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Resources of Business Sector of Czech Economy Up by a Third Foreign Trade Has Reached a Record Surplus The Offer of Legal Services in the CR Is Broad Karlovy Vary Region 03–04 2006 112 luxurious five-star and 116 first class four-star rooms in an exciting hotel in the most beautiful part of Karlovy Vary Don’t miss the experience of excellent services! Comfort You Deserve... you will get …We Think of You you will take a taste all the comfort that of unique and first-class you expect cuisine GRANDHOTEL PUPP Karlovy Vary, a.s. • Mírové náměstí 2, 360 91 Karlovy Vary • Czech Republic ☎ +420 353 109 111 • Fax: +420 353 224 032 • [email protected] • www.pupp.cz CONTENTS Ministry of Industry and Trade CZECH BUSINESS ■ INTRODUCTION AND TRADE Question of the Month for Milan Urban, Minister of Industry and Trade............4 Economic Bi-monthly Magazine with ■ a Supplement is Designed for Foreign ECONOMIC POLICY Partners, Interested in Cooperation with Success or Merely a Delay of Crisis? Tough Battle for World Trade the Czech Republic Liberalisation ......................................................................................................5 For the Ministry of Industry and Trade of the Czech Republic ■ HOW TO DO BUSINESS IN THE CZECH REPUBLIC Issued by: Resources of Business Sector of Czech Economy Up by a Third..........................7 PP AGENCY s.r.o. Myslíkova 25, 110 00 Praha 1, Czech Republic New Building Act – Several Minor Changes, Chief Principles Remain...............10 PP Agency Company with the ISO 9001 certified quality ■ BUSINESS AND PRODUCTION management system for publishing services Foreign Trade Has Reached a Record Surplus ...................................................12 EDITORIAL BOARD: Martin Tlapa (Chairman), Ivan Angelis, Zdena Balcerová, Jiří Eibel, Zbyněk Frolík, ■ INVESTMENT Jiří Havlíček, Růžena Hejná, Alžběta Honsová, Josef Jílek, Ivan Jukl, Marie Košťálová, Marie Pavlů, The Year 2005 Marks a New Record in Attracting Investment into the CR.......14 Pavla Podskalská, Josef Postránecký, Libor Rouček, Kaleidoscope....................................................................................................34 Jiřina Semanová, Jarmila Škvrnová, Ivan Voleš MANAGING EDITOR: ■ REGION Jana Vápeníková NUTS III – Karlovy Vary Region .................................................................16 – 31 EDITORS: Jaroslava Bradová, Naďa Vávrová ■ SERVICES REGULAR COLLABORATORS: Eva Tomášková The Offer of Legal Services in the CR Is Broad .................................................32 TRANSLATION: ■ Vlasta Benešová, Alena Kenclová, PRESENTATION OF FIRMS Petra van Benten-Knotová, Dagmar Šímová, Daniel Thelen, Eva Vergeinerová HOTEL AMBASSADOR ZLATÁ HUSA spol. s r.o....................................20 – 21 Veletrhy Brno ...................................................................................................35 READ: M. I. P. Group, a.s......................................................................................36 Ivana Kadlecová, James Maxwell, Katherine McCloghry, Zuzana Pavlíčková DINOCOMMERCE, spol. s r.o., Elektro, výrobní družstvo v Bečově nad Teplou, GRAPHIC DESIGN: GRANDHOTEL PUPP K.V., a.s., HEXION SPECIALTY CHEMICAL, a. s., LÉČEBNÉ Miloslav Bucvan, Helena Dvořáková LÁZNĚ MARIÁNSKÉ LÁZNĚ a.s., MARIENBAD WATERS a.s., PETERKA & PARTNERS DEADLINE: 31/01/2006 v.o.s., Richmond a.s., ROTAS Strojírny spol. s r.o., SOKOLOVSKÉ STROJÍRNY a.s. ADDRESS: Myslíkova 25, 110 00 Praha 1 Czech Republic Phone: +(420) 221 406 623, +(420) 221 406 626 Fax: +(420) 224 934 383 e-mail: [email protected] www.ppagency.cz www.mpo.cz/eng Press run: 13.500 copies. The number of printed and sold copies of the journal is verified by auditor, HZ Praha, s.r.o., member of PANNELL KERR FORSTER Worldwide. Resources of Business Sector of Czech Economy Up It is not allowed to reproduce any part by a Third of the contents of this journal without prior consent from the editor. Attitudes expressed by the authors of articles carried by CBT need not necessarily be consistent with the standpoint of the Publisher. MK ČR E 6379, ISSN 1211-2208 „Podávání novinových zásilek povoleno Českou poštou, s. p., odštěpný závod Přeprava, č. j. 3468/95, ze dne 24/10/1995“ The Year 2005 Marks a New Record in Attracting Karlovy Vary Region Investment into the CR 3 | INTRODUCTION Question of the Month for Milan Urban, Minister of Industry and Trade ■ one of the high-tech sectors listed as such by The Czech trade balance had shown the law or into another branch of the a record surplus last year. It has been manufacturing industry, with the proviso that the first overplus since the at least 50 % of the price of the production establishment of the independent line will be the cost of high-tech machinery Czech Republic. that the firm will purchase. It must involve the Great part of this success belongs to introduction of new production, enlargement the exporters who were granted of existing production or its modernisation. investment incentives by the Czech The investor must invest at least CZK 200 Government, that means especially car million (approx. EUR 6.72 million); in areas producers. How effective, in your with an unemployment rate at least 25 % opinion, are the investment incentives higher than the national average, the amount introduced eight years ago, from required can be reduced to CZK 150 million which firms have been able to use the (approx. EUR 3.36 million). In addition, the preferential conditions granted to proposed production must meet all Czech them so as to introduce new or to environmental requirements. The Czech modernise existing production Government offers investment incentives in facilities? several forms: a bonification of income tax for Perhaps the most persuasive reply is that the a period of 10 years, the transfer of leaders in Czech exports are firms which have technically equipped land at an advantageous used the incentives. Thanks to these price, the transfer of land under special incentives, foreign firms have brought into regulations, financial support up to CZK the country not only know-how and orders 200 million per employee (approx. EUR for Czech subcontractors, but also, and more 6.72 million), for the creation of new jobs and importantly, their contacts to foreign markets, support in the form of re-qualification or the where they place a large part of their output. training of employees. In each individual case The Czech economy, which can be it depends on the concrete agreement. characterised as a small and open economy, is strongly dependent on its export ■ performance. The nearly 250 firms (including Many incentives went into the 42 Czech firms), which have taken advantage automotive industry. Currently, of the investment incentives during the past another car manufacturer, eight years, are contributing significantly to Korea’s Hyundai, is preparing to come. the economic growth of the Czech Republic. Aren’t you afraid that the CR will We estimate that in the year 2005 alone, become excessively dependent on these firms accounted for more than 3 % of a single manufacturing branch? the Czech generated GDP, and they are Yes, indeed, the Czech export leader is responsible for nearly 15 % of added value in Škoda-Auto of Mladá Boleslav, the firm the manufacturing industry. It can be said that TPCA started up production near Kolín, and enterprises which obtained this form of Hyundai is another car factory. Although the support from the Czech Government, are automobile industry has a great influence on showing a productivity level twice as high as the Czech economy, it nevertheless accounts the Czech average is. In addition, large for only 18 % of total revenues from foreign firms, which came to the CR just industry as a whole. I think that investments MORE AT: because of the incentives, are establishing in the car industry are effective. In addition, long-term contacts with Czech a large share of this production goes to the www.mpo.cz subcontractors. This is also a very valuable credit of Czech subcontractors, who make consideration which we must bear in mind. deliveries to car factories all over Europe. www.czechtrade.cz Therefore, the benefit of the incentives must And this is not the only argument. Another necessarily be assessed positively. reason, for example, is the fact that car www.ceb.cz making has been one of the most long-term ■ globally stable sectors. Compared with www.egap.cz What are the conditions that must be electrical engineering and electronics, met to obtain investment incentives? for example, it is showing minimum www.export.cz There are a lot of such conditions. In brief, the fluctuations. And capital investments in the investment must go into the manufacturing sector are so intensive that they always industry. Specifically, it must go either into involve long-term projects. | 4 CZECH BUSINESS AND TRADE Success or Merely a Delay of Crisis? Tough Battle for World Trade Liberalisation The 6th Ministerial Conference Moreover, the text of the draft the talks on the Doha Development of the World Trade Organisation Declaration was changed in the Programme. The use of the "Swiss second half of the conference to the formula" for line-by-line liberalisation was (WTO) in Hong Kong in detriment of European Union interests so confirmed, agreement on its coefficients mid-December 2005 was markedly that it jeopardised its adoption. was not reached, however. This formula is expected to reach an agreement Only intensive efforts by European of a non-linear nature and therefore Commission