlin region Yanfeng Automotive Interiors Longway Czech
South Moravia region South Bohemia region Source: CzechInvest, fdi Markets, 2016
Connect & Support 32 Chinese investors mediated by CzechInvest
Company Sector Company Sector
Baolong Automotive Shanghai Maling Food Processing
China CNR Corp. Shanxi Yuncheng Plate Machinery Metalwork Ltd. – Making Group
Power One Sichuan Changhong Enterprise Holding Electric Devices Electronics Electric Ltd.
Saar Gummi Czech Chemical Yapp Automotive Parts Automotive
Source: CzechInvest, 2016
Connect & Support 33 Selected chinese investors in the Czech republic
Company Sector Company Sector
Shijiazhuang Electronic A123Systems Zhongxing Machinery Automotive Components Manufacture
Financial Bank of China TP-Link Technologies Communications Services
China State Non-automotive Yingke Varnai Business Services Shipbuilding Group transport
Business Economic Daily Yiwubuy.com Consumer products Services
Fenchem Biotek Pharmaceuticals ZTE Communications
Source: fDi Markets, 2016
Connect & Support 34 FDI from China to the Czech Republic
Projects Capex (€ m) Capex ($ m) Jobs
2005 3 92.03 101.81 844
2006 1 7.96 8.81 100
2008 1 35.96 39.78 158
2010 1 5.42 5.99 86
2011 2 29.57 32.71 149
2012 4 51.96 57.48 685
2013 1 10.94 12.1 500
2014 2 62.64 69.29 267
2015 3 37.35 41.32 359
2016 6 139.27 154.07 1,105
Total 24 473.19 523.48 4,253
Source: fDi Markets, 2016
Connect & Support 35 FDI from China to the Czech Republic FDI by sector
Projects Capex (€ m) Capex ($ m) Jobs
Automotive Components 7 137.80 152.45 1,567
Consumer Electronics 4 131.00 144.92 771
Business Services 2 5.40 5.97 15
Communications 2 9.10 10.06 88
Food & Tobacco 2 43.90 48.57 258
Chemicals 1 5.40 5.97 86
Consumer Products 1 33.20 36.73 218
Electronic Components 1 31.40 34.74 446
Financial Services 1 29.40 32.52 49
Metals 1 19.70 21.79 114
Other sectors 2 60.80 67.26 495
Total 24 473.20 523.48 4,253
Source: fDi Markets, 2016
Connect & Support 36 FDI from China to the Czech Republic FDI by business activity
Projects Capex (€ m) Capex ($ m) Jobs
Manufacturing 15 361.40 399.82 3,598
Business Services 3 34.80 38.50 64
Sales, Marketing & 3 14.50 16.04 174 Support
Design, Development & 2 29.20 32.30 199 Testing
Retail 1 33.20 36.73 218
Total 24 473.20 523.48 4,253
Source: fDi Markets, 2016
Connect & Support 37 Reasons to invest in the Czech Republic
• Strategic location
• Innovation and research
• Transparent investment incentives
• Highly skilled and educated labour force
• Well developed supplier base
• Tradition of industry
• CzechInvest´s services
Source: Czech Statistical Office, 2016
Connect & Support 38
Contact our CzechInvest China team
Shanghai Mr. Ondrej Koc Executive Director, Shanghai office Phone: +86 13817792614 E-mail: [email protected] Web: www.czechinvest.org/cn
Connect & Support Thank you for your attention
Connect & Support
www.czechinvest.org