Doing business in. the Czech Republic

Transcription

1 Doing business in the Czech Republic

2 Topics of the presentation Czech economy how is it doing? Czech-Lithuanian relations friends and partners. Doing business in the Czech Republic? Some tips. Want to invest? Will tell you how! Tourism why visit our country? Useful contacts

3 Basic Facts about the Czech Republic Area: 78,864 km 2 Population: 10,266,000 Official language: Political system: Head of State: Currency: Capital: Administrative division: Member of organizations: Czech Parliamentary republic President 1 Czech crown (1 EUR = 27 CZK) Prague 14 regions EU, NATO, IMF, WB, WTO, OECD, OSCE

4 Basic Facts about the Czech Republic - economy Let the stats speak: GDP y/y growth in Q % Government deficit (forecast for 2014): 0.4 of GDP Inflation, average last 12 months 2015/2014, 09/ % Inflation, 09/ % Unemployment (15-64 years of age), 09/2015 y/y 5.1% (- 0.9%) Average wage CZK (992 EUR), +3.4% nominal y/y, +2.7% real y/y Urbanization rate 74% Population growth rate %, median age 40.8 years Agriculture arable land 40%, share in GDP 3.4%, 4% of population engaged

5 Basic Facts about the Czech Republic - economy External Economic Relations Foreign trade 01-08/2015 y/y turnover +7.2% (173 billions EUR), exports +6.7% (91.6 billions EUR), imports +7.8% (81.3 bilions EUR), balance billions EUR TOP 10 trade partners total Germany, Slovakia, Poland, China,France, Italy, G. Britain, Austria, Netherlands, Russian Federation TOP 10 export markets Germany, Slovakia, Poland, G. Britain, France, Austria, Italy, Hungary, Netherlands, Spain TOP 10 import markets Germany, China, Poland, Slovakia, Italy, Russian Federation, France, Austria, Netherlands, USA

6 Basic Facts about the Czech Republic Credit Ratings COUNTRY STANDARD & POOR S MOODY S FITCH Czech Republic AA- A1 A+ Slovakia A+ A2 A+ Poland A- A2 A- Russia BBB- Baa1 BBB Bulgaria BB+ Baa2 BBB- Hungary BB+ Ba1 BB+ Romania BBB- Baa3 BBB- Source: Czech National Bank, 2014; S&P, 2015

7 Basic Facts about the Czech Republic CZECH REPUBLIC COMPETITIVE ECONOMY The Global Competitiveness Report ranks the Czech Republic 31 st out of 140, 3 rd in CEE region after AT, EE Global Competitiveness Index (Rank) Score (1-7) Institutions (57) 4,1 Infrastructure (41) 4,7 Macroeconomic environment (21) 6,0 Health and primary education (27) 6,3 Higher education and training (29) 5,1 Goods market efficiency (37) 4,6 Labor market efficiency (47) 4,4 Financial market development (24) 4,6 Technological readiness (29) 5,4 Market size (47) 4,5 Business sophistication (30) 4,5 Innovation (35) 3,8 Source: World Economic Forum, Global Competitiveness Report

8 Czech-Lithuanian bilateral relations Political background no open issues&problems, wide co-operation, variety of bilateral agreements, regular consultations on ministerial level Czech fighters took part in Baltic Air Policing Visits Foreign minister L. Linkevičius in Prague 2014 Czech Parliamentary delegation 2015 Minister of Health of the Czech Republic 09/2015 Minister of Defence of Lithuania 12/2015? Foreign minister L. Zaorálek to Lithuania 01/2016?

9 Czech-Lithuanian economic relations Trade statistics Foreign trade in 2014 turnover +3.3% (655.4 millions EUR), exports -3.4% (443.8 millions EUR), imports +20.7% (211.5 milions EUR), balance millions EUR (-18.2%) Foreign trade 01-08/2015 y/y turnover -6.3% (409.7 millions EUR), exports -7.7% (274.7 millions EUR), imports -3.5% (135.1 milions EUR), balance millions EUR (-11.5%) TOP 10 export products 01-08/2015 telecommunication equipment, passenger cars, ICT, polymers, pharmaceuticals, wires, glass fibres, plastic tubes and plates TOP 10 import products 01-08/2015 resins, fertilisers, pharmaceuticals, furniture, silk fabrics, electronic parts, taps, metal products, phosphates,

10 Czech-Lithuanian economic relations - companies

11 Doing business in the Czech Republic SUMMARY WHY? Reliable and capable business partners Close culture, traditions, background Skilled and inventive workers Export driven companies High quality products with affordable price Main competitive sectors machinery, car industry, metalworking, chemicals, electronics Availability of contact information

12 Doing business in the Czech Republic SUMMARY HOW TO? Looking for supplier? contact Embassy or CzechTrade in Riga (specification) check CzechTrade web ( fairs&exhibitions in the Czech Republic Looking for buyer/distributor? contact Embassy or CzechTrade in Riga (specification, company info) contact relevant institutions (Chamber of Commerce, Confederation of Industry, Association of SMEs etc.)

13 Invest in the Czech Republic SUMMARY INVESTMENT BENEFITS Outstanding geographical location Advanced transport infrastructure Transparent investment incentives Highly skilled and educated labour force Good level of language skills Well developed supplier base Attractive living environment Source: Czech Government, 2014

14 Invest in the Czech Republic TOP EUROPEAN INVESTMENT DESTINATIONS Number of FDI Projects Rank (2014) Country 1 United Kingdom 2 Germany 3 France 4 Spain 16 Czech Republic Source: Ernst and Young s European Investment Monitor, European Attractiveness Survey, 2015

15 Invest in the Czech Republic TOP EUROPEAN INVESTMENT DESTINATIONS Jobs Created by FDI Rank (2014) Location 1 United Kingdom 2 Russia 3 Poland 4 France 13 Czech Republic Source: Ernst and Young s European Investment Monitor, European Attractiveness Survey, 2015

16 Invest in the Czech Republic COST OF LIVING SURVEY Cost of Living Survey Worldwide Rankings 2015 Rank 2012 City Country 1 Luanda Angola 2 Hong Kong China SAR 3 Zurich Switzerland 12 London United Kingdom 51 Moscow Russia 111 Riga Latvia 143 Prague Czech Republic 155 Tallinn Estonia 171 Vilnius Lithuania Source: Mercer HR Consulting, 2015

17 Invest in the Czech Republic QUALITY OF LIFE Worldwide quality of life index, 2012 Rank 2012 Country Score 1 Switzerland Denmark Germany Czech Republic Poland Slovakia Lithuania Hungary Source: Numbeo Quality of Life Index for Country, 2015 Mid Year

18 Invest in the Czech Republic How is the Czech Republic doing? Total FDI in billions EUR/5.911 billions USD TOP 5 countries in 2014 Germany, Cyprus, Luxembourg, Poland, Belgium FDI by sectors services billions EUR, manufacturing industries billions EUR, mining -205 millions EUR, energy sector -739 millions EUR, construction sector 114 millions Total Czech FDI in the world millions EUR/-529 millions USD TOP 5 countries for Czech FDI in 2014 Germany, Croatia, Luxembourg, Slovakia, Lichtenstein

19 Invest in the Czech Republic CUMULATIVE FDI INFLOW BY SECTOR Electricity, gas, and water supply 4% Real estate and business activities 16% Other 1% Construction 1% Manufacturing 25% Total EUR: billion Total USD: billion Trade, hotels, restaurants 14% Transport, storage and communications 14% Financial intermediation 25% Source: Czech National Bank, 2014

20 Invest in the Czech Republic CUMULATIVE FDI INFLOW BY COUNTRY Total EUR: billion Total USD: billion Switzerland 4.94% United States 5.53% France 5.95% Austria 13.06% Belgium 4.11% United Kingdom 3.44% Japan 0.76% Canada 0.27% Other 20.38% Sweden 1.20% Denmark 0.94% Italy 0.84% Netherlands 15.37% Germany 23.20% Source: Czech National Bank, 2014

21 Invest in the Czech Republic TOP 10 INVESTORS IN THE CZECH REPUBLIC (MEDIATED BY CZECHINVEST) Company Country of origin Total investment (in mil. USD) Hyundai Motor Company South Korea 1,222 Toyota/PCA Japan/France 850 VOLKSWAGEN Germany 562 Mondi Packaging Paper Štětí a.s. Netherlands 394 Nemak Mexico 317 Denso Japan 255 Robert Bosch Germany 237 Matsushita Electric Industrial Co. Japan 235 L.G. Philips Displays Holding Netherlands 202 DHL GB, Ireland 190 Source: CzechInvest, 2014 From 1993 to 2014

22 Invest in the Czech Republic Roadways Total: 55,500 km (paved) Railways 1,178 km of motorways and highways (2,180 km planned) Total: 9,600 km in operation 3,000 km electrified tracks Waterways Total: 660 km (mainly Elbe, Vltava and Oder rivers)

23 Invest in the Czech Republic FAVOURABLE LABOUR COSTS Creative, innovative, skilled and experienced labour force Lower costs compared to Western economies (CZK 25,128 = EUR 916 = USD 1,254) Steady inflow of new graduates into the labour market Labour costs per hour (USD) 2012 Number of graduates in technical fields Source: CzechInvest, 2014; MarketLine Advantage, 2013; Ministry of Education, Youth and Sports, 2014

24 Invest in the Czech Republic SOCIAL AND HEALTH INSURANCE CONTRIBUTIONS Employer payable Employee payable Health insurance 9.0% 4.5% Social insurance 25.0% 6.5% pension fund 21.5% 6.5% sickness insurance 2.3% 0% unemployment fund 1.2% 0% Total 34.0% 11.0% Source: CzechInvest, 2014

25 Invest in the Czech Republic TAXATION IN THE CZECH REPUBLIC Corporate income tax 19% Personal income tax 15% Withholding tax 15% Value-added tax 21% or 15% Real estate tax rates vary by type, location and purpose of use Real estate transfer tax 4% (flat rate) Road tax rates vary by engine capacity (passenger cars) or weight and number of axles (other commercial vehicles) Excise tax on petrol, alcohol and tobacco only Energy tax on electricity, natural and other gases, and solid fuels Source: PricewaterhouseCoopers, 2014

26 Invest in the Czech Republic Business intelligence Consultancy on available financial support for investment projects 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 Liaising with government bodies Aftercare services All CzechInvest services are free of charge

27 Tourism why visit our country? Tourism in the Czech Republic Located the crossroads of cultures in the heart of Europe, the Czech Republic has countless cultural and historical points of interest. The Czech Republic is a country of great historical and cultural traditions. A country rich in historic sites, including entire towns, inscribed on the World Heritage List.

28 Tourism why visit our country? UNESCO Sights in the Czech Republic

29 Tourism why visit our country? Prague is the top tourist destination in the Czech Republic. Recognized as one of the most beautiful capitals in the world, the city boasts an exquisitely preserved historical centre.

30 Tourism why visit our country? Mineral spa towns in the Czech Republic are very popular tourist destinations. Spa towns like Karlovy Vary (Karlsbad) and Mariánské Lázně (Marienbad) have a very long history of international recognition and success. The spa town of Jáchymov is renowned for its rare radioactive springs.

31 Tourism why visit our country? Beer and beer baths Czech beer is a national symbol, enjoying the Protected Geographical Indication status since The annual production of nearly 20 million hectolitres places the Czech Republic 15th in the world (the biggest producer is the USA, followed by China and Germany). A beer bath is an extremely popular wellness procedure. It combines the curative effects of mineral water, beer and ingredients used in beer production. The benefits of beer baths have been known since the Middle Ages. Medieval doctors, herbalists and bonesetters recommended bathing in yeasty beer as a curative as well as preventive therapy. For more information please visit: -Czech-Republic

32 Tourism why visit our country? Wine and winemaking in the Czech Republic Moravian white wines are recognized worldwide. They have won many international awards and are well received even in major wine-growing countries such as France and Germany. The Czech Republic is divided into two main wine-producing regions, Bohemia and Moravia, each with several subregions. The country s wine producing tradition is very long, going back to the 3rd century when the Romans planted the first grape vines in the territory of the present Czech Republic. The area taken up by vineyards was largest in the seventeenth century, on the eve of the Thirty Years' War. Today there are 19,000 hectares of vineyards, mostly situated in Moravia. For more information please visit:

33 Tourism why visit our country? Wine & Tourism The diversity of the Moravia wine producing region, stretching across several terroirs with different climatic factors, gives Moravian wines their distinctive character. The area between Znojmo and Uherské Hradiště, with its diversity of vineyards, wine growing traditions, grape varieties and wine producing technologies has a unique genius loci. More than 1,200 kilometres of signposted cycling trails known as the Moravian Wine Route run through Moravia. The trails zigzag the wine growing region, guiding you to vantage points, down wine cellar alleys, and through many famous wine-growing villages. A cycling tour along the Wine Route is a good way to see the picturesque Moravian landscape with its historical landmarks and wonderful wines. For more information please visit:

34 Useful Links Ministry of Foreign Affairs The Official Czech Republic Website Trade Promotion Office in Riga Investment and Business Support

35 Thank you for attention!