Doing Business in the Czech Republic 2018 by PP AGENCY

Doing Business in the Czech Republic

2018

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D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic

DOING BUSINESS IN THE CZECH REPUBLIC 2018

Prague

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 Czech Export Bank Export Guarantee and Insurance Corporation, a.s. 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, Jiří Hansl, Marcela Havlová, Jaromír Kohlíček, Dagmar Kuchtová, Martin Lukáš, Karel Machotka, Marie Pavlů, Tomáš Seidl, Miroslav Somol, Jarmila Škvrnová, Jan Špunda, Martin Tlapa, Jan Wiesner Editor-in-Chief: Pavla Podskalská Editor:

Jana Pike

Graphic design: Graphic designer: Petra Husková, Dominika Tomečková Production: Petra Husková Cover:

Petra Husková

Issued by: PP Agency s.r.o. Myslíkova 25, 110 00 Praha 1, Czech Republic www.ppagency.cz, e-mail: journal@ppagency.cz Deadline:

Photo: CzechTourism archives, Pavel Hroch

30 November 2017 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.

2018

DOING BUSINESS IN THE CZECH REPUBLIC 2018

CONTENTS Foreword by Marek Rojíček, President of the Czech Statistical Oﬃce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

I. CZECH REPUBLIC  ECONOMIC POLICY Useful Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Monetary Conditions on the Road to Neutrality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

II. CZECH INDUSTRY Energy Industry in the Czech Republic – Prospering Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Czech Engineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 200 Years of Czech Railway Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25 Czech Automotive Industry: A New Record Ahead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Vision of Chemical Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Czech Building Industry on an Optimistic Wave . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32 Czech Medical and Sanitary Ware Conquers the World . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34 Top Quality and Exquisite Design of Bohemian Glass and Ceramics . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37

III. HOW TO DO BUSINESS IN THE CZECH REPUBLIC Forms of Business Activities in the Czech Republic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46 Incorporating a Limited Liability Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47 Incorporating a Joint-Stock Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49 Steps for Acquiring a Czech Trade Licence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 The Most Important Changes in Czech Law for Entrepreneurs in 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 Lease of Business Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53 Investment incentives in 2017 and 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55 The Czech Republic: New Act on Public Procurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57

IV. FINANCE Banking Sector: Stricter Regulation, Increasing Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 Tax Changes in Brief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63 Entrepreneurship of Foreign Entities and Its Taxation in the Czech Republic . . . . . . . . . . . . . . . . . . . . .65 Employees – Taxation, Social Security, and Health Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66

2018

Photo: CzechTourism archives, Jaroslav Mareš

V. REGIONS Prague Region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70 Central Bohemia Region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .74 Plzeň Region. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .79 South Bohemia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 Karlovy Vary Region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .85 Ústí nad Labem Region. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 Liberec Region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .92 Hradec Králové Region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .95 Pardubice Region. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 Vysočina Region. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .103 South Moravia Region. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .106 Zlín Region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .109 Olomouc Region. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 Moravia-Silesia Region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116

D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic

Hazmburk Castle

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

2018

Doing Business in the Czech Republic 2018 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

Czech Export Bank

Export Guarantee and Insurance Corporation, a.s.

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

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

2018

Photo: Czech Statistical Office

Czech Chamber of Commerce

D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic

For many economists, analysts, investors and businessmen, the annual economic publication – Doing Business in the Czech Republic – is a valuable source of data, reviewing the economic situation in this country over the past year, in our case the year 2017. The trends of that year can be derived from a number of statistical indicators and different data sources. One of the most important is the Czech Statistical Office, which produces independent official statistics and coordinates the State statistical service of the Czech Republic. The latest statistics available show that in 2017 the Czech economy continued its upward trend, which has been ongoing since the end of 2013. At the beginning of this period, growth was boosted mainly by external demand. In 2014 and 2015, this trend was supported by growing investment activities stimulated by the drawing of EU subsidies before the expiry date. Since the end of 2014, also the domestic demand has been a firm pillar of economic growth, which is currently dominated by vigorous growth of household consumption expenditure supported by wages and salaries increases. The specific conditions of the massive economic growth in 2015, caused primarily by the drawing of money from the EU funds, led to a marked slowdown of the year-on-year growth in 2016. Last year, this phenomenon was no longer observed in the year-on-year GDP growth dynamics. In the first quarter of 2017, the Czech economy accelerated its growth to 3.0 % and, in the following quarter, to 4.7 %. The year-on-year gross domestic product growth estimate in the third quarter was at the level of 5.0 %. Consumption expenditure was responsible for about 40 % of the economic growth. The current acceleration of the economy was thus contributed to (besides consumption) also by an increasing external trade balance and the revival of investment activities. The investment activities in 2014 and especially in 2015 were greatly boosted by the drawing of money from the EU structural funds before the expiry date. In 2016, investments were the only component of the gross domestic product showing a decline, year-on-year, which was reflected especially in the general government sector. Although the investment activity of the general government last year showed a year-on-year growth, its level remained relatively low. External trade remained to be one of the central pillars of the Czech economic growth in 2017. In the first three quarters of the year, the value of the goods exported was CZK 2 610 billion; it increased by 5.9 %, year-on-year. In the past few years, domestic exporters took advantage of the favourable economic development in the EU, to which more than 80 % of Czech exports are targeted. Last year, the commodity structure of Czech exports remained rather unchanged and the proportion of motor vehicles further increased. As expected, the continuing favourable development resulted in a decline in the unemployment rate, which dropped from 3.5 % to 2.6 % from January to October 2017. From business-cycle surveys it results that the labour force shortage is becoming the greatest obstacle to growth for many enterprises. In order to keep their employees, firms are beginning to significantly increase the wages. In the first half of the year, the average wage in the Czech Republic was CZK 28 623. Already at the end of 2016, the year-on-year growth of consumer prices reached the inflation target and, in 2017, this trend was affirmed. Between January and October, the year-on-year growth of prices stayed above the 2 % level and, in mid-2017, it began to accelerate. The most marked contributions to price increases came from prices of food, housing, and transport. In the course of the year, the influence of transport weakened and a price increase was observed in restaurants and hotels. Prices of industrial and agricultural producers also broke the long period of decline. With regard to economic development, 2017 can be assessed as a successful year. Final data concerning the development of the Czech economy will only be available in the first quarter of 2018. Nevertheless, from the data already available we know that the last year surpassed the 2016 level of economic growth. The current situation, however, poses the question of sustainability provoked by the aforementioned labour force shortage and growing dependence on the manufacture of motor vehicles. MAREK ROJÍČEK President of the Czech Statistical Office

2018

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D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic I . C ze c h R e pu bl i c – Ec o n o mic Po l ic 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

10 567 473 (1. Q. 2017) 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 26.33 (average, 2017) USD 1 = CZK 23.38 (average, 2017) Internet domain name: .cz

TWELVE CZECH UNESCO WORLD HERITAGE ITEMS The UNESCO World Heritage List includes the following cities and sites: Prague, Český Krumlov, Kutná Hora, the Litomyšl Chateau, Telč, the Lednice-Valtice area, Zelená Hora – the Church of St John of Nepomuk (in Žďár nad Sázavou), Holašovice, Kroměříž (Chateau 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. Intangible UNESCO monuments: Slovácko Verbuňk (Slovácko Verbuňk belongs to male saltation dances. It is an impromptu dance, which is not bound by exact choreography rules), Lent (Descriptions of Shrovetide processions and masks in the Hlinsko Region have been documented since the 19th century), Falconry (Falconry is one of the oldest relationships between man and predator, which has lasted for more than 4 000 years. It is the traditional activity of hunting using trained birds of prey in a natural environment), Kings’ Ride (The Ride of the Kings is a folk tradition of yet unknown origin, mostly associated with the traditional Christian holiday). More information at www.unesco-czech.cz.

NOTABLE PERSONALITIES Czechs are described as a very cultured nation that 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 Czech-born sports people are, for example, Emil Zátopek, Věra Čáslavská, Martina Navrátilová, Jaromír Jágr, Petr Čech, and Petra Kvitová.

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.

PRACTICAL INFORMATION

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

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 a couple of companies: for example O2 Czech Republic, a.s., T-Mobile Czech Republic a.s., Vodafone Czech Republic a.s. The most widely used credit cards in the Czech Republic are: Eurocard/Mastercard and Visa.

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MONETARY CONDITIONS ON THE ROAD TO NEUTRALITY In early April 2017 the Czech National Bank (CNB) abandoned its exchange rate commitment that had been used for more than three years as an unconventional monetary policy instrument. Continuation of the exchange rate commitment was no longer needed as the conditions for sustainable fulfilment of the 2 % inflation target in the future had been met. Since then, the Czech koruna (crown) has appreciated gradually, and there was no need for the CNB to intervene in the FX market to smooth the transition back to a floating exchange rate. Subsequently, the CNB has started to raise the interest rates since August 2007, being the first EU central bank to start normalising its monetary policy. Increasing interest rates should contribute to inflation returning from above to the 2 % target in late 2018. EXCHANGE RATE COMMITMENT SERVED ITS PURPOSE

the exchange rate commitment with immediate effect.

KORUNA IS OVERBOUGHT During the use of its exchange rate commitment, the CNB purchased approximately EUR 76 billion. This large volume of FX purchases, together with the very transparent approach of the Central Bank in communicating the upcoming exit, contributed to rather benign post-exit developments. Contrary to widespread expectations of a sharp appreciation after lifting the exchange rate commitment, the koruna strengthened only modestly in the first weeks after the exit. Its further appreciation in the rest of 2017 (by approximately 5 % until November 2017) has only been gradual,

Photo: freeimages.com

The exchange rate commitment fulfilled CNB’s expectations. Inflation – despite being low for a protracted period of time – remained above zero, and thus the threat of the economy falling into a deflation trap was eliminated. The weakened exchange rate also significantly contributed to renewed economic growth and to a significant improvement in the labour market situation. Besides very accommodative monetary conditions in both exchange and interest components, the turnaround in the domestic economy was also fostered by a recovery in external demand and the discontinuation of a restrictive domestic fiscal policy. Household consumption and investment started to rise and the unemployment rate gradually fell to the lowest level among all EU countries. In early 2017, the macroeconomic forecast was for meeting the 2 % inflation target on the monetary policy horizon and for a solid economic growth in the years to come. This forecast simultaneously foresaw gradual monetary policy tightening. In this situation, the exchange rate commitment was no longer necessary for the fulfilment of the price stability objective. The CNB’s Board thus decided at an extraordinary monetary-policy meeting held on 6 April to end

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D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic I . C ze c h R e pu bl i c – Ec o n o mic Po l ic y

and without any major fluctuations. These favourable exchange rate developments, together with a positive outlook for inflation, allowed the CNB

to start raising its key interest rate from the technically zero level. In particular, the two-week repo rate was increased to 0.25 % in August and to 0.5 % in November. The CNB thus became the first EU central bank to start the normalisation of its monetary policy.

EXCHANGE RATE COMMITMENT

22 1/07

CZK/EUR

1/08

1/09

1/10

1/11

1/12

1/13

1/14

1/15

1/16

1/17

Exchange rate commitment

Source: Czech National Bank

There were basically two reasons for such mild exchange rate developments since the floor was abandoned. Both of them were actually anticipated and communicated by the CNB to market participants in advance, i.e. already during the existence of the commitment. Firstly, the koruna exchange rate was not far oﬀ from its real equilibrium level at the time of the exit. This followed from the fact that the depreciation in November 2013 had started from a somewhat overvalued level, and the weakened currency had in the meantime passed through to prices and other nominal variables, especially wages. The second element that stabilised the koruna was the “overboughtness” of the market that progressively increased before

the exit. As a matter of fact, during the existence of the commitment, exporters had hedged to a large extent against the exchange rate risk and eﬀectively pre-sold their future euro-denominated export revenues to domestic banks. At the same time, long koruna positions of financial investors had been built in massive volumes. The closing of these koruna positions in a situation of a missing counter-party in the market has helped to mitigate any significant appreciation of the koruna and to reduce exchange rate volatility. Therefore, the CNB has not intervened on the FX market since April.

SUBDUED KORUNA APPRECIATION CREATES A SPACE FOR POLICY NORMALISATION The Czech koruna’s limited gains have paved the way for a gradual, but continuous raising of nominal interest rates in order to deliver the necessary monetary tightening that the economy needs. This is a favourable situation for the CNB, as the interest rates are moving away from the zero lower bound, and the monetary policy room to manoeuvre is increasing. Also from a financial stability point of view, higher interest rates are welcome, because they are countering the

2018

risk of overheating the housing and mortgage market (to which the CNB pre-emptively and primarily reacted by using its macro-prudential measures). The latest CNB forecasts have foreseen that both components, i.e. interest rates, as well as exchange rate, will contribute first to neutralisation and subsequently to a progressive tightening of the overall monetary conditions.

SOLID ECONOMIC AND WAGE GROWTH AHEAD According to the latest CNB forecast (published in Inflation Report IV/2017 in early November), the economic growth will reach 4.5 % in 2017 and will slow to more than 3 % in 2018 and 2019. During the whole forecasted period, the economy will remain above its potential. The increase in domestic economic activity in 2017 is mainly driven by a robust growth in household consumption in an environment of swift growth in household income, related primarily to the strong labour market. Investments are recovering, especially in the government sector as a result of the higher drawdown of EU funds. To a lesser extent, fiscal policy will contribute to domestic demand growth in 2018 via a significant rise in public sector pay and increasing pensions and social benefits. The economy will continue to benefit from stable demand growth in the Czech Republic’s main trading partner countries. The increasing shortage of the available labour force will cause employment growth to slow down and wage growth to accelerate further.

INFLATION WILL REACH THE 2 % TARGET IN LATE 2018 Inflation will stay above the 2 % target, but within its tolerance band, for most of 2018. The overall inflation pressures reflect accelerating wage growth amid robust growth of the domestic economy. Domestic inflation pressures will moderate, aided by the stabilising effect of monetary policy. However, they will continue to outweigh the anti-inflationary effect of import prices. At the same time, the one-off factors that increased inflation at the turn of 2017 will subside. Inflation will thus decline back to the 2 % target in late 2018.

THE FORECAST AND ITS RISKS ARE FOR FURTHER INTEREST RATE HIKES According to the latest forecast, the return of inflation to the target will be fostered by further growth in interest rates in addition to appreciation of the koruna. Until mid-2018, growth in interest rates will be slowed by the continuing quantitative easing by the ECB, which will put appreciation pressure on the koruna. However, at the same time, risks to the inflation forecast are slightly on the upside, according to the CNB’s Board assessment at its November 2017 monetary policy meeting. A risk in this direction may arise from the exchange rate, which may appreciate at a slower rate compared to the forecast, due to the above-mentioned “overboughtness” of the koruna market. The fundamental inflation pressures from the domestic economy may also turn out stronger and more persistent than predicted. Potential materialisation of these upside risks would warrant faster interest rate increases compared to the forecasted path. TOMÁŠ HOLUB Executive Director, Monetary Department Czech National Bank E-mail: Tomas.Holub@cnb.cz www.cnb.cz This article was written in November 2017. Updated forecasts of the CNB are available at www.cnb.cz.

CNB’S KEY INTEREST RATE 4

CNB’s key interest rate (in %)

0 1/07

1/08

1/09

1/10

1/11

1/12

1/13

1/14

1/15

1/16 1/17 Source: Czech National Bank

2018

II.

CZECH INDUSTRY

Building your tomorrow today Doosan Škoda Power • One of global leaders in steam cycle design and high performance steam turbines • More than 110 years of experience as a steam turbine OEM • Wide range of steam turbines from 3 MW to 1200 MW • For all types of thermal power plant and other applications, including concentrated solar power (CSP) • High efficiency combined with extreme reliability and operational flexibility • Non OEM turbine retrofit and modernization • Complex engineering and supervising assembly • Industrial steam turbines set industrial operations in motion across the globe Doosan Škoda Power is part of a strong group of companies united under the Doosan Group that supplies its customers worldwide with cutting-edge technology and services of high quality and value.

Learn more at

www.doosanskoda.com

Challenging global market is an excellent opportunity for us to showcase our rich experience.

Selected projects • • • • • • • • • • •

Empalme 280 MW, CCPP, Mexico – under execution Zarqa 182 MW, CCPP, Jordan – under execution Grati 198 MW, CCPP, Indonesia – under execution Red Dragon 354 MW, FPP, Chile – under execution Salalah 2x90 MW, CCPP, Oman – under execution Atacama I, 110 MW, solar, Chile – under execution Värö 64 MW, industry – biomass, Sweden Gummidipoondi 181 MW, FPP, India Dorad 2x140 MW, CCPP, Israel Salmisaari 175 MW, HPP – Non OEM modernization, Finland Stendal 46 MW, industry – biomass, Germany

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ENERGY INDUSTRY IN THE CZECH REPUBLIC  PROSPERING SECTOR The energy industry is one of the most important sectors in the Czech Republic. Traditionally, we are 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 deposits 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 adequate 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.

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 that will connect 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 approved the updated State Energy Concept, although it was expected to give more support to the gas sector in comparison with other energy sources.

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 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. This motivates firms to long-term investment which, considering current energy prices amounting to EUR 25/MWh, appears to be rather risky. These prices are below the level of the turning point of conventional energy sources production. The main reason for the decline in electricity prices is the growing proportion of renewable sources in the energy mix, the priority connection of those sources, state support and, in the final analysis, the excess of supply over demand.

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 both finance and administration, which reduces their potential in the future. The question is whether other electricity storage technologies (batteries, fuel cells) should be developed, or whether a more active management of demand should be ensured. Here, however, technological development has not made enough progress to enable their massive development in the conditions of the Czech market in the next five years.

2018

KEY ACTORS IN THE ELECTRICITY AND GAS MARKETS IN THE CZECH REPUBLIC The most significant actor in the Czech market is the ČEZ Group, currently figuring among the ten most important actors 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. The ČEZ Group has the capacity to flexibly react to changes in the energy sector which, according to EBITDA, ranks it alongside the best energy companies in Europe. The second most important actor in the Czech market is Innogy Energie (formally the RWE Group), which concerns itself with gas transmission, distribution and sale, and energy services. Other important actors 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 outside its own distribution area. There are also a number of alternative electricity and gas suppliers and energy service providers in the Czech Republic. Energy services are another step towards broadening the activities of vertically integrated companies and a segment with great potential for future development.

CHANGES IN THE CONSUMPTION AND BEHAVIOUR OF CUSTOMERS Energy consumption is pulled by growing industrial production, household consumption, as well as by energy saving programmes and other factors, such as the weather, which is especially true of the gas industry. The last two mild winters in the Czech Republic 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 2016, the Czech economy grew, in the 1st quarter by 2.5 %, while energy consumption is not showing such dynamic growth. The reason is higher energy eﬃciency in a number of industries on the part of small and medium-sized enterprises and households. It can therefore be expected that energy consumption will not increase massively in the next three to five years, but, on the contrary, may decline by 3–5 % a year.

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 EUR 20–25/MWh can be expected. Will this price become a new standard? If so, further investment in production will not be possible without state support. This will bring along a change of the market model and maybe the return to the single electricity supplier model. 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 – households and small enterprises – have been increasing. In spite of this growth of prices for final clients, however, the change is very low, ranging around +-3%. 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. On the other hand, there is a risk that electricity will become unavailable because the transmission and distribution facilities will be unable to handle such large volumes. Some countries, similarly to the Czech Republic and Poland, will put their protective systems in operation on their cross-border transmission lines for case of crisis.

2018

Photo: ČEZ archives, www.freeimages.com

ENERGY ENGINEERING Czech energy engineering is currently showing a slowdown caused primarily by low electricity prices, which in turn led to a halt of new power plant construction. A herald of a brighter morrow is seen in the rapid development of know-how and extensive production capacity, traditions and a good name in the world. Especially strong instances of this can be found in the East European countries, the former Soviet Union, and in the Middle East, where Czech companies were successful suppliers in the past. A solution is the offer of new products and setting foot in new markets. One of the big firms holding a prominent position in this field is Vítkovice Machinery Group

D o i n g B u s i n e s s i n t h e C ze c h R e pu bl ic I I . C ze c h In du s tr y

comprising thirty firms concerned with the preparation of large investment projects, for example thermal power plant retrofitting, manufacture of components for nuclear power stations – volume compensators and steam generators (for the Temelín and Dukovany and several foreign nuclear power stations). Another important player is Doosan Škoda Power, s.r.o., a member of Doosan Heavy Industries, based in Plzeň, with a centenary long tradition in turbine manufacture, which also makes turbo generators, heat exchangers and engine rooms, using its own development and product testing. Also well known is Modřany Power, a.s., an important manufacturer of piping systems for the energy industry, which it exports to some 40 countries the world over. It also supplies parts for the gas industry, petrochemistry, and construction. The following are some examples of its successful projects: Cramlington, a co-generation biomass power plant in Northumberland, North Anglia; prefabrication of the piping system for Red Dragon 375 MW thermal power plant in Chile, Škoda Praha, Sigma Group, a.s., Mpower Engineering, a.s., G-Team a.s. Ekol s.r.o., Enkom a.s. and Mavel a.s. in the Czech Republic.

ENERGY STABILITY IN THE CZECH REPUBLIC AND ATTRACTIVENESS FOR FOREIGN INVESTORS The Czech Parliament has recently passed a new Energy Act Amendment, updated its State Energy Concept and adopted rules for the new regulation period in the area of distribution to be in force until 2018. 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, cross-border installations, and protection against electricity spilling across the border, especially from Germany, 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 CZECH REPUBLIC For industrial production, prospects of more investment in the energy systems are 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. The only risk is a change of the market model and switching to payment for connection. With the help of state support for raising energy eﬃciency, a reduction of the energy intensiveness of industry is expected. This, however, is the concern of the industrial enterprises themselves. The outcome of these eﬀorts should be an overall reduction in energy-related costs and higher competitiveness of Czech enterprises at home and abroad.

ENERGY PRODUCTION Altogether 77.412 TWh of electricity was supplied into the network in the Czech Republic in 2016. The largest proportion of this amount was delivered by steam thermal power plants (53.6 % of the total volume of electricity produced and supplied into the network), followed by nuclear power plants (29.4 %), steam gas plants (5.2 %), gas and combustion plants (4.4 %), photovoltaic plants (2.7 %), hydroelectric power stations (2.6 %), pumped storage plants (1.5 %) and wind power plants (0.6 %). Heat is generated especially in cogeneration power stations as a by-product of electric power stations or in city heating plants. Cogeneration is widely used in the Czech Republic and is at a high level of development. A considerably large amount of electricity ﬂows from the Czech Republic across the frontier, mainly to Austria and Slovakia. Most of the energy exported from this country is generated in the Temelín and Dukovany nuclear power stations. In 2016, net electricity exports amounted to 10.974 TWh.

2018

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CZECH ENGINEERING In 2017, Czech engineering will grow by 3.7 % year-on-year, but next year its growth will be only 1.5 %. The revenues of engineering firms will increase by 7.1 % on an average and this year by 5.7 %, according to a CEEC Research Study. “In 2017, engineering will continue to grow with the automotive industry being once again the main sector pulling its growth up. In consequence of the slowdown in demand in certain European markets, however, a more moderate growth is to be expected,” Bohdan Wojnar, president of the Automobile Industry Association, said. Ninety-nine per cent of the 151 directors of the market leaders enquired in a survey carried out by the analytical company CEEC Research agreed on this figure. AGRICULTURAL MACHINERY  TRADITIONAL EXPORT COMMODITY Agricultural machinery is a traditional Czech export commodity. Over the past thirty years, the character of the machinery has radically changed. The machines have been modernised and compare favourably with the technologically most demanding sectors, using modern materials and space technologies. Sophisticated production is a common feature in Czech factories and firms readily meet demand, oﬀer new models and boast a high quality of processing, all this at competitive prices, on both the domestic and foreign markets. There are about one hundred manufacturers of agricultural and forestry machinery in the Czech Republic. The A.ZeT Agricultural and Forestry Machinery Association has 43 firms, which comprise all the major domestic manufacturers. The overall production of the member firms is worth some CZK 20 billion (approximately EUR 700 million), which accounts for 80 % of the total output in the Czech Republic. Of the total Czech export of this commodity amounting to CZK 16.7 billion (approx. EUR 620 million), the export volume of A.ZeT members accounts for more than 85 %. Czech agricultural machinery manufacturers employ an estimated 10 000 people, about onethird of the number the sector employed 20 years ago.

Photo: Siemens archives

FOREIGN TRADE Czech firms are becoming increasingly involved in foreign trade. Practically until 2008 agricultural machinery export grew at practically the same rate as did the import. In 2009 and 2010, both domestic and foreign sales of these machines dropped by approximately 30 % year-on-year. In 2011, foreign trade was revived and this trend continued also

in the following years. In 2016, the turnover of agricultural machinery export and import amounted to more than CZK 33 billion, with export and import being balanced (some CZK 16 billion on either side). In other words: in CZK denomination, the same volume of what is imported is also exported. The Czech Republic’s largest trade partners are the neighbouring countries – Germany, Austria, and Slovakia, and France and Poland. Here, much depends on the kind of goods. For example Zetor tractors are traditionally successful in Poland, Scandinavia, and the Balkan states. Manufacturers are renewing contacts with their former partners in the countries of the former Soviet Union – Russia, Ukraine, Baltic States and the new EU member states Romania and Bulgaria. The most important Czech export items are fodder and straw crop harvesting machines, which include combine harvesters, cutters and mowing machines, rakes, hay tedders, etc., which account for around 40 % of the total agricultural machinery export, tractors, accounting for 22 %, and soil preparation machines also for 22 % of the total agricultural machinery export. The quality of Czech products is comparable with European standards. This is attested by the fact that a large number of machines developed and made in Czech factories can be seen in the fields of many European countries flying the flags of the Czech manufacturers’ partners in those countries for commercial reasons. Not every Czech firm is prepared to accept this practice, but such sales have become a general trend, and if such collaboration gives work to Czech hands and helps to get the

2018

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manufacturers to foreign markets, there can be no objection to it.

STRONG SIDES OF THE SECTOR, TRENDS AND EXPECTATIONS A relative advantage of Czech agricultural engineering is the structure of Czech firms: in most cases they are small and medium-sized enterprises capable of prompt response to demand and the customers’ specific wishes and requirements. The modern Czech agricultural machinery complies with the requirements of farmers for higher performance of the machines and better quality of manufacturing operations, the outcome of which is what has come to be known as precision agriculture. The new terms used are similar to those applied in other manufacturing industries, such as Agritechnics 4.0, which involves the use of ICT both in separate machines and in blocks of machines and technologies not only connected to an intelligent data net and using precision navigation systems for example in tractors and self-propelled machines, but also capable of monitoring and controlling separate working parts and sets. In all these aspects Czech manufacturers are competitive also in international comparison.

THE FUTURE OF THE MACHINETOOL AND FORMING MACHINE SECTOR IS BASED ON HIGH TECHNOLOGICAL QUALITY After the so far most successful year 2015, when the machine-tool and forming machine industry achieved absolutely the best results in the history of the Czech Republic, in 2016 its production rapidly declined, by approximately 14 % (in export by approximately 11 %). On the domestic market the main reason was lower demand and problems with the drawing of EU subsidies. In export the decline was due to the strong fall in demand from China, the continuing unfavourable situation in Russia, and the stagnant demand in the European markets, especially in Germany, which is the Czech Republic’s main export territory. For a number of years, the CR has been holding 14th to 15th position on the world scale of machine-tool and forming machine manufacturers and 8th position in per capita production and consumption of those commodities. The machine-tool and forming machine sector is the corner stone of Czech engineering. The development of this industry is the basis for the development

of other engineering sectors and consequently the entire industry. Its characteristic features are its high technical standard and technological level of advancement. The main requirements placed on machine tools are precision, productivity, safety, and reliability. In the area of electronics, drives, mechatronics and control and technological SW, Czech machine tools have reached a climax. Practically all Czech manufacturers use the same components for their products as the rival firms and are able to integrate their machines in the communication structure of the Industry 4.0 concept. Although new technologies are being gradually introduced, such as additive production, machining and forming will long continue to be essential technological processes in engineering.

CZECHS PARTICIPATE ACTIVELY IN IMPORTANT INTERNATIONAL EVENTS The main export territories for the Czech Republic are Germany (approx. 30 %), Russia (approx. 11 %) and China (7.3 %), followed by Slovakia, Italy, and the USA. Exports to Germany are currently showing a slightly declining trend, the same as exports to the Russian Federation, due to continuing sanctions, low oil prices, and the general economic situation in Russia. In comparison with 2013 and 2014, this means an approximately fifty-per-cent decline. After years of growing exports to China, the year 2016 saw a rather massive thirty-per-cent fall. Gratifying are the eﬀorts of Czech exporters to find their way back to the US market. While in Germany and Russia Czech machine tool import accounts for approximately 7 % of total imports and the Czech Republic occupies fourth position among all importers, in the remaining foreign markets the Czech share is substantially smaller. It is natural that for most Czech manufacturers the essential outlet for their products is the domestic market, where Czech competition advantages can be best used. Czech manufacturers have about a thirty-per-cent share of the domestic market. In exports we are at the same level as Austria and France. In the framework of CECIMO member states, the Czech Republic occupies 7th position.

STRONG TRENDS AND GREAT EXPECTATIONS The main trend is the continuing promotion of robotisation, automation, digitalisation, and connectivity, known as Industry 4.0. The importance of new technologies is increasing. In the first place this concerns additive production technology, which signifies new quality in the manufacture of special parts and complicated structures. A new impetus to the development of the machine-tool and forming machine sector is expected to be given by the development of electromobility.

INNOVATION WITHIN THE SECTOR One of the factors responsible for the high standard of Czech machine tools and forming machines is the innovative activity of most manufacturers, such as the companies TOS VARNSDORF, KOVOSVIT MAS, TAJMAC – ZPS, TOSHULIN, TOS Kuřim, FERMAT, and other firms. The basis are their own construction and development facilities, supported by collaboration with universities, e.g. RCMT attached to Prague Technical University, and independent research workplaces, such as VÚTS Liberec and manufacturers and suppliers of electronic and mechatronic components, tools and robots.

MORE INFORMATION: Agricultural and Forestry Machinery Association A.ZeT. More at www.zetis.cz The Association of Engineering Technology is a member of the European Association of the Machine Tool Industries (CECIMO). The Association represents some 36 % of the world machine tool and forming machine production. More at www.sst.cz

2018

Klima, s.r.o. – Manufacturer of welded structures and supplier of air conditioning systems The present-day company of Klima, s.r.o., a member of AML holding, an investment company acting as an umbrella organisation for firms doing business in the area of engineering and transport services, started its manufacturing activities at the end of 1967. Today it is an important player in the field of Czech engineering. Currently the firm is mainly concerned with the manufacture of welded structures for industrial purposes, especially power engineering, metallurgical production, petrochemistry, engineering, the organic industry, agriculture and, last but not least, the manufacture of ventilators. The company intensively promotes its collaboration with foreign partners in Germany, Austria, Norway, Sweden, Belgium and Switzerland. Seventy per cent of its contracts are with European firms, currently mainly those in the Nordic states, Belgium and Great Britain. Although large ventilators only account for 15 % of its production programme, the firm is considering the expansion of this section of its production programme, together with a renowned foreign company concerned with the manufacture and development of ventilators. Klima, s.r.o. also invests in the area of engineering equipment. Recently it purchased the highly productive type WRD horizontal boring and milling machine, which enables large-size and heavy welded pieces to be machined.

REFERENCES Ventilators: Nuclear power stations: Temelín, Dukovany (Czech Republic), Jaslovské Bohunice (Slovakia), Iranshar (Iran), Neuritis (Cuba), Talkha (Egypt). Cement works: Manaus, Itabira, Itapicura (Brazil). Other: Coal mills (Alstom Power), equipment for thermal metal processing (EBNER, IUT, LOI), filtering stations, heat exchangers, radial ventilators (VENTEC, Nicotra Gebhardt), welded structures (Hertwich, Scheuch, KraussMaffei, Engel, MFL Liezen, Autefa Solution), aircraft undercarriages (MCE-Airbus).

KLIMA s.r.o. Krumlovská 38, Prachatice II, 383 01 Prachatice, Czech Republic

www.klimacz.cz

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200 YEARS OF CZECH RAILWAY INDUSTRY

Photo: ACRI archives

The present successful development of the railway transport was enabled thanks to more than 200 years of traditional development of the Czech railway industry. The former ČKD or ŠKODA plants together with a range of other producers had always been at the top of their professions. The quality of their products can be shown through a large export.

This long-standing tradition is successfully linked up with the present representatives of the Czech railway industry, who do not rely only on tradition but invest significantly into the development of new products, in the purchase of high technologies and renewal of production areas. This technological innovation is necessary to ensure competitiveness and a stable market position of this industrial branch within the European region and worldwide. Currently the ACRI member companies employ 21 000 people in the Czech Republic and their annual turnover is more than EUR 3.2 billion, of which export accounts for 54 %. ACRI companies contribute significantly to employment and GDP creation in the Czech Republic. ACRI members export their products and services in particular to the member states of the European Union, the Balkan countries, Turkey, Russia, and Asian countries. Their products, such as train control systems, locomotives and tramcars, are of the highest European standards. The Czech railway industry is at the top of all European manufacturers, and Czech companies are in a position to compete with Europe’s railway giants. Among its export achievements, worth mentioning is the recent contract for the delivery of six sets of carriages and six locomotives from ŠKODA Transportation to Germany for Deutsche Bahn Regio, and the delivery of tramcars by the same manufacturer to a number of European and non-European cities. CZ LOKO is busy trading with the Baltic states, Belarus, and the Balkan states, and AŽD Praha is modernising railways in Slovakia, the Balkans, and Turkey, while railway wheels from Bonatrans can be found practically all over the world, and the same is true of anti-friction bearings from ZKL.

EXAMPLES OF EXPORT ACHIEVEMENTS R OLLING STOCK

ŠKODA Transportation will supply 10 electric train units manufactured for Lithuanian railways and 20 double-deck coaches for Finnish state railways. The new 109E Emil Zátopek locomotive from the Czech manufacturer, ŠKODA Transportation, has obtained approval to be put into operation on all German railways. Prior to this, the approval had already been obtained in 5 other countries, namely Austria, Poland, Hungary, Slovakia, and the Czech Republic. Moreover, it was just the second locomotive in the world to obtain the TSI High Speed RST certificate, necessary for the European interoperability of the high-speed railway system. The new tramcar follows the successful development of these cars in the ŠKODA factory. The company, which is currently producing tramcars for the Slovak capital city of Bratislava, is already completing the second contract for the Turkish city of Conya and is continuing in the manufacture of tramcars for Prague, which will feature a new design. The latest contracts: to deliver 65 new modern trams for the Finnish City of Tampere, 13 trams for Sofia, Bulgaria, 14 unique battery-powered trams to the Turkish city of Eskişehir – this is a follow-up to the previous delivery of 72 vehicles to the Turkish city of Konya, 20 ForCity tramcars to the Latvian Riga, and 14 ForCity tramcars for the German city of Chemnitz. This is a proof that Czech know-how can succeed in even the most demanding markets.

2018

AĹ˝D Praha Rail Transportation Road Transportation Telecommunications

Traditional Czech supplier of modern control and signalling systems

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D o i n g B u s i n e s s i n t h e C ze c h R e pu bl ic I I . C ze c h In du s tr y

ŠKODA Electric is now supplying drives and motors for 40 Metro sets in the Chinese city of Suzhou and others for projects in Novosibrisk and Mexico City. Škoda Electric will produce fifty new modern trolleybuses for Riga, the capital city of Latvia, and 14 new trolleybuses for Galati in Romania. The Latvian national operator, LDz, has selected CZ LOKO to remanufacture 14 Type 2M62U twin-section diesel locomotives used by its freight subsidiary, LDz Cargo. The 14 locomotives remanufactured by CZ LOKO will retain only the bogies and underframes from the donor units, which will be extensively reconditioned and mated with new engines, traction equipment and body shells developed by the Czech builder. The other orders are from Italy, Hungary, Finland, and Russia.  S IGNALLING

Photo: ACRI archives

AZD Praha has equipped the 13.3 km long loop at the Velim test centre with ETCS Level 2. Another significant contract with Belarusian Railways was concluded by

the Czech producer and supplier of control and signalling equipment, the company of AŽD Praha. Other projects are in Montenegro, Izmir, Beograd, and Macedonia. C OMPONENTS

Generations of true experts from BONATRANS continuously contribute to the evolution of the wheelset. Respecting the past but looking ahead, the pioneers of wheelset manufacturing produce premium solutions for the rail-bound vehicles of the world, thanks to the master craftsmanship and expertise handed down from generation to generation. Nowadays, the company supplies worldwide a full range of first-class products and reliable solutions: heavy rail wheelsets for high-speed trains and locomotives, low-floor solutions including resilient wheels, and noise absorbing solutions. In 2013, BONATRANS India Pvt. Ltd was founded. Currently, the plant for the wheel and axle machining and assembly of complete wheelsets was opened and started production for the Indian market. Development and manufacturing of brake systems for Metro vehicles has been a major part of DAKO-CZ activities. The company has successfully completed many projects, mainly in co-operation with the Siemens AG company. Currently, DAKO-CZ company is getting ready for the supply of brake systems for Metro vehicles in Riyadh, Saudi Arabia, Sofia, Nuremberg, and Bangkok. TESTING

AV ENGINEERING is the first company in the Czech Republic to introduce what are known as the ‘Accelerated’ life expectancy tests of individual components and units. This type of accelerated tests

permits the test duration to be cut by even five times, and clears the way for carrying out life expectancy tests of five different product modifications. In this case, such a benefit also results in cost saving when implementing developmental and control tests. VÚKV — The railway vehicle research institute offers not only design work and technical calculations, but also expert consulting and testing of dedicated components. Recent activities include supporting the development of trams for Istanbul and Kayseri, fatigue tests of bogie frames and testing of the Rgns freight wagon. VUZ (Railway Research Institute) offers expert services and comprehensive solutions in the field of assessment, testing activities, and consulting for the railway system and rail transport.

ACRI represents the Czech rail manufacturing industry. The Association gathers over 50 of the Czech Republic’s leading large and SME rail supply companies active in the design, manufacture, maintenance, and refurbishment of rail transport systems, subsystems and related equipment. ACRI represents its members’ interests at the national level and via membership of UNIFE also at a European level. ACRI is a unique Centre of Technical Standardisation acting in the railway sector, involved in European technical standards transfer to the Czech national standards system.

PROSPECTS FOR THE CZECH RAILWAY INDUSTRY

MARIE ALŽBĚTA VOPÁLENSKÁ General Director ACRI – Association of Czech Railway Industry E-mail: vopalenska@acri.cz www.acri.cz

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The Czech railway industry has tremendous potential. Investment in this sector will have a multiple eﬀect on domestic economic development. Specifically, it will have a favourable impact on employment, will improve the quality of transport services and lead to a higher

culture of travel, while also raising the export performance of enterprises. In general, Czech railways will require considerable investment in the next few years to attain the desired standards. In particular, this means investment in the development of the railway infrastructure, in addition to the completion of the railway corridors and the modernisation of key railway junctions. Nor must we forget about regional railway lines. To be competitive, we must fit the main corridors with the ERTMS/ ETCS European train control system, modernise freight corridors passing through the Czech Republic, harmonise the costs of all types of transport, invest in the modernisation and purchase of new carriages and, last but not least, start preparations for the construction of high-speed lines that will make the conventional lines available for freight transport.

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AMEST MEASURING AND CONTROL TECHNOLOGY, SAFETY GUARANTEE FOR HIGH-SPEED TRAINS Modern railway transport is characterised by an ever higher speed of trains. This is true particularly about Chinese railways, which are setting world speed records. Along with the speed of trains, the requirements for their operating safety and reliability are rising as well. This applies above all to the high quality of wheels and wheelsets, and the high level of inspection of the required parameters in their serial production. For this purpose, experts from the Czech AMEST company have developed special control and measuring technology for a Czech (Bonatrans BohumĂn), Indian (Rail coach Factory, Rae Bareli) and Chinese (Taiyuan Heavy Industry, Taiyuan) customer. AMEST specialises in the development, production, and installation of automatic measuring stations for complete interstage and final inspections of components manu-

factured with the dimensional tolerance of thousandths. The original construction of AMEST stations applies the tested principles of laser technology, optics, and programmed electronic equipment for automatic control of the whole process of precision measurement and production monitoring. At the input, AMEST stations are fitted with loading equipment timed as a follow-up to the preceding operation of the production line, and at the output there is a device for marking and sorting the checked pieces by the required tolerance. At set intervals, the equipment produces an electronic statistical record. This ensures that no piece that does not have the required parameters reaches the final assembly phase, and the place and time of the production and inspection of the particular piece can be ascertained if necessary.

Amest s.r.o., Ke Kablu 378, 102 00 Praha 10, Czech Republic phone: +420 272 702 025, fax: +420 272 705 754, e-mail: info@amest.cz, www.amest.cz

CZECH AUTOMOTIVE INDUSTRY: A NEW RECORD AHEAD More than 1.35 million motor vehicles were made in the Czech Republic in 2016, according to the Automotive Industry Association (AutoSAP). Between January and December of that year, 8 % more motor vehicles rolled oﬀ the lines in comparison with 2015, and the year 2017 looks even more promising.

THE AUTOMOTIVE INDUSTRY SUBSTANTIALLY BOOSTED TOTAL INDUSTRIAL PRODUCTION H istorically the best year for the automotive industry T he automotive industry boosted the entire Czech economy at the end of the year T he automotive industry is at the same time an important and competitive exporter D istinctive revival of truck manufacture CARS Car manufacture once again constituted the largest proportion of the total output of motor vehicles in the Czech Republic, amounting to more than 1.344 million units. As in previous years, the largest car manufacturer was ŠKODA AUTO with a share of 56.9 %, followed by HYUNDAI with 26.7 %, and TPCA with 16.4 %. Total production increased by 8.3 % year-on-year (103 016 cars). All the three domestic car makers showed a growth: ŠKODA AUTO by more than 2.5 % (to a record 765 171 units), HYUNDAI by more than 4.7 % (358 400 units – the most in its history), and TPCA in Kolín by 0.7 % (220 611 units). All the three car makers also increased their year-on-year exports: ŠKODA AUTO by 7.1 %, HYUNDAI by 13.9 %, and TPCA by 8.0 %. Buses: a total of 4 388 buses were made in the January to December period, 2.9 % less year-on-year (-129 buses). The largest proportion of buses was made by Iveco Czech Republic (3 885), 4.2 % more than in the preceding year (+157 buses). Another manufacturer, SOR Libchavy, a member of AutoSAP, made 454 buses. Both firms export an important part of their output.

TRUCKS TATRA TRUCKS, the only domestic truck manufacturer, increased its production by 56.0 % year-on-year. In 2016, TATRA TRUCKS made 1 326 vehicles, 476 trucks more than in the preceding year. The more than 50 % increase in its production year-on-year was made possible by its rapidly growing exports, which rose by 27.7 %.

MOTORCYCLES JAWA Moto at Týnec nad Vltavou, the only motorcycle manufacturer in the Czech Republic, made 1 228 motorcycles in 2016.

ATTACHED VEHICLES A total of 24 690 attached vehicles of all categories were manufactured in the Czech Republic in 2016. In comparison with 2015, the manufacture of trailers and semi-trailers increased significantly, by 1 232 (+5.3 %). In the O1 and O2 category, the largest proportion of attached vehicles made in the Czech Republic, totalling 22 636 vehicles (+4.5 %), was made by AGADOS. In the O3 and O4 attached vehicles category (trailers and semi-trailers), production rose by 264

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(+14.7 %) in comparison with 2015. Schwarzmüller manufactured 1 548 vehicles (+17.6 %), PANAV 506 (+6.7 %). The total number of road vehicles made in the Czech Republic in 2016 reached a record 1 375 814 units, an 8.2 % increase year-on-year. The automotive industry accounts for approximately one-fourth of the total domestic industrial production. The revenues of domestic automobile factories and suppliers of automobile parts and accessories in 2016 rose by 12 % to a record CZK 1.02 billion. The value of exports increased by 11 % to CZK 865 billion. Since 2009, export has been responsible for a six percentage point increase in revenue, which this year amounted to nearly 85 %. In the Czech Republic, one vehicle rolls oﬀ the lines every 23 seconds. A record 1.34 million automobiles were manufactured in this country in 2016. The number of workers employed in firms which are members of the Automotive Industry Association (AIA) has been around 118 000 over the past decade, with 400 000 more people working in related sectors. Average monthly gross wage in enterprises associated in AIA rose from CZK 22 591 in 2006 to CZK 34 820 in 2016. The average wage in the Czech Republic is CZK 29 300.

PROSPECTS ARE ALSO MORE THAN PROMISING In the first three quarters of 2017, car manufacture in the Czech Republic surpassed the one million mark, when it rose by 4 % year-on-year, to 1.059 million cars. Car exports increased by nearly 4 % to 971 262. In the same period, truck production grew massively, by more than 30 %, as did bus manufacture, an important sector, even on the European scale. The only vehicle sectors showing a decline in production yearon-year were motorcycles and attached vehicles.

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In 2016, total automobile production grew at roughly double the rate of industry as a whole.

D o i n g B u s i n e s s i n t h e C ze c h R e pu bl ic I I . C ze c h In du s tr y

VISION OF CHEMICAL INDUSTRY The Czech chemical industry is in a very good shape and is the third most important Czech manufacturing industry sector. In terms of revenue, value added and the number of employees, it accounts for 11–15 % of the total values of the manufacturing industry as a whole. Its attractiveness is also attested to by the relatively high proportion of foreign capital controlling a number of key enterprises, such as Unipetrol RPA Litvínov, BorsodChem MCHZ Ostrava and Hexion/Synthomer Sokolov. In 2016, the chemical industry, including oil processing and pharmaceuticals, turned out goods worth more than CZK 600 billion. After several years of stagnation, caused by the 2009–2012 crisis, industry is beginning to invest again. For example, Spolchemie a.s. has built a membrane electrolysis plant in Ústí nad Labem, Unipetrol RPA has enlarged its polyethylene plant, and BorsodChem MCHZ invested in a number of smaller plants in diﬀerent parts of the Czech Republic.

KEY SECTOR OF INDUSTRY Historically, the Czech chemical industry has been broadly linked with other sectors. Basic production for further petrochemical processing is concentrated in Unipetrol RPA in Litvínov. Ethylene, propylene, C4 fractions, aromates and other products are further processed in various plants across the country. Follow-up processing is carried out in Synthos Kralupy, Spolana Neratovice, BorsodChem MCHZ Ostrava, and Deza Valašské Meziříčí. Worth mentioning is cyanide processing in the Lučebné závody Draslovka Kolín and chlorine and lye production and processing in Spolchemie a.s. in Ústí nad Labem. The Sokolov Chemical Works specialising in acrylate chemistry is an important plant. It is a part of the supranational Synthomer corporation. Other important players are Synthesia and Explosia in Pardubice and Precheza Přerov.

TRENDS IN THE CHEMICAL INDUSTRY The chemical industry will continue to rely on fossil raw materials, i.e. crude oil and natural gas, although alternative raw materials will be increasingly coming to the fore, especially those of vegetable origin and products of waste processing. Today, no one can imagine life without chemical products, nor is the development of the

automotive, electronic, textile, and other industries imaginable without chemistry. However, recycling will be of special importance, especially in the plastics industry. For the Czech chemical industry, the most important partner will probably be the automotive sector, both as regards polymer materials for the manufacture of car interiors and exteriors and tyres.

POSSIBLE PITFALLS The main potential threat to the further development of the chemical industry in Europe, including the Czech Republic, is the extent of regulatory measures, which make it increasingly diﬃcult to do business in this sector. The European chemical industry is prepared to minimise its impact on the environment and reduce the risks involved in chemical production, but its competitiveness depends on analogical measures realised on the global scale.

MODERNISATION OF THE SECTOR The entire chemical production in the Czech Republic uses equipment meeting the strictest requirements, especially those stipulated by the 1996 IPPC Directive concerning integrated pollution prevention and control. This document was a challenge for the Association of Chemical Industry and its members. The Association acknowledges the principles laid down by the Responsible Care worldwide voluntary movement of the chemical industry. The positive approach of the chemical industry to people’s health, Nature and care for the environment has grown into a movement of social responsibility towards the sustainable development of the regions. As many as 53 member companies are entitled to use the Responsible Care logo. Four of them are secondary vocational schools and 11 are companies which won the ‘Sustainable Development Prize’ awarded by the Association.

TOPICAL SUBJECTS One of the most topical subjects is the lack of skilled labour. The chemical industry employs very experienced people, but, like all the other sectors, it is becoming aﬀected by generation change. Of greater importance for the future is the need for essential innovation and research, an area strongly supported from public resources, both Czech institutional ones and those of the EU. The aim is the applicability of the results of research and development in practice. In this respect, the Czech Republic is lagging behind the more developed economies, although 2 % of the country’s GDP is currently being invested in research and development (in comparison with 2.2 % in the USA, 1.8 % in the EU, 0.8 % in China, and 4 % in Japan).

VISION OF THE INDUSTRY 4.0 CONCEPT The Industry 4.0 Concept is an opportunity for raising the competitiveness of the European and Czech chemical industry and making it more eﬃcient. This will require improving the working skills in practically all working positions, while making better use of information and communication technologies. In view of the fact that the chemical industry is already now considerably automated and is using advanced control systems, no major decrease in the labour force is expected.

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CZECH BUILDING INDUSTRY ON AN OPTIMISTIC WAVE The Czech building industry is rebounding from the bottom, according to the Quarterly Analysis of Czech Building Industry 03/2017 of CEEC Research. Directors of Czech building companies foresee a 4.6 % growth of the sector achieved in 2017, which is much more than predicted by previous estimates. In 2018 the industry is expected to grow by another 3.8 %. The estimated growth of revenues is 5 %. Building companies are working at the level of 95 % of their capacity. Due to labour shortage, firms are obliged to refuse more than onetenth of the volume of contracts. The greatest shortage is felt in the worker and building manager positions. Building firms estimate that in 2017 building production will show a 4.6 % growth, nearly twice the previous prediction. “This growth is boosted by the continuing increase in the volume of public procurement. In the first months of this year, the volume of public procurement in construction increased by 95.1 % to the level of CZK 115.6 billion,” Jiří Vacek, Director of CEEC Research says.

OPTIMISM MAINLY IN BUILDING CONSTRUCTION

WORK EFFICIENCY WILL BE OF KEY IMPORTANCE “In 2017 the Czech building industry was doing well in comparison with previous years. After a long interval, both public and private investments are growing again. Unless public procurement becomes paralysed after the elections, 2018 should be a better year than 2017. In my opinion, work eﬃciency will be of key importance for the growth of revenues, as well as long-term contracting and employing more people so as to raise production capacity. It is in this

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Especially optimistic in their outlook for 2017 are building construction firms expecting a 5.4 % growth and small and medium-sized companies, with expectations of a growth of 4.9 %. Slightly more cautious in their estimates are civil engineering firms (3.3 % growth). In 2018, the sector is expected to slow down its growth to 3.8 % year-on-year, except big companies, which expect to grow by 4.2 % in the long run. “Of course I welcome the current situation in the construction market. Demand for material in all the divisions of Saint-Gobain is increasing, the same as the demand for solutions with higher added value as regards acoustics and thermal comfort. In spite of this, the pressure for materials’ price reduction continues and we also have to cope with growing costs of energy and input materials, in addition to the labour shortage. As a result, our turnover is growing more than our operating profit. Nevertheless, I am persuaded that we’ll end this year successfully, by meeting our plan and the expectations of the owner,” says Tomáš Rosák, Chairman of the Board of Saint-Gobain Construction Products CZ a.s., representative of one of the largest manufacturers of building materials in the Czech Republic. Petr Kašpar, Director of POHL cz, a.s., views the situation in a similar way: “The Czech building industry finds itself in the phase where companies have no worries about contracts, but suﬀer from an extremely great shortage of labour, which hinders their expansion plans. At the

same time, they welcome the currently low prices in the client/contractor relationship. Of key importance for the fulfilment of our plan next year will be to ensure the required production capacity, both on our own part and on the part of our subcontractors.” Building firms expect their 2017 revenues to show faster growth, by about 5 % on an average. The building construction sector, too, predicts a faster growth of revenues (by 6.5 %), with large building companies expecting their revenues to grow by 5.7 %. Civil engineering firms are rather pessimistic, expecting their revenues to grow by 2.7 %. Revenues will also continue to grow in 2018, by an estimated 4.2 % on an average.

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D o i n g B u s i n e s s i n t h e C ze c h R e pu bl ic I I . C ze c h In du s tr y

spirit that we are preparing for 2018, when we foresee a two-digit growth in revenues,” says Pavel Schlitter, Sales Manager of SITEL, spol. s r.o. At the time of the survey, i.e. in August and September 2017, building firms had contracts for 7.5 months ahead on an average, with large firms having their contracts secured for 8.6 months. Firms work at 95 % of their capacity, practically at the limit of feasibility, i.e. with minimum reserve. Building construction companies work at 97 % of their capacity.

COMPANIES SUFFER FROM WORKFORCE SHORTAGE Due to the workforce shortage, building companies have to reject some 14 % of the volume of orders on an average. Most affected by this shortage are small and medium-sized firms, which in 2016 had to refuse nearly one-fifth (17.9 %) of the volume of orders. Due to the labour shortage, some companies have even ceased making requests for tenders, or were forced to reschedule their delivery terms. “Most of our production capacity is filled up at the moment and I think that the demand for the services of building firms will also be relatively great in 2018. It is often difficult to find skilled workers who do not have excessive financial requirements,” says Karel Branda, Director of Trigema Building. Jan Kučeva, Director of Concrete Division, CEMEX in the Czech Republic, agrees by saying: “CEMEX confirms that the situation in the labour market is becoming increasingly complicated and that the lack of skilled workers, together with the rising cost of living, lead to a rapid increase in labour costs.” Companies wishing to increase their capacity in this situation would need an average of nearly 20 % more workers. The most needed categories of new employees are workers and construction managers. Only one-tenth (9 %) of building firms would need new administration workers. About 88 % of big companies are showing a shortage of construction managers. With a sufficient number of workers, building construction would be 16.1 % quicker, as estimated by the Directors. “The situation concerning the labour shortage is the same as that concerning contracts. If there is a shortage of contracts, we complain. If there are enough contracts, but labour is in short

supply, we complain again. Why don’t we admit we don’t know how to do business and prepare for market changes? Why are we afraid to admit that we do not know how to build a trademark and be attractive to skilled workers, and do not know how to build a portfolio of customers with whom we’ll be able to succeed even in times of need? Everyone knows how to sell in times of abundance, but in times of need only the best do. And it is the same in times of welfare, when only the best keep to the delivery terms. We others at least try, while the rest are seeking the reason outside their competence,” says Ivo Luňák, Manager of Tyros Loading Systems CZ s.r.o.

BUILDING INDUSTRY IN FIGURES In the 3rd quarter of 2017, building production in real terms was 2.6 % lower than in the previous quarter. Building construction increased by 3.7 % year-on-year, while civil engineering declined by 5.5 % year-on-year. Average nominal wages of employees working in the sector rose by 3.2 %, to CZK 34 773. At the end of the 3rd quarter of 2017, building companies with 50 employees or more had 19 800 contracts signed (+0.1 %). Those contracts involved work yet to be performed worth CZK 135 billion (-3.0 %). The number of flats completed in the 3rd quarter of 2017 increased by 13.9 % and amounted to 6 983. Building work is exported especially by firms with Czech capital. The best results have been achieved under contracts with firms in Norway, Poland, Russia, and Iceland. “Our building firms have very good experience with construction work in Slovakia,” explains Václav Matyáš, the Head of the Association of Building Entrepreneurs of the Czech Republic. This shows that, for the time being, Czech exporters in the building industry sector have the greatest chance of doing business within Europe.

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CZECH MEDICAL AND SANITARY WARE CONQUERS THE WORLD

The Czech healthcare system prides itself on a wide network of ambulatory healthcare facilities, hospitals and sanatoria run not only by the state, but also by private persons. As regards sanitary materials, medical devices and hospital equipment, Czech firms are among the world’s top manufacturers and suppliers. Their products go each year to a number of countries the world over. Besides the European Union, their goods are exported to the Russian Federation, countries of the Commonwealth of Independent States, Southeast Asia, the USA, and recently also to Africa. Czech firms score success primarily with their high added value products and equipment involving a high proportion of research work, electronics and informatics.

FULL RANGE OF SANITARY AND MEDICAL PRODUCTS Several Czech suppliers of sanitary and medical ware and equipment have become established in highly competitive foreign markets in the past few years. Their success is based on three factors: research leading to the achievement of high technical parameters, design, which helps to sell the products, and quality, which signifies the product’s reliability. All these criteria are met by, for example, medical instruments and traumatological implants, rehabilitation and transport equipment, medicinal and technical gas distribution systems, sterilisers, cobalt irradiators, anesthesia equipment, and positional hospital beds.

EMPHASIS ON QUALITY Many of the successful Czech exporters are members of the Association of Manufacturers and Suppliers of Medical Devices. The members of the Association collaborate with a number of research laboratories of Czech universities, for example the Czech Technical University in Prague, the Technical University in Brno, Tomáš Baťa University in Zlín, and Masaryk University in Brno. This testifies to the care the

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Czech manufacturers give to the quality, technical standard, and competitiveness of their products. Another organisation is CzechMed, Czech Association of Manufacturers and Suppliers of Medical Devices, which is also a member of the European association representing the medical technology industry. MedTech Europe, and CZEDMA, Czech Association of In Vitro Diagnostic Medical Manufacturers and Suppliers. Export trade in medical devices is showing a favourabe balance. The Association of Manufacturers and Suppliers of Medical Devices estimates that in 2016 import was worth CZK 20 billion and concerned mainly products for radiology and magnetic resonance, which are not made in the Czech Republic. The value of export is estimated at CZK 25 billion, where the largest items are operating theatre equipment and hospital beds, bedsore preventing mattresses, furniture, etc. Linet is the leading supplier of health and nursing care products. The firm bought a majority share in the company Borcad Medical, whereby it enlarged its range of beds, to which it added maternity and gynecological beds and dialysis chairs. Linet is not the only Czech firm which is doing well in foreign markets. Those firms are mostly companies whose production is closely linked with their own development, which indicates the way of how to win over rival firms. For example Ella-CS has developed and is manufacturing degradable reinforcement supports for the digestive tract. On the basis of own development, BMT Brno supplies a wide range of steam, hot-air, and chemical sterilizers, laboratory driers and incubators. ING corporation devotes itself to development, manufacture, and sale in the area of orthotics and prosthetics. BTL develops and manufactures devices for physical therapy, such as electrotherapy and ultrasound examination, lasers, magnetotherapy and lymphdrainage

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One of the sectors scoring remarkable success is the export of a wide range of sanitary material and hospital equipment. The success of Czech manufacturers of these products is based on the fact that the Czech Republic is a country with an advanced healthcare system covering all branches of modern medicine.

Medical, Laboratory and Pharmaceutical Engineering Excellence in

• Steam sterilizers • Hot-air and low-temperature sterilizers • Turn-key CSSD projects • Steam generators

• Satisfied customers in more than 100 countries of the world • Extensive world-wide sales and service network • We deliver devices that are subject to our customer’s wishes

Contacts

• Washer disinfectors • Laboratory drying ovens and incubators • Sterilizers for pharma industry • Medical stainless steel furniture

• Since 1921 BMT Medical Technology s.r.o. has already supplied thousands of own products to important and top-quality customers all over the world

www.sterilizers-bmt.com

BMT Medical Technology s.r.o. Cejl 157/50, Zábrdovice, 602 00 Brno Czech Republic

Tel.: +420 545 537 111 E-mail.: mail@bmt.cz Facebook: www.fb.com/bmt.cz

protecting human health

devices and other products. Ego Zlín is an important manufacturer and supplier of complete biological protection systems, logistic and decontamination systems and devices for urgent medicine and longterm care. MZ Liberec designs, manufactures, and installs medicinal and technical gas distribution systems and equipment for operating theatres.

RESEARCH AND DEVELOPMENT The European medical technology industry accounts for 30 % of world revenue. Such development is very positive for Europe as it helps different healthcare systems raise their efficiency. New medical technologies enable more efficient therapy, help to shorten stays in hospitals and bring better results in treatment. In addition, quicker follow-up rehabilitation returns the patient sooner to normal life activities. Such development would not be possible without the manufacturers’ investments and their close cooperation with specialists. It is therefore gratifying that Czech firms, too, are favourably inclined to research and development. Firms coming under the NACE 32.5 section – manufacture of medical and dental instruments, which were accorded large amounts of money from the state budget in the framework of the national programmes of the Ministry of Industy and trade (IMPULSE, TIP, TRIO) and TA CR (Alpha, Centres of Competence and Epsilon) in

Photo: Linet archives, CzechTourism archives, David Marvan

REGISTRATION IN THE CZECH REPUBLIC Persons wishing to register their business activities, for example distribution of medical devices in the Czech Republic (in compliance with the obligation to register in the sense of section 26 of Act 268/2014 Coll.), are required to ﬁle an application for entry in the medical devices register. The application must be made on a form available at http://eregpublic.ksrzis.cz/Jtp/public/ExerniZadost?s=RZPRO

the years 2014–2016, include, for example, Medical Technologies CZ a.s., MEDIN, a.s., and TL Medical Technology, a.s., as well as Woodcomp Propellers s.r.o., which is one of the participants in the project ARGOS (Horizon 2020). In 2015–2016, a grant of CZK 160.5 million was awarded to research, development, and innovation projects in the category CZ-NACE 32 in response to calls made under the Enterprise and Innovation Operational Programme for 2014–2020. The money was distributed among about thirty enterprises across the Czech Republic. The largest sum was awarded to ARROW International CR, a.s., a big company based in the Hradec Králové Region (Putting an innovated series of catheters in production). The second largest sum was accorded to SPRINT 202 TRADING s.r.o., a small enterprise in the Moravia-Silesia Region (Project of a new development and innovation centre). The third largest recipient is a medium-size company, MZ Liberec, a.s. (New generation multifunctional medicinal units system with the possibility of automatic setting). Most of the projects obtaining support were those of small and very small enterprises.

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D o i n g B u s i n e s s i n t h e C ze c h R e pu bl ic I I . C ze c h In du s tr y

TOP QUALITY AND EXQUISITE DESIGN OF BOHEMIAN GLASS AND CERAMICS Glass- and ceramics-making is a traditional sector of the Czech manufacturing industry. During its long existence, this sector has undergone periods of ups and downs; nevertheless, it can be said that the domestic glass and ceramics industry has overcome the past transformation problems and the impacts of the global economic recession with honours. The Czech glass industry has changed significantly over the past few years. The sector is now stabilised and the firms have won new contracts. The result is overall stabilisation, with the glass sector being inspired with new life. The glass and ceramics industry is directly linked to the situation in other sectors (construction, the food and the chemical industries, the automotive industry, etc.). The Czech glass industry is export oriented and is directly influenced by the economic and political changes in the world, especially in the European Union, to which 70 % of glass export are targeted. Flat glass, packing glass and glass fibre export to the EU even account for 90 % of total output. A diﬀerent situation is in utility glass, of which 47 % go to the EU, with the remaining 38 % being exported to the rest of the world, i.e. to some 80 countries, and 15 % of the output to the rest of Europe, mainly Russia. The European Union as a whole is the world’s largest glass manufacturer. The Czech glass industry is a smaller manufacturer accounting for approximately 4 % of production. The largest manufacturer is Germany with a 20 % share, followed by France (14 %), Italy (13 %), Spain, and the UK. In the Czech glass industry there is a higher proportion of handmade glass (utility glass, costume jewellery semi-finished products) than in the rest of the European Union, where fully automated glassware production prevails. In 2016, revenues in the glass industry were by 0.4 % higher than in the previous year in nearly all the glass industry sectors. The share of flat glass was 44.0 %, that of other glass groups 17.0 %; glass fibres and products thereof accounted for 17 %, packing glass for 10.0 % and utility glass for 12.0 %. The revenues in the porcelain and ceramics sectors under review increased by 3.65 % in comparison with the previous year. The share of utility porcelain and ceramics was 23 %, that of technical and sanitary ceramics 77 %. Employment in the glass and ceramics industry

in 2016 increased by 2.7% in comparison with 2015, of which the increase in the glass industry showed a 2.76 % (+539 persons) growth and in the ceramics industry a growth of 2.65 % (+104 persons). The number of workers in the diﬀerent sectors varies year on year. In the flat glass sector, for example, the growth depends on demand in the automotive industry and in construction. Average wages grew in most production sectors. The wage differentiation between mass-production sectors and sectors with fully automated production is growing. This concerns flat glass production and processing (CZK 33 172), the manufacture of glass fibres and products thereof, and packing glass, as well as sectors with frequent changes (shorter production series), including automated production, and a certain proportion of manual production.

SOME OF SUCCESSFUL CZECH FIRMS:  F LAT GLASS

The only manufacturer of large-size flat glass in the Czech Republic is AGC Flat Glass Czech, a.s., a member of the AGC Group, based

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in Teplice. This company is currently the largest manufacturer of flat glass and its applications in Central and Eastern Europe. The one-hundred per cent owner of the company is Asahi Glass Co. Ltd., Japan. The production programme of AGC Flat Glass Czech, a.s. comprises the manufacture of basic flat float glass, either transparent or in shades of green. By further processing, the glass is made into low-emissive glass adjusting light and energy emission, safety glass, glued or tempered, sound insulated, matted or varnished glass for exterior and interior use, and mirrors. In the Czech Republic, a large quantity of flat glass is processed by the AGC automotive division, specifically AGC Automotive Czech, a.s., based in Chudeřice u Bíliny. AGC Automotive Czech, a.s. makes tempered and layered safety glass mainly for cars, lorries, and buses, including additional applications, or extruded plastic profiles and applications of additional components (scuﬀs, pins, connectors, holders, etc.). AGC Automotive Czech, a.s. makes and sells some 25 million car glass pieces a year and is one of the largest and most comprehensive manufacturers in this line of production in Europe. Many more firms processing flat glass into special products operate in the Czech Republic, such as: Saint-Gobain Sekurit ČR, spol. s r.o., Hořovice, making car glass; Pilkington Czech, spol. s r.o., Noviny pod Ralskem, making construction glass, Amirro, s.r.o., Čelákovice, specialising in making mirrors and furniture glass; ERTL GLAS, s.r.o., Říčany, manufacturing energy-eﬃcient layered safety glass; WMA–Glass, s.r.o. Chrastava, making insulating glass; Bepof spol. s r.o. Hranice u Aše, processing flat glass and mirrors; etc. In addition to the above-mentioned companies, there is a large number of wholesale firms selling products and providing services concerning refined flat glass.

P  ACKING GLASS

Dominant manufacturers of packing glass in the Czech Republic are the companies O-I Manufacturing Czech Republic, a.s. with the trading company O-I Sales and Distribution Czech Republic, s.r.o., Dubí u Teplic, which are members of the Owens-Illinois (the USA) multinational group, and VETROPACK MORAVIA GLASS, a.s., Kyjov, which is a part of the Vetropack Holding AG multinational group based in Switzerland. These two groups hold an approximately 80 % share of the packing glass market in the Czech Republic. G LASS FIBRES AND PRODUCTS THEREOF

The only manufacturer of textile glass fibres and products thereof in the Czech Republic is SAINT-GOBAIN ADFORS CZ, s.r.o. Litomyšl. The only Czech manufacturer specialising in the manufacture of glass fibre thermal and sound insulation products in the form of mats and panels (ROTAFLEX Super®) is Union Lesní Brána, a.s., Dubí u Teplic. Insulating material based on glass wool

CRYSTAL GLASS IN MODERN DESIGN

INSIDE GILDED CUT CRYSTAL

We oơer traditional handmade Bohemian Lead Crystal 24%PbO Titanium. In conjunction with this new proprietary technology and the skills of our glassmakers, decorators and cutters, we can reach a unique optical quality in our products. We also oơer a wide range of handmade cameo crystal in many traditional colour variations. Our new 2018 collections will introduce wholly new colour shades. We decorate traditional cut crystals with gold. We have our own patented technology of inside gilding. We work with prominent glass designers to produce custom made luxurious lights, lightways, crystal sculptures, sport trophies and designer domestic crystal products.

Merry Crystals s.r.o. | Cholupická 911/5 | 142 00 Praha 4 | Czech Republic lenka.rackova@merry-crystals.cz | Tel.: +420 602 491 331

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www.merry-crystals.cz

beauty of glass Joint-stock company Glassworks Moravia, residing in Úsobrno is a traditional manufacturer from 1827 and dealer of packing glass: • • • • •

alcohol and liqueur bottles wine bottles bottles for food products laboratory glass (reagent bottles, powder bottles, dropping bottles, burette bottles) cosmetic bottles

All products in transparent, brown and black glass color, with capacity ranging from 30 ml to 2 500 ml, with maximum height of 390 mm. The core of our philosophy is customer-oriented service, stressing the fulfillment of customer‘s wishes and requirements in the first place. We specialize in producing bottles and glasses that are shaped originally according to customer‘s requirements. We produce these in series from 10 000 pieces. Our offer includes also a wide range of services: we provide devising new designs, drawing documentation, packaging according to specific requirements and other deliveries necessary for completing the products. In case our customer is not interested in investing into dies, we are able to offer standard models.

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

D o i n g B u s i n e s s i n t h e C ze c h R e pu bl ic I I . C ze c h In du s tr y

in the form of panels and rolls is made by KNAUF INSULATION, spol. s r.o., Krupka u Teplic. The plant in Krupka is one of the most advanced plants making mineral insulation products based on glass wool in Europe.

Photo: Bomma archives

U TILITY GLASSWARE

In the Czech Republic, there are about 30 firms with more than 20 employees whose core business is utility glass production. The largest of these are Crystalex CZ, s.r.o. with its manufacturing plant in Nový Bor (machine production of utility soda potassium glass), Crystal BOHEMIA, a.s., Poděbrady (lead crystal), and CRYSTALITE BOHEMIA s.r.o., Světlá nad Sázavou. There is also a number of smaller firms with a rich and varied production programme – art glass, cut lead crystal, utility glass decorated with paint, pen-and-ink drawing, glazing, high enamel, and engraving, hand-made utility glass, historical replicas, blown glass, etc., such as the firms of Ajeto spol. s r.o., Czech Glass Craft, Lindava, Blažek Glass, s.r.o., Poděbrady,

CAESAR CRYSTAL BOHEMIAE, a.s., Světá nad Sázavou, SKLÁRNA SLAVIA, s.r.o., Nový Bor, Královská Huť, s.r.o., Doksy, EGERMANN, s.r.o., Nový Bor, BOHEMIA MACHINE, s.r.o., Světlá nad Sázavou, and many others. OTHER GLASS

The dominant Czech manufacturer of technical and laboratory glass, tubes and apparatus made of borosilicate glass is KAVALIERGLASS, a.s., Sázava. Other technical and laboratory glassmakers are TECHNOSKLO, s.r.o., Držkov, EXATHERM, s.r.o., Železný Brod (glass thermometers and densimeters), Detesk, s.r.o., Železný Brod (borosilicate technical glass) and other smaller firms. From among optical glass manufacturers, the best known is, for example, ECOGLASS, a.s., Jablonec nad Nisou, specialising in the manufacture of precision pressed components for electro optical instruments. VITRABLOK, s.r.o., Duchcov makes glass blocks for construction.

INVESTMENT IN THE GLASS INDUSTRY In 2017, the American concern Owens-Illinois invested CZK 700 million in the modernisation of a factory in Dubí, Teplice Region, in order to strengthen the ﬁrm’s leading position on the domestic market. Three years ago, the ﬁrm made a similar investment in its other factory at Nové Sedlo in the Karlovy Vary Region. There, the investment in the modernisation of one glass tank amounted to CZK 260 million. In its two Czech factories the company will be making more than 206 million bottles a year, which involves some 62 500 tonnes of glass.

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Ornex Ltd Traditional mouth-blown and hand-painted Christmas tree decorations from the Czech Republic have been a Christmas symbol for decades. Ornex, spol. s r.o., a company founded in 1991, creates a seasonal collection of Christmas tree decorations each year, reflecting current fashion trends, customs and the requirements of customers from Europe and overseas. Special emphasis is on firstclass workmanship.

Ornex Ltd Turnovskรก 2424/22 466 01 Jablonec nad Nisou Czech Republic | info@ornex.cz www.ornex.cz

D o i n g B u s i n e s s i n t h e C ze c h R e pu bl ic I I . C ze c h In du s tr y

UTILITY PORCELAIN AND CERAMICS

This category of utility porcelain comprises a whole range of products, from items for everyday use to luxury porcelain, utility and decorative pink porcelain, porcelain with the blue onion pattern and figural porcelain. Important porcelain makers are the companies Thun 1794, a.s., Nová Role, Český porcelán, a.s., Dubí, G. Benedikt Karlovy Vary, s.r.o., Rudolf Kämpf s.r.o., Nové Sedlo, and König-Porzellan Sokolov, spol. s r.o., Sokolov. A number of more specialised smaller manufacturers make utility ceramics. The largest among them is the KERAMO cooperative in Kožlany, making interior artistic ceramics, and Keramika Krumvíř, spol. s r.o., Krumvíř. Ceramic tiles are made by KERAMIA, s.r.o., Znojmo. TECHNICAL AND SANITARY CERAMICS

Two major Czech sanitary ceramics manufacturers are LAUFEN CZ, s.r.o. (with manufacturing plants in Bechyně and Znojmo), a member of the Roca Group, and Ideal Standard, s.r.o., Teplice. Both manufacturers are strongly export-oriented and consequently their marketing success is considerably dependent on how the building industry in Europe is faring. Important manufacturers of technical porcelain are Elektroporcelán Louny, a.s. making insulators for the power industry, Jizerská porcelánka, s.r.o., Desná in the Jizerské hory Mountains, which manufactures laboratory porcelain and porcelain tubes, and ELPOR, s.r.o., Krupka Bohosudov. OVENS, MACHINES, AND EQUIPMENT PLUS EXPERT SERVICES FOR THE GLASS

AND CERAMICS INDUSTRIES There are approximately 40 to 50 independent firms in the Czech Republic making furnaces, machines and equipment, glass moulds and instruments used in glass and ceramics making and firms providing services, project designing, and expert consulting for those sectors. Companies developing their own production and business activities significantly exceeding the country’s borders include several machinery manufacturers, such as Sklostroj Turnov CZ, s.r.o., making machines and equipment for automatic packing glass production, SKLOPAN LIBEREC, a.s., which specialises in flat glass processing, and SKLÁŘSKÉ STROJE ZNOJMO, s.r.o., supplying various glassmaking machines. Machines and equipment for glass fibre production and processing are manufactured by TRIMA, spol. s r.o., Turnov. Important foreign activities in the area of design and control systems for glass melting machines are pursued by GLASS SERVICE, a.s., Vsetín, and DITES, spol. s r.o., Teplice (automated technological process control systems). Gas-based melting furnaces and auxiliary furnaces for manual glass production are manufactured by EGT servis, s.r.o., Hradec Králové.

Photo: Bomma archives

INNOVATION AND ORIGINALITY OF CZECH MAKERS The firm Lasvit, founded by Leon Jakimič in 2007, specialises in the manufacture and installation of lighting fixtures, glass artworks, art elements and objects. Its collections, winners of a number of prizes, have made a breakthrough in the world of design and revived the famous Czech glassmaking tradition. The company’s aspirations are to make exquisite lighting fixtures and glass objects for a discerning clientele all over the world. Lasvit has added new freshness to its products and started a new era of Czech glassmaking. Lasvit combines authenticity and tradition with innovative technologies, creativity and precision craftsmanship, augmented by its close collaboration with famous glassmakers and designers, such as Nendo, Ross Lovegrove, Daniel Libeskind and Maarten Baas, as well as Czech legends, specifically René Roubíček and Bořek Šípek. In a relatively short time, the firm has managed to build a perfect reputation for itself and win the respect of the expert community, as shown by the

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long list of its important foreign clients. Original glass installations and sculptures bearing the Lasvit trademark are to be seen in public places and spaces of prestigious hotel chains and business complexes (e.g. The Ritz-Carlton Residences in Singapore, Hyatt Capital Gate in Abu Dhabi, The Shangri-La Bosphorus in Istanbul, Four Seasons in Moscow, Quadrio in Prague, Sake No Hana Restaurant in London, The New York Palace Hotel, etc.), as well as in luxury and private residences all over the world. One of the best known designers in the Czech Republic is Rony Plesl, famous for his innovative glass design and interesting stone sculptures, as well as interior designs and drawings. Currently Pleslâ&#x20AC;&#x2122;s attention is focused on uranium glass, the production of which has been suspended in most European glassworks. Besides uranium glassmaking, Plesl collaborates with glass manufacturers, such as Moser, Barovier, Ajeto and KvÄ&#x203A;tnĂĄ, and with the German firm of Sahm. As designer, he collaborates with Denizli by Pasabahce, Turkey, and Preciosa, the Czech Republic. Evidence of his brilliance in the area of glass design is the fact that his art is represented in a number of art collections. His works are to be found all over the world, including, for example at Walt Disney World, where many glass sculptures by Rony Plesl are installed, or Hamburg, Germany, where a glass tower designed by Plesl is to be seen. Martin JaneckĂ˝ is a real master of glass art. No one else in the world has created such amazing glass sculptures like him. He is what we could call a glassmaker and sculptor in one. He needs no moulds to make the wonderful objects â&#x20AC;&#x201C; he simply shapes the blown out glowing matter by hand. He is represented by one of the most prestigious galleries in the USA and his works are gems in Elton Johnâ&#x20AC;&#x2122;s collection.

Bomma is really one of the few glassworks in operation, if not the only one, which came into being in the Czech Republic after 1989. It was built at SvÄ&#x203A;tlĂĄ nad SĂĄzavou and at that time employed workers from a nearby glassworks, which closed down after a century-long glassmaking history. Bomma opened in June 2012. Today, it is a successful glassworks using the most up-to-date technology, which would hardly find a parallel anywhere else in the world. It manufactures the purest Bohemia crystal. From the outset, great stress has been placed on perfect workmanship and fine artistic rendering, innovative technology, and modern design. At first it chose as its core programme tableware production, which is a relatively demanding sector as regards sales. It found a great potential in Czech design and lighting fixtures production. BOMMA collaborates with important Czech and foreign galleries, such as Judistka Teatern in Stockholm, Hauser and Wirth in Zurich, Encore Glass in California, Bulthaup Gallery in St. Petersburg and others.

STRIAGRAPH â&#x20AC;&#x201C; STRIATTER 1000TM state-of-the-art appliance for imaging and recording imperfections in glass Striatter 1000 striagraph is a device that automatically provides a striagram of a glass sample. A striagram is a record of streaks, bubbles and other inhomogeneities in the thickness of glass scanned along the sample. It is not necessary to darken the room to evaluate the sample. Striatter 1000 is designed for glass samples with a thickness of 2 to 12 mm and width of up to 25 mm. The striagram of the whole width of the produced strip of glass (up to 8000 mm) is completed by gradual measurement of several samples of glass of a maximum length of 1000 mm. The glass sample is inserted in a glass container filled with immersion fluid at the top of the striagraph. The operator enters data about the test and the sample in the computer and then runs the automatic evaluation. The optical system moves along the measured sample and individual shots are recorded. After the scanning is completed, the data are automatically evaluated, individual images are compiled, and the test protocol is created. NEWTE spol. s r. o., -DWHĂžQt 7HSOLFH &]HFK 5HSXEOLF 7HO )D[ ( PDLO QHZWH#QHZWH F] www.newte.eu

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III.

CZECH INDUSTRY

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 temporarily provision of services based on the trade licenses issued in such member state. 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.

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.

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 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 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.

PRACTICE OF AGRICULTURE The third type of natural persons encompasses persons who practise agriculture and who are registered under a special regulation – the

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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.

D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic III. How to Do Business in the C zech Republic

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

EARNINGS

EXPENSES

PROFITS

LOSSES

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 notorial deed of a Czech notary. The notary fee usually does not exceed CZK 5 000 (EUR 180) and is depending on the amount of the registered capital. In case of basic Memorandum of Association which contains only the mandatory provisions required by the Civil Code and Business Corporations Act und if all contributions to the registered capital will be monetary and registration of the company to the Commercial Register will be performed by the notary, the notary fee was decreased to CZK 2 000 (EUR 75). 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), list of the 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 (EUR 40).

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.

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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 2 700 (EUR 100), if the registration is performed by the notary on the basis of the notarial deed which would contain only mandatory provisions and all contributions to the registered capital of the Company would be monetary, the registration of the company is for free. 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

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MICHAEL NOVÁK rutland ježek, advokátní kancelář s.r.o. E-mail: mnovak@rutlandjezek.com

Photo: www.pixabay.com, www.sxc.hu

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

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.

D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic 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 corporations 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, amount of the registered capital, number of votes attached to an individual share, the total number of votes in the company and 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 (EUR 40).

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 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 weighting 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 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.

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

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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 equals to the amount of CZK 12 000 (EUR 450). The fee amounts to CZK 8 000 (EUR 300) only if the registration is performed by the notary. Irrespective 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 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 they are 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

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. Notifiable trades are characterised by the fact that the authorisation to trade becomes valid immediately at the very moment of notification (not later 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

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such as providing or brokering consumer credit, work 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 to also meet some additional requirements. Trades that require concessions 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

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STEPS FOR ACQUIRING A CZECH TRADE LICENCE

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 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 Members 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 1 000 CZK (EUR 40) for a notifiable trade (if multiple trades are notified simultaneously, the fee is charged only once) must be sumbitted. A 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. ELIŠKA Č ÁSLAVSKÁ rutland ježek, advokátní kancelář s.r.o. E-mail: ecaskavska@rutlandjezek.com

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MOST IMPORTANT CHANGES IN CZECH LAW FOR ENTREPRENEURS IN 2018 In 2018, a number of changes for entrepreneurs will come about. These will affect, for example, builders, register of beneficial owners of legal entities, and unified electronic identification. REGISTER OF BENEFICIAL OWNERS OF LEGAL ENTITIES Commencing from 1 January 2018, records of data on beneficial owners of legal entities will be maintained in the Czech Republic. A beneficial owner is to be considered any natural person that has the possibility to either directly or legally exercise factual influence within a given legal entity, with more detailed rules being set for individual types of legal entities. These records will be kept at the registry courts, which will collect the names, addresses of the place of residence, birth dates and birth numbers, nationality, and facts forming basis of their status as beneficial owners, whether it be a share in the voting rights, distributed funds, or otherwise. The application for registration of the beneficial owner will be required to be filed by the legal entity itself, which will be obliged to keep the internal list of owners independently of the public records. The data will not be publicly available, but the range of people and authorities accessing it will be quite broad.

STATUTORY PREEMPTIVE RIGHTS IN CONNECTION WITH IMMOVABLE PROPERTY From 2018, the statutory pre-emptive right of co-owners to immovable property will be valid once again. The pre-emptive right shall again apply to all transfers, except for the transfer of interest to a close person (e.g. a relative). The pre-emptive rights will not apply to any items other than immovable property. Co-owners will be able to waive their pre-emptive rights. Such a waiver will also have an effect on legal successors of the waiving co-owner (i.e. the subsequent owners of the original co-owner’s interest). Information that a co-owner has waived the pre-emptive right will be entered in the Cadastral Register. The threeyear status since 2014, where property co-owners could not influence who their new co-owner would be, will end in 2018. The co-owners of immovable

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GDPR  GENERAL DATA PROTECTION REGULATION Similarly as in other EU countries, the so-called General Data Protection Regulation (GDPR) will also come into eﬀect in the Czech Republic as of 25 May 2018. Through it, the EU authorities plan to strengthen and unify the protection of personal data of all individuals within the EU, and to further regulate the transfer of EU citizens’ personal data beyond its borders. For non-EU entities handling data of EU citizens, the GDPR should facilitate compliance with the Member States’ to-date varying national laws. In the first half of 2018, a new act on the protection of personal data will most likely be adopted in the Czech Republic, which will repeal the existing Act No. 101/2000 Coll. and specify certain obligations and rights arising from the GDPR. New data will be explicitly considered to include, inter alia, IP addresses and cookies. Persons will have the right to data transferability (portability) within the scope of which they will be able to obtain a copy of the processed personal data, and transfer it to another service provider. Individuals will also have the so-called right to be forgotten – RTBF, and may demand the removal of certain personal data from search engines. These rights are also in line with the wider obligations of Internet entrepreneurs. Businesses will have to report, among other things, within 72 hours of detection any leakage of personal data to the supervisory authority and, in some cases, to the client. Another obligation of entrepreneurs will be the adequacy, respectively the obligation, to minimise the volume of processed personal data by permanently deleting data that are no longer necessary, and to which, for example, the client’s consent does not apply. The GDPR also fixes the obligatorily established position of the so-called Data Protection Oﬃcer (DPO). In some Member States, this position is or has been previously known of, but in the Czech Republic, it is an entirely new position.

D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic III. How to Do Business in the C zech Republic

property will thus be able to once again prevent, as of 1 January 2018, the transfer to an unwanted person by exercising their pre-emptive right. However, this does not affect transfers to close persons.

AMENDMENT TO THE BUILDING ACT From 1 January 2018, an amendment to the Building Act will enter into force, which will, among other things, represent significant process acceleration and streamlining for builders. Zoning and construction proceedings may be combined into one co-ordinated procedure in more situations than ever before. The environmental impact assessment (EIA) process will also be included in the co-ordinated procedure, and the binding opinion of the competent authority will be issued as part of this procedure. For the builder, however, the possibility of combining the zoning and construction proceedings is only a possible alternative, it is not a compulsory procedure, and so the previous two separate proceedings may still be chosen.

COMPENSATION FOR DAMAGE IN THE FIELD OF COMPETITION The new Czech Act on Compensation for Damage in the Field of Competition, which transposed the 2014 European Directive at the end of 2017, should facilitate the recovery of damages caused by the restriction of competition. This

includes, for example, a longer limitation period for the exercise of the right to compensation, which lasts for 5 years, and starts to run from the day on which the entitled person became aware of the damage, but at the earliest on the date on which the restriction of competition has been brought to an end. The law simplifies claiming damages for an injured party by allowing them to demand access to any evidence at the responsible party’s disposal prior to the opening of proceedings. The court may penalise a failure to submit the requested documents by a fine of up to CZK 10 million, or 1 % of the net turnover of the last completed accounting period for the person who has violated this obligation imposed by the court, rendered it impossible, or significantly hindered it. Although this obligation is also generally applicable to documents collected in the file of the Antimonopoly Office, it is significantly limited in relation to those documents, in particular as concerns the self-incriminating documents submitted by the cartel participants under the so-called Leniency Programme. The damage is to be reimbursed in its entirety, because the objective is to return the injured person to a situation in which he or she would be located if the competition law violation had not occurred, and therefore involves both compensation for actual damage and loss of profits and interest. However, compensation for damage must not lead to overcompensation.

UNIFIED ELECTRONIC IDENTIFICATION FROM 1 JULY 2018 The Electronic Identification Act, adopted at the end of 2017, will allow a simple, secure, and state-guaranteed way of proving the user’s identity on the Internet from 1 July 2018, while at the same time helping to develop and ease the use of online public administration services. The Act is directly linked to the European eIDAS Regulation (on electronic identification and trust services for electronic transactions in the internal market). Thanks to this Act, it will be possible to prove one’s identity even remotely, by electronic means. MOJMÍR JEŽEK rutland ježek, advokátní kancelář s.r.o. e-mail: mjezek@rutlandjezek.com

LEASE OF BUSINESS PREMISES The New Czech Civil Code regulates 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.

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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 without objections. In particular cases termination without the notice period is possible; by the landlord in cases of particularly serious breaches of the lease 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 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 of signage, provided the landlord has given his consent. The landlord may only withhold his 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.

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 gave 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

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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. 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 such 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 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

D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic III. How to Do Business in the C zech Republic

INVESTMENT INCENTIVES IN 2017 AND 2018 Companies introducing new or expanding the current production may apply for a tax holiday under some conditions. Moreover, there is also support available for technology centres and strategic services centres. What do the rules and conditions look like? What will the situation after 2018 be like? FORMS OF THE INVESTMENT INCENTIVES AND SUPPORTED ACTIVITIES Currently, the available forms of investment incentives are income tax relief, cash grant for new job creation and employee training, and support for strategic investment activities. Beside this, the incentive in the form of an exemption from real property tax in concessional industrial zones have been introduced by the Ministry of Industry and Trade. Moreover, there is also an opportunity to draw cash grant on the territory of these zones for creating new jobs in the amount of CZK 300 000 per a new job created. Within the manufacturing projects, there are three types of supported activities 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 requested for projects involving construction or expansion of centres for shared services, data centres, and customer support centres.

SELECTED CONDITIONS The general conditions which must be met in order to qualify for the

incentive are different, based on the type of the supported activity. Among others, for the manufacturing projects following general conditions apply:  At least 20 new jobs must be created that are related to the investment project;  Investment of at least CZK 100 million and at least half of the investment must be spent on acquisition of new machinery equipment  The company cannot start any work on the project prior the submission of the application;  Limitations for projects of relocation (i.e. transfer of the same or similar activity if the product or service in the initial and in the aided establishments serves at least partly the same purposes and the same type of customers and jobs are lost in the same or similar activity in the EEA);  Fulfilment of the conditions until 3 years from granting of investment incentives. The conditions in the case of technological centres and strategic service centres diﬀer based on the type of the centre. Basically, there is always a minimum amount of new jobs (20–500) to be created and in the case of technological centres the minimum amount of CZK 10 million to be invested.

STATE AID LEVEL The general level of public support is 25 % of eligible costs. Financial support for the creation of new jobs and for employee training or retraining in the regions with the unemployment rate higher than 25 % is as follows:  Financial support for creation of new jobs of CZK 100 000–300 000 depending on the region;  Financial support for training and staﬀ retraining of 25–50 % of training costs depending on the region. Financial support for acquisition of tangible and intangible assets for strategic investment (500 new jobs created and investment at least

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CZK 500 million in manufacturing industry; 100 new jobs created and investment at least CZK 200 million for technology centres) is in the amount of 10–12.5 % of the eligible costs. There is also one important rule related to the accumulation of support in a 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 is administratively and time demanding.

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 environmentally 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. Moreover, 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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SELECT PROVISIONS OF THE INCOME TAX ACT Since investment incentives especially involve corporate income tax relief, there are some special conditions to be met stipulated by the Income Tax Act (“ITA”). The special conditions basically include tax base minimising, rule of the first ownership of the assets in the Czech Republic, merger/liquidation restriction, transfer pricing restriction, transfer of assets (or part thereof) owned by related parties restriction, etc. Regarding the tax base minimising, 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. ITA also sets conditions for the calculation of tax relief through the S2 comparable tax base (tax base benchmark) in the case of expansion projects. The S2 base is equal the arithmetic mean of the tax amount calculated for the tree taxable periods immediately preceding the taxable period for which the tax credit may be claimed for the first time. And another important rule stipulates that the payer may 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 is necessary, among other things, to assess the fulfilment of selected conditions so that the already utilised tax relief is not put at risk.

SITUATION AFTER 2018 There is an amendment of the investment incentives act planned for 2019 favouring support of research and development and small and medium-sized enterprises. The possibility to obtain investment incentives for standard expansion of production for large enterprises should be significantly limited, i.e. additional conditions will be implemented as only projects with higher added value should be supported. KARIN OSINOVÁ KPMG Česká republika s.r.o. E-mail: kosinova@kpmg.cz

D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic III. How to Do Business in the C zech Republic

THE CZECH REPUBLIC: NEW ACT ON PUBLIC PROCUREMENT The new Act on Public Procurement entered into force on 1 October 2016. The bill was subject to heated discussions on both the governmental and parliamentary level. The opposition criticised the regulation for allegedly relinquishing state control over public procurement, potential corruption, and overall complexity of the rules. Government parties, on the other hand, rejected the objections and praised the legislation as a flexible tool for effective procurement. It remains to be seen in the coming years which side was right. Regardless of the diﬀering opinions on the future eﬀects of the new Czech legislation, the Act for the larger part reflects the new European Directives of 2014. The Directives themselves give considerable freedom to the contracting authorities with the aim of relaxing the rules and simplifying procurement procedures for the benefit of both the authorities and suppliers. The changes introduced by the Czech legislator concern mainly the public procurement regime for contracts, which are below thresholds specified by the Directives and are therefore out of their scope. This article pinpoints some of the major changes introduced by the new Act.

I. IMPROVING MARKET ACCESS FOR SMES One of the key goals of the new Directives as well as of the Act on Public Procurement is to open more procurement procedures to small and medium-sized enterprises (i.e., companies with a maximum of 250 employees). To understand the importance of this aim, it is good to look at the numbers. In the Czech Republic, SMEs currently perform 70 % of public contracts, representing approximately 50 % of the public procurement market value. Despite their size, small firms are a vital part of the economy: they employ a substantial number of people, generate GDP growth, and promote entrepreneurship and innovation. Small enterprises, however, often lack the economic or personal resources or know-how necessary to compete for larger contracts. Furthermore, a number of bureaucratic burdens increase the cost of sole participation in the public procurement process. The new Act on Public Procurement adopts the following measures in an attempt to make public contracts more accessible to SMEs.

Firstly, the new public procurement rules encourage the contracting authorities to divide the contract into lots where possible. Even though the former Public Procurement Act also allowed this practice, the new law makes it apparent that it should be the preferred approach. The contracting authority is obliged to assess whether a separation is possible. If the contracting authority decides to procure the contract as a whole, it must explain its choice in the individual report or procurement documents (the so-called apply or explain principle). Nevertheless, the division of the contract into lots has not been made mandatory in the Czech Republic, even though the Directives allow such possibility. Secondly, a turnover cap has been imposed in relation to the financial capacity of the suppliers: the required minimum annual turnover must not exceed twice the estimated value of the contract. Thirdly, the new Act removes some of the administrative obstacles related to proving a supplier’s qualification. Under the former regulation, all suppliers had to provide the contracting authority with various certificates issued by public authorities concerning, for example, the non-existence of grounds for exclusion or fulfilment of selection criteria. Under the new Act, suppliers may replace such certificates with a so-called European Single Procurement Document, which is an aﬃdavit stating that the supplier meets the required qualification. The ESPD is a standard form available online and serves as preliminary evidence. Only the selected supplier is obliged to provide the contracting authority with physical evidence. Finally, the new law aims to protect subcontractors (especially SMEs) from secondary insolvency by allowing them to demand and receive direct payments, if provided for in the procurement documents. The contracting authority may lay down conditions under which it will transfer payments due under the contract directly to sub-contractors.

II. REFORMING THE PROCUREMENT OF SERVICES: NEW EXCLUSIONS AND “LIGHT” REGIME Along the lines of the European Directives, the new Act on Public Procurement abolishes the distinction between the so-called priority and non-priority services. Formerly, priority services contracts had to be published in the Official Journal of the European Union, whereas non-priority services contracts were not subject to obligatory publication. The new rules considerably simplify the procurement of certain contracts for services. Apart from services subject to the full procurement regime, the Act on Public Procurement distinguishes between the following types of services:  services exempt from the public procurement regime. The contracting authority can procure certain services outside the procurement procedure prescribed by law. For example, specific legal

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services (e.g., representation by an attorney in legal proceedings), financial services and R&D services fall into this category; and  social and other specific services subject to a so-called light regime. A number of services, a good part of which is similar to the former non-priority services, can be procured in a simplified procedure. The light regime provides the contracting authority with great freedom in shaping the procurement procedure and the procurement documents. The contracting authority may also negotiate with the bidders and change the elements of the procurement during the procurement procedure. Services in this category include, for example, legal services, social, educational, healthcare, and cultural services or hotel and restaurant services.

III. FLEXIBILISATION OF THE BELOWTHRESHOLD REGIME

V. CONCLUSION The present Act on Public Procurement introduces greater flexibility and new options, which should enable the contracting authorities to adapt the procurement to their individual needs. However, some warn that this might turn out to be a double-edged sword. By providing wide discretion to the contracting authorities, the new rules naturally place increased requirements on their expertise and cautiousness. Nevertheless, the new rules have the potential to streamline public procurement procedures if they are in the right hands. LENKA KRUTÁKOVÁ Senior Associate CMS Cameron McKenna Nabarro Olswang, advokáti, v.o.s. E-mail: lenka.krutakova@cms-cmno.com

Photo: www.sxc.hu

The European Directives only regulate the procurement of contracts with an estimated value exceeding the stipulated thresholds. In the Czech Republic, even the below-threshold contracts for supplies or services worth over CZK 2 million (approx. EUR 74 000) and works contracts worth over CZK 6 million (approx. EUR 222 000) must be procured in a procurement procedure. Such contracts are, however, subject to a less strict below-threshold regime which has been further relaxed by the new Act on Public Procurement. Among others, the Act has introduced the following:  unlimited access to negotiated procedure with publication. The contracting authority can use the negotiated procedure without publication regardless of the conditions prescribed for above-threshold contracts;  simplified below-threshold procedure. The contracting authority can procure all below-threshold supply and services contracts in a simplified below-threshold procedure. The financial limit for the use of the procedure for works contracts has been increased from CZK 10 million to CZK 50 million (approx. EUR 1.8 million). The new procedure allows the contracting authority to use customised qualification criteria and to pick suitable rules from the above-threshold regime. Important procurement decisions are deemed to be delivered by their publication on the contracting authority’s web page; and  shorter time limits for submission of tenders.

IV. OTHER MEASURES The new Act on Public Procurement also contains:  extensions of the options for the use of negotiated procedures with publication and of a competitive dialogue;  permission of preliminary market discussions;  award of contracts on the basis of the Most Economically Advantageous Tender; and  ability of contracting authorities to stipulate an abnormally low bid as grounds for rejection of a supplier.

2018

IV.

FINANCE

BANKING SECTOR: STRICTER REGULATION, INCREASING COMPETITION In 2016, banking sector operated in the environment of solid macroeconomic performance, however under stricter regulation and increasing competitiveness. When the extraordinary impulse produced by a delayed uptake from EU funds died out, the Czech economy has slightly slowed down in 2016 as had been expected. Growth of the Gross Domestic Product has reached 2.5 %. The strong result of 2015 has set a high benchmark for 2016 and the developments can therefore be assessed favourably.

STRUCTURE OF THE CZECH BANKING SECTOR Towards the end of 2016, a total of 45 entities held banking licenses. The structure of the banking sector was created by 4 large banks, 5 medium-sized banks, 8 small banks, 23 branches of foreign banks, and 5 building societies. 37 entities were controlled by foreign owners including 14 banks and 23 branches. Domestic owners controlled 8 banks, two of which were banks co-owned by the state. At the end of 2016, the total value of the banking sector’s assets amounted to CZK 5 961 bn., which was a year-on-year increase of 9 %. The increase in assets was evenly spread across the banking sector. Therefore, four large banks (i.e. banks with assets exceeding CZK 250 billion) accounted for 59 % of the total volume of assets, which was exactly the same share as the year before. The banking sector’s assets represented 122 % of GDP.

BANKING LOANS: MAIN INDICATORS Volume (CZK bill.)

Change, y/y (in %)

Total loans (as of year-end 2016)

2 950.4

6.0

Households (residents)

1 330.3

7.7

Housing loans

1 053.3

8.4

185.4

8.6

976.1

6.0

485.3

16.1

Housing loans

337.0

15.0

Consumer loans

105.1

29.1

Non-ﬁnancial companies

509.6

-16.2

Consumer loans Non-ﬁnancial companies (residents) New loans (2016) Households

Source: CNB, ARAD

2018

LENDING AND DEPOSITS Czech banking sector has supported the economic growth by oﬀering loans even under stricter regulation and increasing competition from the part of technological companies (Fintechs). The total volume of loans provided by banks grew by 6 %, year-on-year, to CZK 2 950 billion at the end of 2016. By the end of 2016, household loans amounted to CZK 1 330 billion, which was by 7.7 % more than a year ago. In 2016, housing loans boomed and consumer loans recovered. During 2016, households have newly drawn housing loans totalling CZK 337 bill., which was a year-on-year increase of 15 %. New consumer loans amounted to CZK 105 bill., which represented yearon-year growth of 29 %. The loans granted to companies amounted to CZK 976.1 bill., which was by 6 % more than a year before. The volume of loans denominated in CZK slightly declined, while the volume denominated in foreign currencies rose by almost 30 %, y/y. In particular exporting companies preferred loans denominated in EUR, as the exit from exchange rate commitment was expected. The unique position of the Czech banking sector, where there is excess of deposits over loans, continues to persist. Overall, the volume of deposits exceeded the volume of loans by more than one-third by the end of 2016. The excess of deposits over loans is generated by the household sector, where savings exceeded their loans by almost one-half. In the corporate sector, the volumes of deposits and loans are more or less balanced. While this means a low banks’ reliance on the interbank market funding, the monetary policy, however, has at the same time a lower efficiency in supporting the economic activity.

Photo: www.sxc.hu

The good condition of economy was demonstrated by strong indicators of business and consumer confidence. Consumer confidence in particular reached historic highs at the end of the year. In December 2016, the y/y increase in consumer prices stood at 2 %, the inflation target of the central bank has thus been achieved and the moment of exit from the exchange rate commitment has approached (April 2017). Basic interest rates remained at technical zero during the whole year. Monetary policy has been supportive for loan creation, on the other hand, regulatory tightening as well as macroprudential regulation works in opposite direction.

D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic IV. Fin a n c e

NONPERFORMING LOANS IN EU 70 60 50 40 30 20 10

Sw Lux eden em bo urg Est on ia Fin lan d Cze U ch Rep K ub lic Ge rm the any Ne the rlan ds De nm ark Bel giu m Lith uan ia Fra nce Lat via Slo vak ia Ma lta Au stri a Sp ain Po lan d Ro ma nia Cro atia Hu ng ary Bu lga ria Irel and Slo ven ia Ital y Po rtu gal Cyp rys Gre ece

Non-performing loans (%)

Coverage ratio (%)

Towards the end of 2016, households had deposited CZK 1 959 billion with banks, i.e. 8.6 % more than the year before. More than 70 % of household deposits were non-term deposits. On the contrary, the volume of term deposits fell at the end of the year by 6.2 % to CZK 572 billion. With low interest rates, people prefer the immediate availability of deposited funds.

Source: European Commission

One of major advantages of the domestic banking sector has been low ratio of non-performing loans. In the framework of EU, the internationally comparable level of 2.5 % represented one of the lowest NPLs in the EU at the end of 2016. At the same time, the coverage ratio amounting to 63 % belongs to the highest among European peers. Good quality of domestic loans is thus the main reason for profitability of the Czech banking sector even under many challenges. Net profit for 2016 amounted to CZK 74 bn. increasing thus by 12.7 %, y/y, partly due to one-oﬀ factors. Return on assets reached 1.27 % and 17.9 % relative to Tier 1 capital. The Czech banking sector has long

2018

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

Banka CREDITAS a.s.

www.creditas.cz

BNP Paribas Fortis SA/NV, pobočka Česká republika

www.bnpparibas.cz

BNP Paribas Personal Finance SA, odštěpný závod

www.bnpparibas-pf.com

BNP Paribas S.A, pobočka Česká republika

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

Expobank CZ a.s.

www.expobank.cz

Fio banka, a.s.

www.ﬁo.cz

HSBC Bank plc - pobočka Praha

www.about.hsbc.cz/hsbc-in-czech

Hypoteční banka, a.s.

www.hypotecnibanka.cz

Industrial and Commercial Bank of China Limited, Prague Branch, odštěpný závod www.icbc-ltd.com ING Bank N.V. J & T BANKA, a.s.

www.jtbank.cz

Komerční banka, a.s.

www.kb.cz

mBank S.A., organizační složka

www.mbank.cz

Modrá pyramida stavební spořitelna, a.s.

www.modrapyramida.cz

MONETA Money Bank, a.s.

www.moneta.cz

MUFG Bank (Europe) N.V. Prague Branch

www.bk.mufg.jp/global

Oberbank AG pobočka Česká republika

www.oberbank.cz www.pkobp.pl/pkobppl-en/ international-banking/czechbranch-praha/ www.pabk.sk

PKO BP S.A., Czech Branch Poštová banka, a.s., pobočka Česká republika PPF banka a.s. PRIVAT BANK der Raiﬀeisenlandesbank Oberösterreich Aktiengesellschaft, pobočka Česká republika Raiﬀeisen stavební spořitelna a.s.

www.ppfbanka.cz

Raiﬀeisenbank a.s.

www.rb.cz

Saxo Bank A/S, organizační složka

www.home.saxo/cs-cz

Sberbank CZ, a.s.

www.sberbankcz.cz

Stavební spořitelna České spořitelny, a.s.

www.burinka.cz

Sumitomo Mitsui Banking Corporation Europe Limited, Prague Branch

www.smbc.co.jp

UniCredit Bank Czech Republic and Slovakia, a.s.

www.unicreditbank.cz

Volksbank Raiﬀeisenbank Nordoberpfalz eG pobočka Cheb Všeobecná úverová banka a.s., pobočka Praha

www.vr-nopf.de

Waldviertler Sparkasse Bank AG

Wüstenrot - stavební spořitelna a.s.

www.wspk.cz www.westernunionbank.com/ de/home www.wuestenrot.cz

Wüstenrot hypoteční banka a.s.

www.wuestenrot.cz

Western Union International Bank GmbH, organizační složka

Source: www.cnb.cz

2018

www.ingbank.cz

www.privatbank.at www.rsts.cz

www.vub.cz

Valid as of 30/9/2017

been well capitalised. Year-end capital adequacy ratio reached 18.45 %. Furthermore, most of the capital consists of a high-quality Tier 1 capital (Tier 1 capital adequacy ratio stood at 17.91 %).

OUTLOOK FOR 2017 As of October 2016, new recommendations have come into force as for housing loans. Firstly, banks have been recommended not to exceed the 95 % level of the LTV indicator of new retail loans secured by residential property and secondly, percentage of new retail loans secured by residential property with an LTV of 85–95 % should not exceed 10 % of the total respective loans newly provided. In spite of this, in the last quarter of 2016, the growth of new mortgage loans has not weakened. In 2017, stricter regulation and macroprudential policy measures will apply. As of beginning of the year banks are obliged to create countercyclical buﬀer amounting to 0.5 % of risk weighted assets (RWA). Some systemically important banks will be obliged to create higher capital reserves as for the systemic risk coverage. New legislation on consumer loans has come into force in December 2016. Moreover, as of April 2017, banks have been recommended not to exceed the 90 % level of LTV (concerning new retail loans secured by residential property). At the same time, the respective loans with an LTV of 80–90 % should not exceed 15 % of the total amount of these loans newly provided. This is a combination of measures which will probably lead to some slowdown in loans granted to households. On the other hand, the demand of domestic companies for new loans is expected to recover due to expected strengthening of investment demand. EVA ZAMRAZILOVÁ TEREZA LÍNKOVÁ Czech Banking Association E-mail: zamrazilova@czech-ba.cz www.czech-ba.cz

Photo:ww Photo:www.freeimages.com

OVERVIEW OF BANKS AND FOREIGN BANK AFFILIATIONS OPERATING IN THE CZECH REPUBLIC IN ALPHABETICAL ORDER

D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic IV. Fin a n c e

TAX CHANGES IN BRIEF The Income Tax Act Amendment brings about several significant tax changes. Some of them already came into force at the beginning of this year, but most of them will only begin to apply to the 2018 tax period. The following are some of the tax changes. INCOME TAX The main changes provided for by the Tax Act Amendment, forming part of the 2017/2018 tax package published in the Collection of Laws on 16 June 2017 under No. 170/2017 Coll., which came into force on 1 July 2017, concern Income Tax. The Amendment is very extensive. It comprises 204 points of change and 22 points of transitional provisions. Some changes will already apply to the 2017 tax period (e.g. higher child tax deduction benefits), others only to the tax period begun after the coming into eﬀect of the Amendment (e.g. in the case of natural persons, those changes will only apply from 2018 – such as the limitation of the maximum amount of expenses calculated on the basis of the percentage proportion of income). The 2017 tax rates remain unchanged and the supergross wage principle also remains in force in wage taxation.

However, part of the tax package is, for example, the broader application of the withholding tax to income derived from dependent activity (e.g. income based on the agreement to perform work) not exceeding CZK 2 500 per month – (withholding tax on income based on the agreement to complete a job not exceeding CZK 10 000 per month remains unchanged) – this change will be applicable as from 2018. Other changes, for example, concern the area of tangible and intangible assets depreciation. Changes applicable as from 2017 include the tax support of products for old age financial securing possibilities – maximum amounts of tax deduction from the tax base for payments into the 3rd pension pillar (after the deduction of CZK 12 000 in the case of persons eligible for drawing a state contribution, to the maximum amount in all the calendar months of 2017, provided more than CZK 1 000 is remitted in each particular calendar month), where private life insurance premiums were raised from CZK 12 000 (provided this limit was granted for 2016) to CZK 24 000 (applicable for the first time in 2017). Gains from gambling not exempted from tax liability will no longer be liable to withholding tax, but will be taxed on the basis of the tax return, the same as other income under Section 10. At the same time, it will be possible to deduct eligible expenses incurred for the attainment of that income. The Income Tax Act Amendment (although eﬀective as from 1 July 2017) provides for an increase of the second, third, and further child tax deduction benefit (NOTE – the first child tax deduction benefit regulated by Act No. 200/2017 Coll. is applicable for the first time only for the 2018 tax period!). The annual first child tax deduction benefit is CZK 13 404, the same as in 2016. The second child tax deduction benefit shall be raised by CZK 2 400 to CZK 19 404, and the third and further child tax deduction benefit shall be raised by CZK 3 600 to CZK 24 204.

CHANGES OF INCOME TAX APPLICABLE AS FROM 2018  RESTRICTION OF FLATRATE EXPENSES From 2018, the maximum amount of expenses of the payer eligible to claim flat-rate expenses shall be restricted. At the same time, however, the payer will be eligible to claim tax credit for wife and child even in the case of flat-rate expenses. 2018 expenses:  8 0 % flat-rate (agricultural businesses, craft trades) – maximum expense CZK 800 000;

2018

CZK 600 000;  4 0 % flat-rate (other businesses) – maximum expense CZK 400 000; 3 0 % flat-rate (income from business property renting under Section 7, income from rent under Section 9) – maximum expense CZK 300 000. These expenses correspond to income totalling CZK 1 000 000. In the case of a payer with a higher income, flat-rate expenses may be claimed, but only to the level mentioned above. In 2017, the payer may choose whether to claim the regulation applicable to 2016 (i.e. higher flat-rate expenses without the possibility of claiming tax credit for wife and child), or the regulation for 2018 (i.e. lower flatrate expenses and the possibility of claiming tax credit for wife and child).

SMALLSCALE EMPLOYMENT In the case of small-scale dependent activity income (e.g. under agreement to perform work) not exceeding CZK 2 500, the withholding tax shall be applied, the same as in the case of income under agreement to complete a job not exceeding CZK 10 000 specified in Section 6 para. 4 of the Income Tax Act. The payer shall not be required to mention income taxable by withholding tax in his tax return.

VAT No change has been made as regards the VAT limit (the limit of CZK one million for twelve consecutive calendar months continues to apply); VAT rates applying to catering services have been regrouped and are now included in the 15 % category under Act No. 113/2016 Coll. effective as from 1 December 2016 and the VAT Act Amendment No. 33/2017 Coll. (published in the Collection of Laws on 14 February 2017) “formally” applicable from 1 January 2017. VAT on subscriptions of newspapers and magazines has been reduced from 15 % to 10 %. Another part of the tax package, No. 170/2017 Coll., is the vast Amendment to the VAT Act. The change applies to persons doing business jointly under a Memorandum of Association without legal subjectivity, where the Amendment makes it possible to adjust to the new rules in the transitional period until 31 December 2018. All VAT changes shall come into force on the eﬀective day of the tax package, i.e. after its publication in the Collection of Laws on 1 July 2017. A new sanction measure came into force on 1 July, which newly institutes the term of unreliable VAT person. The measure will enable the financial authority to sanction people seriously violating their obligations towards the Tax Administrator in the area of Value Added Tax. While the former unreliable payer institute could have been circumvented by cancelling VAT registration and making a new registration, in the case of the unreliable person institute this will no longer be possible. This institute is primarily directed towards persons that may try to make a new VAT registration, thus evading the consequences of their previous designation as unreliable payer by the Tax Administrator. The institute will repeatedly remind businessmen of the need to carefully control the reliability of their partners as regards their tax liabilities. Currently, in mid2017, 9 530 unreliable VAT payers are registered as unreliable VAT payers according to the Ministry of Finance. In this connection, the Ministry has published the key on the basis of which VAT payers are included in this category: only the VAT payer who has repeatedly failed to file his tax return or control report or tax return register statement, in the case that the situation has occurred at least twice in the period of twelve consecutive calendar months, can be designated as an unreliable person.

2018

The Real Estate Tax Act remains unchanged. However, a new provision applying to 2017 is the possibility to have information concerning the payment liabilities under this Act sent by e-mail. The Decree specifying the list of cadastral areas with average basic prices of agricultural land attached to them is amended by Decree No. 432/2016 Coll. applicable as from 1 January 2017. The Road Tax remains unchanged.

MINIMUM WAGE, AVERAGE WAGE, TRAVEL COMPENSATION Minimum wages increased to CZK 11 000 as from 1 January 2017. The 2017 average minimum wage is CZK 28 232, where the solidarity tax increase limit in the case of income tax derived from dependent activity in 2017 is CZK 112 928. The maximum amount of domestic meal allowance was raised to CZK 205 by Decree No. 440/2016 (CZK 198 in 2016), and travel compensation per km of trip for cars was increased to CZK 3.90/km (CZK 3.80/km in 2016). The 2017 foreign meal allowance remains unchanged and amounts to EUR 45 for Germany, Austria, Italy, and France and to EUR 35 for Slovakia and Poland.

ACCOUNTING While a number of changes were made in accounting covering the 2016 accounting period, the Accounting Act Amendment No. 462/2016 for the year 2017 remains practically unchanged. One new provision is the obligation to state non-financial information for accounting units which are not the object of public interest. Except for minor formulation changes, the Accounting Act Amendment valid from 1 January 2017 brings about partial changes in the area of transformation, making it possible to divide assets into fixed assets and current assets in the financial statement (Section 19 para. 8).

VALUATION REGULATIONS The implementing decree to Assets Valuation Act No. 441/2013 was amended by decree No. 443/2016 Coll., which came into effect on 1 January 2017. The change applies to the valuation of intangible assets – the valuation of the same immovable property made according to legislation effective at 31 December 2016 differs from valuation effective as at 1 January 2017. More info: www.mfcr.cz

Photo: www.pixabay.com

 6 0 % flat-rate (other trades except craft trades) – maximum expense

D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic IV. Fin a n c e

ENTREPRENEURSHIP OF FOREIGN ENTITIES & 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. Withholding tax rate of 35 % is also applicable for taxpayers who are not EU members or taxpayers from a country that has not signed Double Tax Treaties with the Czech Republic. 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.

I. 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.:

 d irector’s fees;  contractual penalties from business obligations;  d ividends;  o ther 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 non-transparent 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 third-country subsidiary may qualify under certain additional conditions).

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

Revenues from:  services (except realisation of build-

ing site or construction or installation or assembly project) rendered on the territory of the Czech Republic;  consulting, management and brokerage and similar professional activities provided on the territory of the Czech Republic;  i ndependent personal services rendered on the Czech territory; i ncome of artistes and athletes for their performance in the Czech Republic.

Payments from Czech tax residents (or from permanent establishments of non-residents) for:  i ndustrial and cultural royalties, in-

cluding payments of any kind received as a consideration for the use of any industrial, commercial or scientific equipment, except of financial leases;

2018

applied on profit. For these types of income, a standard income tax return shall be submitted (once a year until 1 April of the following year, or until 1 July 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.

III. 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 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 E-mail: kovar@nexiaprague.cz

EMPLOYEES  TAXATION, SOCIAL SECURITY, AND HEALTH INSURANCE

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.

2018

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

Photo: www.sxc.hu

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.

D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic IV. Fin a n c e

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.

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 135) and private life insurance or supplementary pension insurance premiums annually of up to CZK 50 000 (approx. EUR 1 931) 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.

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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 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.

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 Czech tax non-residents who qualify as residents of other member states of the European Union or of the European economic area and their Czech-source income accounts for at least 90 % of their total annual income. The annual personal tax relief is CZK 24 840 (approx. EUR 959). 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 2 627). Additional personal tax relief of CZK 2 520 (approx. EUR 97) is granted for partially disabled persons and of CZK 5 040 (approx. EUR 195) for fully disabled persons. Tax relief of CZK 4 020 (approx. EUR 155) is granted to tax payers who are full-time students up to the age of 26 and tax relief of CZK 13 404 (approx. EUR 518) is granted for the first, CZK 19 404 (approx. EUR 750) for the second and CZK 24 204 (approx.

2018

EUR 935) for the third and each other dependent child. In addition, parents may apply for tax relief for children visiting the kindergarten of CZK 11 000 (approx. EUR 425) 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, does not receive other income above CZK 6 000 (approx. EUR 232) (apart from income that is subject to the final withholding tax, e.g. interests and dividends from the Czech companies) and individual’s employment income is lower than the social security ceiling of CZK 1 355 136 p.a. (for 2017), 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/she 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 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.

2018

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. ONDŘE J POLÍVKA MARTINA KNEIFLOVÁ Ernst & Young, s.r.o. 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 1 355 136 (approx. EUR 52 342) in 2017 is subject to the solidarity surcharge tax of 7 %.The amount for 2018 will likely be CZK 1 438 992 but this is yet to be conﬁrmed by the authorities. 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 2017 it is CZK 1 355 136 (approx. EUR 52 342). For 2018, the annual social security ceiling will likely be CZK 1 438 992 but this is yet to be conﬁrmed by the authorities.

REGIONS

Prague – Charles Bridge

PRAGUE REGION

Prague is an important cultural and artistic 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 From the economic point of view, Prague has an exceptional position in the framework of the Czech Republic. In addition to all the main state administration authorities, most financial institutions and foreign firms have their seats there. All this has an essential influence on Prague’s economy, which creates about one-quarter of the national gross domestic product on a long-term basis. The tertiary sector (services) in the capital accounts for more than 80 % of added value. Prague is the hub of all the country’s motorway routes and is also an important international railway junction. The Prague Main Railway Station has undergone a total reconstruction, which was completed in 2011. Passenger and air freight transport is operated in Prague mainly at the Václav Havel Airport. The volume of passengers and freight processed by this airport in the first half of 2017 is evidence of the continuing interest shown in Prague as a target destination. In the first half of 2017, the airport handled 6 764 752 passengers. Most of them used direct flights across Europe. Massive year-on-year increases were shown in flights between Prague and Africa and between Prague and the Near and the Far East. In the first half of this year, 21 % more passengers were processed by the airport year-on-year, and the outlook for the rest of the year, too, looks optimistic. The latest estimate is that the 2017 annual Prague airport traﬃc will be more than 15 % up on that of last year. Traditionally the greatest passenger interest is in direct flights to European destinations, to which nearly 90 % of the flights are targeted. But the interest in flights outside of Europe is also on the increase. Last year’s trend, where flights to Africa regained their popularity, continued (81 % increase year-on-year). More tourists also travelled eastwards. Flights to the Far East showed a nearly 70 % increase and flights to the Near East were up by nearly 21 %. The most visited country in

2018

terms of the number of passengers was the UK, and the most popular destination in the first six months of the year was Moscow, which slightly surpassed the number of flights to Charles de Gaulle airport in Paris. Cargo transport, too, showed a year-on-year increase. In the first half of this year, more than 37 000 tonnes of cargo was handled by Prague’s airport, nearly 14 % more than in the same period of last year. Prague is an important city in the Central European region as regards conference organisation. In 2016, the Czech capital hosted 4 426 conferences, the largest number for the past ten years. Conferences held in Prague accounted for more than one-third of such events organised in the whole of the Czech Republic and attracted 541 412 delegates to the Czech capital. According to the Prague Convention Bureau, half of the events held in Prague had international participation. Most foreign delegates came from

Statistical Data Population Gross wage Unemployment

31 June 2017

1 286 602

1.–2. Q. 2017

CZK 36 645 (approx. EUR 1 466)

31 August 2017

2.55 %

Source: Czech Statistical Oﬃce

Photo: CzechTourism archives, Libor Sváček

Prague is one of the most attractive and successful regions in 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.

D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic V. Re gio n s

the UK, Germany, the USA, Italy, and Belgium. The most-widely discussed subject last year was Pharmacy – followed by Industry, IT and Telecommunications. Most of the events were smaller corporate undertakings attended by less than 150 people. The number of large, mostly association-related conferences and congresses attended by more than 1 000 delegates reached the figure of 48. All of them took place in Prague. The major event in 2017 was when Prague hosted the Sigfox World IoT Expo, featuring global net technology for the Internet of Things, thus becoming the IoT world centre. The event was attended by more than 40 Sigfox network operators from Europe, USA, Mexico, Brazil, SAR, Réunion, Taiwan, Singapore, Japan, New Zealand, Tasmania, and many other countries. More than 120 exhibitors from all over the world arrived to display their IoT equipment, platforms and comprehensive solutions. Going hand in hand with the organisation of conferences is the hotel business which, in addition, attracts new investors. According to Cushman & Wakefield consulting company, in the first half of 2017 investment in hotel property in the Czech Republic amounted to EUR 166 million, the second largest volume in the region after Poland. The largest transaction in the region is the acquisition in 2017 of Prague’s Marriott Hotel sold for around EUR 90 million.

In the past 10 years, the Centre has built a team of 450 experts from 43 countries and its plan for the coming years is to employ 300 more people in new premises. The Centre is expected to employ some 750 people altogether. JNJ Global Business Services, the Prague shared services centre of Johnson & Johnson, specifically supports the financial functions in the main sectors of the firm’s activities – medical devices, pharmaceuticals and consumer goods. Many firms which have invested in Prague also operate in IT business and research. For example, one of the largest investments is the construction of a global IT Centre in Prague’s Smíchov District by the pharmaceutical firm MSD, which has given employment to hundreds of IT specialists and scientists.

INOVACENTRUM ČVUT www.inovacentrum.cvut.cz 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 to practice. Inovacentrum ČVUT, with its Business Innovation Centre (BIC) statute, is a member of the European Business Network (EBN). More at www.inovacentrum.cvut.cz.

VZLÚ PRAGUE SCIENTIFIC AND TECHNICAL PARK 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 to 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 This is a business incubator for innovation firms concerned with biomedical sciences, and a centre for the support of the competitiveness of start-up firms concerned with biomedicine. More at bioinova.avcr.cz/ o-nas/ibc.html.

INVESTMENT In the past three years, CzechInvest mediated 27 investment projects for Prague, worth an aggregate of CZK 7 043 billion, which have created or will create 3 773 jobs. According to an AB SL survey, the Czech Republic has already attracted 200 global firms which have established their service centres there. The centres are the largest Czech employers of university graduates starting their careers, according to the survey. They employ some 50 000 graduates engaged in areas such as IT, Human Resources, Logistics, Accounting, Finance and Marketing. In brief, firms engaged in these areas provide employment to an aggregate of 75 000 employees. Prague is also a shared service centre within the framework of the Czech Republic. For example, in 2016, the American company Johnson & Johnson announced its plan to enlarge the range of its services in Prague provided by its JNJ Global Business Services International Centre.

PRAGUE SPACE INCUBATOR Several start-ups moved into Prague’s space incubator in 2017, where they will develop their projects. They include, for example, the development of racing and trekking bicycle frames, digitalisation of aeronautical data, tourist mobile applications, management of African agriculture and an X-ray device for verifying the authenticity of works of art. For example Festka, a manufacturer of the most up-to-date bicycles, concerns itself with craft production and technological innovation. It collaborates with leading scientific and research institutes and technological innovators such as the Czech Technical University (ČVUT), CompoTech, Nipponn, Campagnolo, GRM and Meopta. Currently Festka is undergoing a new phase of growth. It is concentrating on the development of a new road racing and trekking bicycle frame named Spectre, designed primarily for professionals of the Czech Cycling Federation. Another company, NG Aviation, is working on modern solutions in the area of aviation data

REPRESENTATIVE ACTORS IN THE COMPANY SERVICES SEGMENT IN PRAGUE Accenture • ADP Employer Services • Anheuser-Busch InBev • Barclays • Bodycote • Carrier • Clearstream/Deutsche Börse • Comdata • CSC • DHL Express • Eaton • ExxonMobil • Honeywell • Infosys • JNJ Business Services • LUKOIL • Medtronic • Microsoft • Monster Worldwide • OKIN GROUP Pﬁzer • RWE • SAP Services • Siemens • TMF Group • Xerox

2018

Prague – National Memorial on the Vítkov Hill

digitalisation. The range of its products, named AIME (Aeronautical Information Management Company), comprises three solutions in one package. The AIME DINO application will link together the needs of airports with those of the air navigation service providers (ANSP). The AIME Digital Data Creator device has the ability to create digital maps complying with ICAO standards, thus oﬀering a unique possibility to clients wishing to settle in the digital world. It is planning to use the advantages of tactile interface and virtual reality solutions so as to make aviation data processing as convenient as possible. Its AIME Viewer GNSS-A-SMGCS has the capacity to integrate the GNSS position of the monitoring system in airport operation monitoring systems, which it integrates into the airport digital map. This facilitates navigation, especially with regard to obstacles and closed parts of the airport surfaces. During flight, the Triphood mobile application narrates original stories to passengers. It is especially suitable for tourist and information centres, national parks, zoos, etc. The development of the application is based on its optimisation and the addition of new forward-looking functions. Big Terra comes forward with the latest developments in the management of African agriculture. It combines satellite data, meteorological stations and numerical weather models, so as to provide farmers and other entities using agricultural infrastructure with a single space, comprising data to support their decisions in the management of agricultural activities – from suggesting the best time to start planting, followed by monitoring the growth of crops, to suggesting the optimum harvesting time. InsightART provides a globally unique and most up-to-date spectral X-ray device for the inspection and verification of works of art. The device gives information about pigment composition in paintings, oﬀering unprecedented detailed data about the painting. It is used for verifying the authenticity of the work and provides a unique and highly detailed insight beyond the upper layers of paintings, thus helping restorers in their high-precision work. The InsightART X-ray technology

2018

is based on the space research of particles. InsightART detectors are operated as dosimeters and particle trackers at the International Space Station and are also used as detectors for the most demanding experiments in high energy physics in CERN. This universally patented technology was developed by the parent company InsightART – Ddvacam – a spin-off of the Czech Technical University in Prague.

EDUCATION Prague is an important centre of science, research and education, a city in which one-third of the country’s public universities and one-half of private institutions of higher learning are concentrated. There are five large prestigious public universities in the territory of Prague – Charles University, the Czech Technical University, the Institute of Chemical Technology, the University of Economics, the Czech University of Life Sciences – and 12 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. There are more than 33 higher learning institutions in Prague, where more than 130 000 students have received education in all types of studies. This is 37.4 % of all the university students in the Czech Republic. The number of foreign nationals, too, is rising. In the 2014/15 academic year, they accounted for 15.6 % of all students enrolled at Prague universities.

Photo: CzechTourism archives, UPVISION

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

Czech bank for Czech Export

Czech Export Bank I I I I

Fully state-owned One of the pillars of the Czech pro-export policy Provides export financing to the riskier territories Bank clients are Czech exporters regardless of their turnover

Rating Standard and Poor’s AA– Moody’s Investors Services A1

Products Česká exportní banka, a.s. Vodičkova 34, 111 21 Praha 1 Czech Republic tel.: +420 222 843 111 e-mail: ceb@ceb.cz fax: +420 224 226 162 www.ceb.cz

I I I I I I

Pre-export Credits Supplier’s Credits Guarantees Purchase of Export Receivables Financing investments abroad Buyer’s Credits

CENTRAL BOHEMIA REGION 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. 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 World Cultural Heritage List). Kolín is another town, besides Kutná Hora, figuring in the Czech list of urban historical 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 nationwide significance. Other industries in the Region are glass and ceramic 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. Water is another mode of transport: 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 several industrial parks in the Central Bohemia Region. A quarter of these occupy large areas of over 100 hectares, whereas the remaining parks 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 2016, the Region attracted investments worth CZK 4 637.16 million in 8 investment projects, mediated by the CzechInvest Agency, which helped to create 793 jobs. A strong position in the Central Bohemia

2018

Region is held by the automotive sector, owing to the presence of two major car manufacturers, 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 about 2 500 workers in its plant on 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. An interesting fact about the Czech investment is that all the 3D LEGO models for Legolands are built in the Czech Republic. For example, the largest European LEGO Brand Retail Store, which opened in London in December 2016 selling exclusively LEGO building kits, also sells LEGO 3D structures, all of which come from Kladno in the Czech Republic, including a Big Ben model more than six metres tall. In September 2015, the warehouse of the American Amazon online shopping site started full operations in Dobrovíz near Prague. The hall in Dobrovíz is the largest detached industrial building to be constructed in the Czech Republic after 1989. Its special features are that it is fully air-conditioned and very well thermally insulated. It covers an area of 95 000 sq. metres.

Statistical Data Population

31 June 2017

Gross wage

CZK 29 263 1.–2. Q. 2017 (approx. EUR 1 170)

Unemployment

31 October 2017

Source: Czech Statistical Oﬃce

1 345 487

3.09 %

BAEST Machines & Structures, a.s. a major engineering and manufacturing company with an extensive production programme

Traditional Czech manufacturer of steel vessels & structures: •

carbon / stainless steel tanks

•

pressure vessels

•

components and complete units for bituminous mixing plants

•

silos and hoppers

•

petrol filling stations

•

equipment for energy industry and environmental projects

•

stainless steel structures

25 years 400 silos 600 bitumen units 2 500 petrol stations 10 000 tanks

Oil & Gas Oﬀshore

Petrochemical

Hydropower & Energy

BAEST Machines & Structures, a.s. Černoleská 1930, 256 01 Benešov, The Czech Republic Phone: + 420 317 753 211, E-mail: info@baest.cz

Construction

Food & Agriculture

www.baest.cz

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 The industrial zone at Mladá Boleslav covers a surface area of 75 000 square metres. Besides the Škoda Auto car factory, the international company, Faurecia, one of the world’s largest suppliers for the automotive industry, is another major company to have its manufacturing plant located in the Mladá Boleslav Industrial Park. Eaton company, which concerns itself with the control, use, and administration of hazardous energy, in 2015 enlarged its European Innovation Centre – the new building is part of the scientific and technical park in Roztoky near Prague, a global research centre carrying out innovation work for Europe, the Middle East, and Africa. In the Innovation Centre, on a surface area of 650 sq. m, is where top research is carried out, focusing on the development of new-generation energy systems that will make possible the 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 the VW Group, Volvo, E.ON, HP, IBM, and Czech Railways. Another company expanding its activities is Wrigley Confections CR based in Benešov, Central Bohemia. The company will enlarge its production of Skittles sweets (CZK 1.46 billion, 28 workplaces). In its new factory in Kolín, the Japanese company Nippon Paint will manufacture paints for the automotive industry, as a part of its plan to enlarge and strengthen its activities on the European market. The firm plans to complete the project in October 2018 and start production in January 2019. Many investment parks benefit from favourable locations near international highways and main roads. These parks include, for example, the Průhonice and Čestlice-Nupaky Industrial Parks (both near the D1, which connects Prague and Brno), Rudná-Nučice (near the D5, which runs from Prague through Plzeň to Germany) and Hostivice-Jeneč and Tuchlovice. Many parks have been established in the vicinity of larger towns, such as Kladno, Slaný, Kutná Hora, Příbram, Nymburk, and Rakovník. In 2017, the company GE Aviation Czech and the Central Bohemia Regional Authority signed an Agreement of Intent to find a suitable locality for a new central plant to manufacture GE turbojet engines in the Central Bohemia Region. GE Aviation is extensively searching for a locality where it could build the new central plant with an ecosystem of suppliers and partners. The new GE turbojet engine plant in the Czech Republic will participate in the development of advanced turboprop engines and will ensure the manufacture of components, the assembly of turbojet engines, testing, service and customer support plus other work. In all, the GE project will create more than 500 new jobs in the Czech Republic.

2018

Photo: Biocev archives, CzechTourism archives Radomír Režný

Biocev

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 Centres and Parks active in this area:  D obříš Centre for Applied Research – www.cavd.cz  T echnology and Innovation Centre – VÚK Panenské Břežany http://www.itcvuk.cz/  B usiness Incubator in Nymburk – www.inkubator-nymburk.eu/  S cience and Technology Park in Řež – www.ujv.cz/cz/park.html/  M  stěnice Scientific and Technology Park – www.eurosignal.eu/  T echnology Park and Incubator, Ltd, Březno  M  ilovice Scientific and Technical Park – www.vtpmilovice.eu/ Technopark Kralupy, part 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. Their current projects are worth CZK 191 million. The laboratories will employ a research staff of 20 scientific workers and dozens of visiting students. Technopark Kralupy focuses on construction chemistry and related branches, especially materials research. It is a respected workplace for specialists engaged in the area of aluminosilicate, refractory, and ceramic materials applications. “We participate in the BioMates project financed from the EU Horizon 2020 General Research and Innovation Programme. This is concerned with the processing of non-food biomass into chemical intermediate products usable in conventional crude oil processing,” says Mr Petrák, Director of Technopark. In addition, Technopark collaborates with a number of commercial enterprises, especially within the EU, within the framework of contract-based research. The most important enterprises and institutions include Škoda Auto a.s., Sultrade, Institute de la Corrosion (France), Fireclay, Continental, ArcelorMittal and Voestalpine Stahl GmbH (Austria).

D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic V. Re gio n s

A large scientific project located in the Region is the Biotechnological and Biomedical Centre of the Academy of Sciences and Charles University at Vestec (BIOCEV). Its full operations started in June 2016. The achievements of its scientific teams include the development of a unique vaccine for the treatment of infectious diseases, the historically first documentation of tooth development, which may aid in the treatment of cancer, and the revolutionary discovery of an organism without mitochondria, referred to as the “powerhouses of the cells”. By 2020, the Centre will be employing some 400 scientific workers plus 200 students attending Master’s and Doctoral degree courses. Currently the Centre has 56 research groups working on 5 synergic programmes concerned with the detailed analysis of organisms at molecular level. Their findings will be used in applied research and the development of new methods of treatment for serious health problems. The final results of BIOCEV’s research work include, for example, accurately targeted drugs and protein and tissue engineering therapies. An 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 later this year. This is the largest scientific and research

project in this country’s history, whereby scientists from all over the world will examine the simulation of processes taking place within the stars, study the history of the Universe, work on the development of new techniques for medical visualisation, develop new methods and study possibilities of cheaper and more non-invasive cancer treatment. The Centre will be fully operational in 2018, when the world’s most eﬃcient laser will be installed there. The unique laser system, which was developed by the American Lawrence Livermore National Laboratory (LLNL) for ELI Beamlines after nearly four years of intensive work, was moved to the Centre in 2017. The laser represents a new generation of diode-powered high-energy laser systems. It is the only laser worldwide built exclusively on highly eﬃcient semiconductor laser diodes which, owing to new technologies using diode light with 10 pulses per second, several times surpasses systems installed anywhere else in the world. For the laser community, this means a decisive milestone: this is the first petawatt laser providing really usable high-repetition rate pulses for application research purposes. In the next twelve months, the Czech-American team will build and integrate a laser with a central control system and a laser pulse distribution system that will make it possible to use the laser to conduct experiments. Its output will be gradually increased to the full projected value, in which the system will give a top-high output exceeding 1 PW (million billion watts) at 10 Hz repeat frequency. It will thus break its existing record to become a petawatt laser system with the highest average output worldwide. In addition, it will have several other primacies: besides using the brightest laser diodes in the world, the large PW pulse compressor of the new laser system will become the largest optomechanical vacuum-compatible structure ever to be built in the Czech Republic.

EDUCATION The Region is home to the Faculty of Biomedical Engineering of the Czech Technical University (CTU) in Kladno. There are also 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.

Karlštejn

2018

Contact: ETD TRANSFORMÁTORY, a.s. Zborovská 54/22 | 301 00 Plzeň | Czech Republic Tel.: +420 373 031 508 Fax: +420 373 031 388 e-mail: etd@etd-bez.cz GPS: 49.7260092N, 13.3863008E

ETD TRANSFORMÁTORY a.s. is an important designer and manufacturer of both standard and special power transformers, chokes and reactors with its own know-how, complex technologies and special testing equipment. Transformers have been produced in Plzeň for 96 years and they are inseparably connected with the well recognized ŠKODA brand. ETD TRANSFORMÁTORY a.s. is a daughter company of BEZ TRANSFORMÁTORY, a.s., and a part of the International BEZ Group (IBG). This group is the only producer of a broad range of power and distribution transformers, chokes, reactors and related accessories and services according to customer requests in the region of Central Europe. ETD TRANSFORMÁTORY a.s. uses a certified quality management system according to ISO 9001; environmental protection according to ISO 14001; health and safety at work according to BS OHSAS 18001; certified process of fusion welding of metals according to ISO 3834-2; and has accredited Electrical Testing Laboratory certificates according to ČSN EN ISO/IEC 17025.

We adhere to the following key values: Q Customer oriented approach Q Expertise and workmanship Q Enthusiasm and motivation Q Flexibility and speed Q Efficiency Q Innovation and improvement Q Protection of health and environment

Our products and services: Q Power transformers | three-phase regulating oil transformers with a power range of 10 to 350 MVA and nominal voltage up to 420 kV, | three-phase non-regulating oil transformers with a power output up to 410 MVA and nominal voltage up to 420 kV, | single-phase non-regulating oil transformers with a total power output of the three-phase set up to 1200 MVA and nominal voltage up to 420 kV, | special type regulating and non-regulating transformers as required by the customer (e.g. number of turns, nominal impedance voltage, outlet configuration, cooling, etc.). Q Autotransformers | three-phase oil transformers with a power output up to 400 MVA and nominal voltage up to 420 kV. Q Furnace transformers Q Traction chokes for rail vehicle loads (railway, underground or tram cars), trolley-buses, and other special use inductors Q Start-up and special reactors Q Assembly, maintenance, the 24-hour service

www.etd-bez.cz 78

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Q Reconstruction and repairs of | own production transformers, | other producers’ transformers.

D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic V. Re gio n s

Plzeň – The Great Synagogue

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.

Photo: CzechTourism archives

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 worldwide and is a 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, gearboxes, rail transport vehicles, trolleybuses, complete electric drives, turbines for combined gas and steam cycles and extraction steam turbines.

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Plzeň

2018

INVESTMENT In 2016, the Region attracted investments worth CZK 4 328.69 million in 13 investment projects mediated by the CzechInvest Agency, which helped to create 1 117 jobs. Over the past 20 years, foreign investment in the Plzeň Region mediated by CzechInvest amounted to vast sums of money. The three biggest investments came from Japan, all in the area of electronics and electrical equipment. The biggest investment project of all, worth more than four billion CZK, was placed in the Region by Panasonic, a renowned manufacturer of electronics. The second biggest project, which cost nearly CZK three billion, was realised by Daikin Industries, the Japanese manufacturer of air-conditioning systems, and the third biggest foreign investment project in the Region was that by Matsushita Electric Works, another Japanese company, worth CZK 2.7 billion and situated in Planá, Tachov District. This company has common roots with Panasonic (originally Matsushita Electric Industrial Co.). Statistical Data Population

30 June 2017

Gross wage

CZK 27 693 1.–2. Q. 2017 (approx.EUR 1107)

Unemployment

31 October 2017

Source: Czech Statistical Oﬃce

579 129

2.32 %

Photo: CzechTourism archives, Václav Jirásek

Škoda Plzeň also conduct their own research and business activities. Doosan Škoda Power is a member of the Korean group of Doosan, an important global manufacturer of equipment for thermal power stations, especially steam turbines, whose manufacture in Plzeň has a tradition of more than 110 years. The firm is an important and responsible employer in the Region. 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 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. Cross-border cooperation between Bohemia and Bavaria is developing continuously and its importance is gaining momentum. This goes mainly to the credit of the personal meetings of potential new partners. The Bavaria-Bohemia collaboration between firms is behind the success in establishing new contacts. For example, in September 2017 businessmen met in Klatovy, where a meeting of firms took place, with 35 exhibitors displaying their products in the engineering and electrotechnical sections. It was a good opportunity for the participants to seek new foreign as well as domestic partners. Mutual collaboration between Bavaria and Bohemia goes back 25 years. During that time, a number of long-lasting successful business partnerships have been set up, new jobs have been created and competitiveness between the firms has strengthened in the regions on both sides of the frontier. Plzeň is the only city in the Czech Republic holding licences of the World Trade Centre. Thanks to the network of nearly 330 world trade centres, WTC Pilsen gains access to much valuable business information and can assist firms in planning to develop on an international scale.

D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic V. Re gio n s

After the Second World War, it separated from Panasonic to become an independent company, which in 2011 became Panasonic’s affiliate. In the past 20 years, CzechInvest has mediated 127 investment projects with Japanese firms, located in different parts of the Czech Republic, worth CZK 123 billion. In 2016, 20 years had passed since the cornerstone was laid in Plzeň for Panasonic AVC Networks Czech s.r.o., a manufacturer of colour television sets. The factory in Plzeň is Panasonic’s biggest manufacturing plant outside Japan. It is one of the biggest exporters in the Czech Republic and one of the largest employers in the Region. It started production in spring 1997 and has turned out 34 million TV sets since then. An important industrial park in the Region is Panattoni Park Pilsen West, which offers some 50 000 sq metres of top quality industrial space for individually designed construction. The locality has an excellent potential for logistics, warehousing and light industry production. Faurecia, manufacturer of car seats, for example, has been operating its plants there for several years now and so has Trost Auto, distributor of car and truck parts. In 2017, Panattoni Europe industrial developer announced its plan to build a new logistics hall for storing aluminium constructions there for the Belarus company, Alutech Systems, manufacturer of components for roller shutter systems and sectional gates. Later this year, a building covering a surface area of 4 554 sq. m will be built in the Panattoni Park Pilsen West. The company will move into the new building from Bor near Tachov and will thus gain an additional 1 700 sq. m of storage space. “Recently we started an important expansion of KION Group in the nearby Panattoni Park Stříbro, which will now help Alutech to expand. This is a confirmation of the fact that the Region is becoming an increasingly attractive gateway to Western Europe,” says Pavel Sovička, Managing Director of Panattoni Europe for the Czech Republic and Slovakia. 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 investments in the automotive industry, manufacture of precision engineering products, air-conditioning

equipment, production of moulds and plastic prototypes, and research and development. Altogether 46 firms with more than 15 000 employees have filled the park over the past 20 years. 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 runs the Central European distribution warehouse in Bor for consumer electronics of the Dutch Philips company. The Region has also witnessed the development of scientific-technical parks on its territory – for example, the COMTES FHT a.s. company in Dobřany, concerned with the research and development of metal materials, started the construction of a new scientific-technical park. The investment will cost nearly CZK 150 million. The new park will be open in 2019. It will consist of three buildings located in the close vicinity of the existing research and laboratory premises of COMTES FHT. The new scientific and technical park has the support of the host town of Dobřany and the entire Plzeň Region. The firm will link its programme with the existing development facilities. More than ten firms in the Region, including two foreign companies, have promised to use it.

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 in 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 nine faculties (e.g. Mechanical and Electrical Engineering, Economics, Applied Sciences). In 2016, the University opened a new institution, the Regional Innovation Centre for Electrical Engineering (RICE). Its laboratories are equipped with state-of-the-art devices and unique technologies. Despite its short existence, RICE can pride itself on a number of achievements – for example, at this year’s 25th AMPER trade fair in Brno it won the Golden Amper award for its smartPRO smart suit for firefighters. After last year’s win in the international pre-commercial tender in the framework of the Smart@Fire project, this is another achievement of the Czech consortium. The suit makes it possible to measure the firefighter’s physiological functions and show his position on the map, even in places where no GPS signal is available. To find the position, it uses a unique inertial navigation system. The jury also appreciated the other functions of the smart suit, one of which is active lighting with automatic activation in the dark, and automatic activation of an alarm in the case of set limits being exceeded. All data that are measured are stored in the control unit attached to the suit, fulfilling the function of a black box.

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

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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. 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 is an important tourist and recreational area, attracting visitors who come to see its many beauty spots, unspoiled countryside dotted with lakes (Rožmberk, Svět) and the unique atmosphere of its historical towns (České Budějovice, Tábor, Jindřichův Hradec, Český Krumlov, Prachatice, Písek). Exceptional natural wonders can be seen in the Šumava National Park, where the greatest attractions are the Boubín and Žofín virgin forests. Those seeking recreation will appreciate stays in the vicinity of Lipno Dam and on the banks of the Vltava River. 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.

ECONOMIC POTENTIAL 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 the Bohemian Forest and forests in the Novohradské hory Mountains. The forests are mostly coniferous, spruce and pine. The greatest wealth of raw materials comprises 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 institution. 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 mostly oriented towards cereals, oil crops, and fodder crops. 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 supply 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

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(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 approximately 6 kilometres from České Budějovice. In mid-2015, work began on its modernisation, with the aim of transforming it into an airport offering the full range of services for charter, tourist, business, international and national cargo transport. Currently, the airport operator only holds a licence for non-public international flights, allowing it to receive and handle only medium-sized aircraft with a wingspan 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. The international “Bread Basket” agricultural fair and the “HOBBY” exhibition are the most popular. Many types of cross-border collaborations 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 hydroelectric power stations.

Statistical Data Population

31 June 2017

Gross wage

CZK 25 528 1.–2. Q. 2017 (approx. EUR 1 021)

Unemployment

30 October 2017

Source: Czech Statistical Oﬃce

639 119

2.59 %

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INVESTMENT In 2016, the Region attracted investments worth CZK 6.490 with 8 investment projects, mediated by the CzechInvest Agency, which helped create 1 611 jobs. The Region has several industrial parks (locations at http://invest.kraj-jihocesky.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 second-largest 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 2016, Yanfeng Automotive Interiors (YFAI) announced their plans to build a new plant in Planá nad Lužnici in the Tábor District. The company, making plastic and rubber products for the automotive industry, is planning to enlarge the manufacture of systems for automobile interiors in Planá nad Lužnicí and at the same time build a Lighthouse Centre for Europe and Africa. This investment project to cost CZK 1.85 billion will create 588 new jobs. A large proportion of jobs will be filled by university and secondary school leavers. The Yanfeng Automotive Interiors Group is a leading world supplier of dashboards and interior parts. It has more than 110 development and production centres in 18 countries, where it employs approx. 33 000 people. In the Czech Republic it manufactures mainly plastic and rubber products for domestic and other European automobile manufacturers. The supranational group, Johnson Controls, one of whose members Yanfeng Czechia Automotive Interior Systems is, has four manufacturing plants in the Czech Republic. Currently the company has about 1 540 employees. The 2016 Investor of the Year in the Production and Technology Centre category is Robert Bosch, spol. s r.o. in the South Bohemia Region. Robert Bosch, the German manufacturer of automobile parts, is enlarging its research and testing centre and its manufacturing plant in České Budějovice. The firm’s investment in the Region, worth CZK 2.2 billion, will create 625 new worker as well as graduate positions.

EDUCATION With more than 11 000 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 participates in a number of international research projects. For example, its scientific workers helped to develop a method making it possible to accurately assess and evaluate data concerning biodiversity. The method will assist ecology specialists in finding answers to queries, e.g. how the functioning of ecosystems is influenced by the current loss of natural diversity. The Institute 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.

USEFUL CONTACTS South Bohemian Regional Authority – www.kraj-jihocesky.cz South Bohemian Chamber of Commerce – www.jhk.cz South Bohemian Agency for the Support of Innovation Businesses – www.jaip.cz University of South Bohemia – www.jcu.cz City Authority of České Budějovice – www.c-budejovice.cz Písek

2018

Photo: CzechTourism archives, Ladislav Renner

The project was realised by Hydroservis Union pro s.r.o., together with the Technical University in Liberec, which developed a completely new method of controlling the revolutions of water-powered engines by means of a four-quadrant frequency converter. The new technology makes it possible to increase the output of water-powered engines without the need of any structural adjustments or major changes to the hydrounit.

D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic V. Re gio n s

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 best-known spa, Karlovy Vary, but also of 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 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

Photo: CzechTourism archives

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 Statistical Data Population Gross wage Unemployment

31 June 2017

295,999

1.–2. Q. 2017

CZK 24,551 (approx. EUR 982)

30 October 2017

3.39 %

Source: Czech Statistical Oﬃce

Karlovy Vary

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 industries, textile and clothing industry, 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 the environmentally-friendly 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 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

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a result of the crisis in the East in 2013 and 2014, when the number of incoming tourists plummeted to an unexpected low. The favourable trend is also continuing in 2017, when 219 214 guests were accommodated in the Region in the first quarter of the year, 16.3 % more in comparison with the previous year.

INVESTMENT 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

Photo: CzechTourism archives, David Marvan

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 2016 the airport processed 25 235 passengers, 51.3 % less than in 2015. This decline is due to the continuing decrease in demand on the part of Russian clientele to travel to the Karlovy Vary Region. This resulted in the cancellation of flights from St. Petersburg and the cutting down of the number of flights operated from Moscow to Prague, with a subsequent reduction in related road and rail transport services. In 2016 the airport was considering the possibility of starting summer charter flights from Tashkent, Uzbekistan. This project was realised in 2017, when Uzbekistan Airways operated flights to Karlovy Vary in the summer months. As a matter of interest, the Tashkent to Karlovy Vary flights are historically the longest flights to be operated to and from the Region. The flight distance between Tashkent and Karlovy Vary is approximately 4 300 km and the flight lasts about five and a half hours. In addition, another two new flights were started this year: a regular flight from Düsseldorf, Germany, and summer charter flights from Tel Aviv, Israel. Tourism continues to be one of the most important sectors in the Karlovy Vary Region. Last year, a record number of nearly one million tourists visited the Region. This was the first time the Region hosted such a large number of visitors, thus becoming the forerunner on a national scale in increased tourism. The increase in the number of tourists is mainly due to the security situation in Europe and the return of German patients to spas. The growing influx of tourists to the Region has been noted for several years. The situation is currently returning to the heyday of spa sojourns, which came to an end as

2018

P anattoni Park Aš – located in the

close vicinity of the German A93 motorway, 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. S kalná – 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.  T he 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 the R6 road 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

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 a low-cost and experienced workforce, especially in mechanical and electrical engineering and textile production, in addition to having a good knowledge of the German language. 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. The Cheb Industrial Park is rated as the best in Central Europe by the experts who compared industrial parks across Central Europe as part of the CIJ Awards 2017 competition. Cheb gained the Best Industrial Park rating, thanks to investments by the Accolade financial group in industrial rental buildings for DHL, BWI, and Tchibo companies. No other park has received a higher rating in recent years. In addition, the Tchibo building won another prize, when it was rated “the best separate industrial building designated for rent”. The developer of those industrial buildings is Panattoni Europe. “We’ll carry on investing in the Cheb Industrial Park. Currently we are renting more than 100 000 sq. m of industrial surface area and are planning to more than double our investments,” says Milan Kratina, Director of Accolade. The valuations are perfect. As mentioned before, the three renters of the Accolade buildings in Cheb are DHL, BWI, and Tchibo. DHL has installed its distribution and service facilities there for clients of Sky Deutschland satellite television. BWI manufactures silencers in Cheb for leading car makers. Its customers are, for example, BMW, Volvo, and Audi. The third renter is Tchibo company, which has rented about 40 000 sq. m of area and, in a few months, will also occupy the other part of its building. In total, it will be using nearly 80 000 sq. m. of rental area. The structure rented by Tchibo will become the second largest industrial rental building in the Czech Republic. Tchibo is known as a company which sells coﬀee, but it is also one of the largest online sellers of clothing and accessories. And the area it is renting in Cheb will be used for its online activities. “Evidence of the importance of the Cheb Industrial Park is the growing interest of other potential renters. I expect that the Cheb Industrial Park will gradually grow into one of the largest of such parks in Central Europe. Our estimate is that ultimately our rental buildings in Cheb will be worth five billion Czech crowns,” Kratina added. 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. An important role is also played by the Cheb-Karlovy Vary-Ústí nad Labem regional railway. There are a number of secondary vocational schools in the town, focused on mechanical engineering and the building industry. At the end of 2014, three new surfaces suitable for industrial construction were added to existing investment opportunities in the Karlovy Vary Region.

D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic V. Re gio n s

USEFUL CONTACTS 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 Czech North – www.usteckonadlani.cz

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 tourists. 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, Statistical Data Population

31 June 2017

Gross wage

CZK 26 211 1.–2. Q. 2017 (approx. EUR 1 048)

Unemployment

30 October 2017

Source: Czech Statistical Oﬃce

820 725

5.5 %

established in 2000, the Bohemian Highlands, and the Labe Sandstones protected landscape areas, a part of the Kokořín area and the Lužické hory, the lovely pathway along the Labe with Porta Bohemica, the Tiská Walls rock formations, and many others.

ECONOMIC POTENTIAL The area extending around Litoměřice and Louny is known for hop cultivation and vegetable growing. 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 recultivated 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 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 Nupharo, the new Technological and Innovation Centre in the Region, situated not far from Ústí nad Labem. Its business incubator supports start-up firms by helping them to apply for grants from the European Union, or to obtain advantageous loans for investment,

2018

C z e c h R e p u b l i c â&#x20AC;&#x201C; Yo u r Tr a d e Pa r t n e r 49

D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic V. Re gio n s

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 beside 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 as a region with 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 town 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 – 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. In 2016, the industrial developer, Panattoni Europe, started the 4th phase of a project for the Chinese Yanfeng Company, the largest global manufacturer of car interiors. The existing production facility will be extended by another 11 000 sq. m, which will make it the largest industrial building in the Ústí Region with a total surface area of 45 000 sq. m. Owing to the expansion, Yanfeng Czechia Automotive Interior Systems s.r.o. will increase the number of jobs by approximately 200, to a final 1 500 by the end of the year. Panattoni Europe is building the entire manufacturing compound to the order of the client-owner. More than 10 investors operate in the Žatec Triangle, where over 2 500 people are employed. In May 2016, Kiswire company started preparatory earthworks in the south-western part of the Triangle Industrial Park on an area of 20 ha, where it will build a plant for the manufacture of steel wire and cord fibre for tyres and the

automotive industry. Trial operations will start at the beginning of 2017. The project will cost CZK 2.5 billion and will be completed at the end of 2020. By then, it will be employing 300 people. 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 Nexen Company 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 area in the CTPark Teplice, where a high-tech Repair Centre is being 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. In October 2016, the American company, SSI Technologies, world leader in the manufacture of ultrasound sensors for the automotive industry, opened its new manufacturing plant in the Region. This is the company’s first manufacturing plant to be located in Europe. By 2018, some 200 people, workers as well as highly skilled technicians, will find employment there. The firm chose the Ústí Region and the locality of Pestanov for its activities because of its close proximity to the frontier with Germany and connection to the main transport routes and the airport. 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 structures to investors preferring already existing facilities. Another foreign investor, the Japanese HI-LEX Corporation, came to the Region in 2017. The Corporation, manufacturing parts for transport vehicles, building and industrial machines, as well as household appliances, founded the company HI-LEX Czech, s.r.o. This company will make door systems for cars. The firm will invest CZK 1.16 billion in the new factory to be located in Most. Its construction will be completed in June 2018. In the first phase, HI-LEX Czech will take on 100 workers and is planning to employ up to 250 people by 2023.

EDUCATION Ústí nad Labem is also an important centre of tertiary education, led by 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). Students come from various countries, but most of them, on a long-term basis, come from the Russian Federation and Turkey. 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.

2018

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). 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, Jizerské hory, Lužické hory, Bohemian Paradise, Kokořín), seven National Nature Reserves, eight National Natural Monuments, 35 Nature Reserves, and 56 Natural Monuments.

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. Scientific 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 scientific 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 infrastructure 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).

Liberec

2018

Photo: CzechTourism archives, Ladislav Renner

LIBEREC REGION

Skleněná bižuterie, a.s. Alšovice 156 468 21 Pěnčín VAT No. : CZ00480851 www.beadworld.eu (www.beadworld.cz), www.beadgame.eu (www.beadgame.cz)

Skleněná bižuterie, a.s. came into being in Alšovice, Jizera Mts, North Bohemia after 1948, when it became part of an enterprise associating glassworks and glass workshops in and around Jablonec. The enterprise exists to this day. We are now one of the most important manufacturing firms in the region, a company with a long glassmaking tradition, currently employing some 45 people. Most of our employees have been brought up and trained in specialised glassmaking schools and are therefore a guarantee of exquisite workmanship. We use traditional production processes and meet all EU and REACH regulations in our manufacture. We are carrying on a glassmaking tradition in our region which goes back to the 14th century. The costume jewellery industry began to develop two centuries later, but the manufacture of pressed beads only started at the beginning of the 18th century. Glass beads soon became a favourite export article and a highly demanded fashion accessory. In the Jablonec region, this kind of production experienced a great boom in the 1920s, when small glassworks began to sprout up all around, laying the foundations for today´s famous Jablonec costume jewellery production. The bead pressing technology originates in the Jablonec region, which is indeed its cradle. This technology was not used anywhere else at that time. The oldest bead pressing works in the region came into being in 1860. Another one was built in Huntířov five years later. After that, small glassworks began to appear in large numbers in the area between Jablonec Nad Nisou and Železný Brod. Many of them can be found there to this day, although they no longer serve their original purpose. Nevertheless, they lend the countryside a special atmosphere, reminiscent of the one-time flourishing local glassmaking cottage industry. With its wide range of products, Skleněná bižuterie, a.s. has become the largest manufacturer of glass beads in Bohemia. We continuously innovate our products and enlarge our product portfolio each year. Our current selection comprises some 30 000 items of beads and approximately 5 000 costume jewellery items. Our production possibilities, however, run into millions. The combination of shapes, shades and surface finishing is inexhaustible. We also make gift and decoration objects, glass tiles, art glass and decorative pieces. Our glass components for chandeliers are in great demand.

Recently we renewed the production of board and children´s games, with the most popular being the Czech glass mosaic „KREATIVEC 4in-1“ and the tactical and brainstorming 2-in-1 board game, named „KUBIK‘S Treasure“. Others are currently under preparation. The secret of the company´s success on world markets rests on the quality of its products and the flawless craftsmanship of their creators. Self-sufficiency is a valuable asset boasted by our firm. Today we make most of the fireclay products needed in glass processing ourselves. We manufacture our own moulds for shaping the glass, thus minimising the risk of our designs being copied. Our customers are thus guaranteed of getting original products to meet their needs. We do all the production processes and much of the surface finishing ourselves. We collaborate with reliable firms to do the follow-up surface finishing, in the case of not having our own technologies. We provide employment to local people through our partner firms, which assemble our glass beads into bunches or use them to make costume jewellery. We are not and do not want to be manufacturers who merely copy others with the aim of cutting the price of the products at all costs. Since 2007, we have been presenting our products under a new trademark, Beadworld glass costume jewellery. Beadworld, Skleněná bižuterie, a.s.

In 2016, we enlarged our production programme, which now also includes products and board games for children. These items are presented under the Beadgame trademark.

Our trade partners are world-renowned businessmen who appreciate high quality Czech products. We collaborate with designers who have the capacity to respond promptly to customer requirements from all over the world, and who are endowed with the skills to create original costume jewellery. The aims of Skleněná bižuterie, a.s. are to uphold and support the Czech glass- and costume jewellery-making tradition, acquaint new generations with glassmaking and the manufacture of costume jewellery, with the assistance of children and help to bring Czech glassmaking back to its former fame. In the premises of our ﬁrm, we have opened a bead-making museum open to the public, where visitors can become acquainted with the history of bead making and all the technological processes, and touch the items for themselves. On certain days and times, visitors are able to come and view the actual production process with their own eyes and, with the assistance of a professional craftsman, try out what it feels like to be sitting in front of the furnace and creating their own glass objects. We have prepared small workshops for children, where they can stick glass mosaic together to make their own pictures or thread beads to make necklaces.

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 approximately three billion Czech crowns in the Liberec compound. 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. Other 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 2016, the Liberec Region obtained funds for investment mediated by CzechInvest Agency to the amount of nearly CZK 114 million. CzechInvest mediated invitations for bids involving four projects in the Region. The investment in Devro, amounting to nearly CZK 1.527 billion, is among the ten largest investment projects in the entire Czech Republic. The firm is planning to enlarge the production of collagen sausage skins for the food industry and to employ an additional 120 new workers. The firm based in Jilemnice is a part of the Devro supranational group with its headquarters in Scotland. Devro is one of the largest employers in the Liberec Region, investing hundreds of millions of crowns in modernisation and new technologies each year. In 2017, Liberec entered another chapter in the weaving technology history book. The WÚTS testing laboratory in Liberec is at present testing a prototype of the DIFA pneumatic loom. The loom can make 3-D distance fabrics of high-strength polyester filament yarn with a variable distance. Its development started last year in collaboration with a Taiwan research textile institute. “The Taiwanese developed a new structure of 3-D fabrics, for which they obtained a patent, but did not have the knowhow to build a machine that would be able to weave it. That is why they addressed us,” explains Miroslav Václavík, Managing Director of VÚTS. “We want to present the DIFA machine at the ITMA international textile and garment technology exhibition, the world’s largest such exhibition, in Barcelona in 2019.”The new 3-D fabrics can be used for commercial purposes, for example as a basis for the manufacture of water jetties, boats and sportswear. “They can also help in road accidents. For example, if a truck overturns, the fabric can be put under the truck, be inflated and, thanks to its firmness, will move the truck back on to its wheels,” says

2018

Václavík to illustrate one of the potential uses of the fabric.

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 schools of glassmaking and costume jewellery. Higher learning is represented by the Liberec Technical University, which runs 110 study programmes with more than 200 branches of study. In 2017, 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, its researchers have developed a new nanofiber material for artificial blood vessels. This material greatly reduces blood coagulation risks and post-cardiac surgery complications. Its great advantage is that, unlike the artificial blood vessels currently being used, it degrades in the body. The new material is being tested on animals. Clinical trials will be held in five years’ time at the earliest. In 2016, the project obtained the prestigious Théophile Legrand International Prize for Textile Innovation, awarded to innovations bringing benefit to mankind.

Statictical data Population

31 June 2017

Gross wage

CZK 26 373 1.–2. Q. 2017 (approx. EUR 1 054)

Unemployment

30 October 2017

440 940

3.73 %

Source: Czech Statistical Oﬃce

USEFUL CONTACTS: Liberec Region – www.kraj-lbc.cz Liberec Regional Oﬃce – www.liberec.cz Liberec Regional Chamber of Commerce – www.khkliberec.cz Technická univerzita Liberec (Liberec Technical University) – www.tul.cz

Photo: CzechTourism archives, Richard Klíčník

According to the 2016 figures, an increasing number of tourists, both foreign and local, visit the Liberec Region. Local tourists account for nearly 80 % of visitors to the Region. Of the total number of foreign tourists (37 448) who spent time in the Liberec Region, 56.8 % were Germans, 12.2 % Poles, 6 % Slovaks and 4.8 % Dutch. From the beginning of 2016, 385 040 tourists visited the Liberec Region and used its accommodation facilities.

D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic V. Re gio n s

HRADEC KRÁLOVÉ REGION The Hradec Králové Region is situated in North-East 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. Statistical Data Population

31 June 2017

550 958

Gross wage

1.–2. Q. 2017

CZK 26 366 (approx. EUR 1 054)

30 October 2017

2.51%

Unemployment

Source: Czech Statistical Oﬃce

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 Mountains, 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, known for the treatment of diseases and disorders of the nervous system, the motor system, and skin diseases. The spa town is also a well-known winter sport resort.

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. Adršpach

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 thrives on the land bordering the River Labe. From the sectoral point of view, employment is high in branches such as car making, manufacture of

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Hradec Králové

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 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).

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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. In 2016, the Region attracted investments worth CZK 3 109 million in 2 investment projects, mediated by the CzechInvest Agency, which helped to create 250 jobs. There is a number of industrial parks in the Region — for example in Kvasiny (Rychnov nad Kněžnou District) and Vrchlabí (Trutnov District). Further development is expected of the Kvasiny Industrial Park, where Škoda Auto has its manufacturing plant. The foundations of an exemplary success story were laid 25 years ago. The partnership between the Volkswagen Group and Škoda Auto began on 16 April 1991. From that point on, the traditional Czech brand evolved from being a regional market leader to an internationally successful vehicle manufacturer. ŠKODA AUTO will invest CZK 7.2 billion in the location and create more than 2 000 new jobs by 2018. In 2017 the works employed 8 000 people. Currently altogether 10 500 employees, including 3 000 foreigners, work in

Photo: CzechTourism archives, UPVISION

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

D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic V. Re gio n s

the Kvasiny Industrial Park. In addition, in 2017 the Kvasiny local government approved a new territorial development plan which is essential for the further development of the Kvasiny Industrial Park. In 2015, ABB company opened a new manufacturing plant in the 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 other issues, is concerned with the development of applications for intelligent networks and cybernetic safety. In 2017, Pewag company completed the construction of its new plant in Vamberk, where it will manufacture modern technical chains using new technologies. After its enlargement, the company will employ about 500 people. The Region also supports research and development. The plan is to build a European Centre of Excellence in the Region for the development and manufacture of modern turboprop aircraft engines. It will be one of the world’s most advanced research centres where new advanced turboprop engines will be developed. The investment, to cost approximately CZK 200 million, will be followed by a further investment of CZK 10 billion for the manufacture of the new advanced turboprop engines. There are only five such centres in the world. “In conjunction with Prague’s Aircraft Research and Testing Institute, we presented a joint tender, which we eventually won,” says Jiří Vysoký of Orbis Avia, co-founder of the project together with the Czech Technical University (ČVUT) and GE.

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. The Faculty carries out contract research and development for firms and research organisations, e.g. 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.

Janské Lázně:

From the mountains right into thermal mineral water

JANSKÉ LÁZNĚ – a picturesque mountain townlet at the base of Černá hora (Black Mt), which attracts tourists and cyclists in summer, skiers and winter sports lovers in winter, and spa guests all the year round. Janské Lázně, the only spa resort on the Czech side of the Krkonoše (Giant Mts), won world renown already in the early 20th century for its successful rehabilitation of polio patients. Today, visitors are offered spa care focused on the treatment of motoric, nervous and respiratory disorders in modern facilities for adult and child patients. The spa treatments also include bed rehabilitation care for post-injury and post-surgery patients. All patients and visitors are offered the use of the spa aquacentre with thermal mineral water, ﬁtness centre with professional therapists and a wide range of relaxation and treatment packages. Janské Lázně has the largest ski area in the Czech Republic – the Černá hora - Pec Ski Resort, where skiers have the use of up to 44 kilometres of ski slopes on a single ski pass. Spa treatment in Janské Lázně is based on the use of thermal mineral water from local natural sources and the pure mountain climate. For whatever reason you may decide to spend time in Janské Lázně – spa treatment, relaxation, mountaineering or simply enjoying the countryside with local historical sites, you will not be disappointed.

Státní léčebné lázně Janské Lázně ✆ +420 499 860 303 | sales@janskelazne.com

www.janskelazne.com

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PARDUBICE REGION 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. 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, 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 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. In addition to the IVECO bus manufacturers, the automotive sector also plays an important role. 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

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(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 bigger towns (most of them are available in Pardubice). The largest brownfields in the Region are usually former military areas.

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.

Statistical Data Population

31 June 2017

Gross wage

CZK 25 458 1.–2. Q. 2017 (approx. EUR 1 018)

Unemployment

30 October 2017

Source: Czech Statistical Oﬃce

517 270

2.40 %

MEMBER OF

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

For example, the Pardubice City Industrial Park is situated on the western outskirts of Pardubice, some 6 kilometres from the city centre. It lies in the cadastre of Staré Čívice village between the I/2 highway leading to Kolín and Prague and the Prague-Pardubice railway line, which is a 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 on 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 the 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 started 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 2016 Foxconn Global Services Division (FGSD) announced the launch of a new business line – a new Mobile Repair Centre for the Europe, Middle East, and

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Africa region in Pardubice. The FGSD investment creates up to 250 new jobs in Pardubice and expands the company’s competencies into a fresh, lucrative area of business: mobile phone full lifecycle management. The total investment in the Mobile Repair Centre is planned to reach up to USD 2 million (cca CZK 55 million). To satisfy the needs of the new Centre, FGSD needs up to 250 new employees: up to 200 in the direct labour force and up to 50 in technical and administrative positions. In 2017, another new foreign investor arrived in Pardubice: the Japanese firm of Central Glass, which chose this locality for its subsidiary in order to be closer to its customers in the Czech Republic and in other European markets. The choice fell on Pardubice because of its easy accessibility, suitable location in the Semtín Zone Industrial Park, and the tradition of the chemical industry, which this regional centre can boast. This is quite a new investment project in the lithium batteries area through which Central Glass is entering the Czech and the European markets. Synthesia company, too, welcomes this arrival. “It is an honour for us to welcome such an important and forward-looking investment project in our Semtin Zone Industrial Park. It is a confirmation

Photo: CzechTourism archives, Ladislav Renner

Pardubice – Pernštýnské náměstí Square

D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic V. Re gio n s

of the correct strategy and the great potential of our park,” says Josef Liška, Managing Director of Synthesia, a.s. Central Glass concentrates on the production of electrolytes for electric car batteries. Another reason why the Japanese company chose Pardubice for the location of its factory is the potential possibility of collaboration with the local university and a secondary chemical school. Under a collaboration contract, the firm will oﬀer an additional 40 to 50 new jobs. The planned annual production of the new factory is some 20 000 metric tonnes. Together with the planned production in Pardubice, the annual output of Central Glass worldwide will be 50 000 metric tonnes of electrolyte. In addition, the Pardubice factory will be the first such plant in Europe to manufacture large quantities of electrolyte for lithium electric car accumulators. The arrival of Central Glass is clear evidence of the fact that Pardubice is an important locality for investors. The new investor could also be an important factor in the area of education.

EDUCATION

Photo: CzechTourism archives

Pardubice University, the only university in the Region, is 66 years old. With

regard to student numbers, with its 10 000 students, the University is ranked as a middle-sized university in the Czech Republic. The University consists of seven faculties: Faculty of Chemical Technology, Faculty of Economics and Administration, Jan Perner Transport Faculty, Faculty of Arts and Philosophy, Faculty of Restoration, Faculty of Health Studies, Faculty of Electrical Engineering and Informatics. Students can choose from different Bachelor’s, follow-up Master’s and Doctoral degree programmes in the following fields:  N atural and Technical Sciences focused on Chemistry, Chemical Technology, Biotechnology and Biochemistry, Electrical Engineering, Informatics, Transport and Communication Technologies and Material Engineering;  S ocial Sciences focused on Economics and Administration, Philology, History, Philosophy and Sociology;  H ealth Sciences including inter-disciplinary programmes;  A rts in the field of historical preservation, art restoration, conservation techniques and technologies. The University offers more than 60 study programmes with almost 130 study specialisations. All are designed in accordance with the Bologna Declaration and modern trends in higher education. Most Bachelor’s study courses offer follow-up Master’s programmes. Full-time and part-time studies are available. Apart from teaching, the University of Pardubice is also renowned for its numerous scientific and research activities, which contribute to an excellent national and international reputation. The numerous specialised departments and other organisations, institutions and associations which operate at the university all contribute to this fact.

Litomyšl

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ZIMATECHNIK Ltd. Zimatechnik is a Czech commercial-engineering company with a wide range of activities. RAILWAY TECHNOLOGY Development of bogies for tramcars, subway cars and railway wagons. Design documentation development of tramcars; including exterior design, interior design, strength calculations of bogies and coachwork “MKR” Deep modernization of TATRA tramcars in accordance to the “barrier-free program” (35% low ﬂoor). Deliveries of components for railway technology from leading Czech and European manufacturers (DAKO-CZ, ST-OS, HŽP, MIKON, WIKOV and others). These are brake systems, dampers, springs, reducers, door systems, sanding devices, rubber technical products and more.

POWER ENGINEERING ZIMATEHNIK Ltd. presents a unique patented environmental technology of HEDVIGA GROUP PTR 1000 – utilization of industrial and municipal waste. This technology PTR – thermal decomposition of materials, biomass, solid alternative fuel, rubber to eﬀective materials and energy!

Reference installation PTR MicroPowerPlant – HEDVIGA GROUP London, 2016–2017

ZIMATECHNIK Ltd. Na Balkáně 61, 582 63 Ždírec nad Doubravou, Czech Republic Tel: +420 739 337 817, Email: robert.malek@zimatechnik.cz

www.zimatechnik.cz www.hedviga.eu

D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic V. Re gio n s

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 Václav Havel Airport Prague 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 are the historical centre 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 The Vysočina Region traditionally holds a dominant position in potato growing. As in previous years, in 2016, too, the Region accounted for more than onethird of the total potato production in the Czech Republic. The Region also holds first position in the harvesting of fodder crops cultivated on arable land and in maize production (17 % of national output). With regard to livestock production, the Vysočina Region specialises in cattle and pig rearing.

Statistical Data Population Gross wage Unemployment

31 June 2017

509 155

1.–2. Q. 2017

CZK 24 442 (approx. EUR 905)

31 October 2017

4.61 %

Source: Czech Statistical Oﬃce

As concerns 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 output in the Region. In 2016, 139 industrial enterprises with 100 and more employees had their seats in the Vysočina Region, which accounted for 6.0 % of the national output. These industrial enterprises employed 49 835 people, which is 6.0 % of the country’s total employment. Altogether 432 600 people over 15 lived in the Vysočina Region in 2016, according to the Czech Statistical Oﬃce. The workforce consisted of 250 800 people, i.e. 58.0 % of the Region’s total number of inhabitants aged 15 and more years. Of this number, 242 900 people were employed (56.2 % of inhabitants aged 15 and more years). The primary sector (agriculture, forestry, fisheries) has an exceptional position in the Vysočina Region, showing the highest proportion of employed people in inter-regional comparisons on a long-term basis. In 2016, 16 300 people were employed in the primary sector, which accounted for 6.5 % of the total number of the employed. In the secondary sector, a wavering trend has been observed in the Vysočina Region since 2006. The highest proportion of the employed (48.7 %) was recorded in 2007. In 2016 this proportion was 47.1 %. In absolute figures, this amounted to 118 800 people. Although the importance of the tertiary sector is increasing on a long-term basis and its proportion of the total number of the employed keeps growing, in 2016 the employment rate in this sector declined (109 500 people, which accounted for 43.4 % of the employed). The most important industrial sectors in the Vysočina Region are metalworking, engineering and the automotive industry, specifically the manufacture of car components. The leading industrial enterprise in the Vysočina Region is Bosch Diesel, which manufactures diesel fuel injection pumps for the automotive industry. It is the largest employer in the Region. Recently it started pilot projects for interlinked industrial solutions in areas such as real time monitoring, 3D printing, and data retrieval. Bosch operates all three levels of interconnection: sensors, software, and services. The company is striving for the transformation of business models, mobility and technologies focused on IoT and artificial intelligence. Another important engineering enterprise in the Region is Motorpal Jihlava, which has a similar production programme to Bosch Diesel. The largest clothing manufacturing enterprise in the Region is the traditional underwear manufacturing firm, PLEAS Havlíčkův Brod, owned by the international SCHIESSER GROUP AG based in Switzerland. An important industrial employer in the Havlíčkův Brod District is Futaba Czech, the supplier of components for the automotive industry which started production in the Havlíčkův Brod–Baštinov locality in 2005. The construction of this plant on a greenfield site was the first investment project of the Japanese concern in continental Europe.

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Vysočina – Stašov

Třebíč

Another foreign investor to locate a plant in the Region, specifically in the Pelhřimov District, is Valeo Compressor Europe — an important employer in the Region — manufacturing compressors for car air-conditioning units. Its customers include leading global car manufacturers (Renault, PSA Peugeot Citroën, Mercedes, Toyota, Volvo, Nissan and others). Engineering is represented in the Pelhřimov District by the traditional manufacturer of agricultural machinery, AGROSTROJ Pelhřimov. In recent years, the firm has significantly broadened its production range and increased its output. ŽĎAS company is a prominent industrial enterprise in the Žďár District. It is one of the most advanced Czech engineering firms. For more than 65 years, it has been a modern and reliable manufacturer of forming machines, rolled products processing machines, metallurgical products and pressing tools. Its production halls are fitted with high-quality machines for heavy- and light-duty machining, assembly and product testing. The firm supplies its products to nearly 50 countries worldwide. In August 2016, it became a shareholder in CEFC China, one of the largest Chinese private firms. 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 cooperative – 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.

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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 Machine 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 In 2016, more investors came to the Region than in the preceding three years. In that year, CzechInvest mediated six investment projects to be located in the Region, to the total value of more than CZK 2.5 billion. When completed, they will create 500 new jobs. The Region has several industrial zones. One of these, the Jihlava Industrial Park, is situated in the northern part of the city of Jihlava, in the close vicinity of the D1 motorway, linking up with the city’s industrial agglomeration, in which important firms such as Bosch Diesel, Automotive Lighting, and Kronospan have their manufacturing facilities. The Žďár nad Sázavou-Jamská Industrial

Photo: CzechTourism archives, Jaroslav Mareš

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

D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic V. Re gio n s

Park lies on the south-eastern outskirts of the city, 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 on the south-western outskirts of the town of Bystřice nad Perštejnem (10 000 inhabitants) in close proximity to 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 linking Prague and Brno. One of the important manufacturers sited there is Valeo Compressor Europe, which manufactures compressors for air-conditioning units in passenger cars. With regard to new investors, another Asian industrial actor is planning to start a factory near Jihlava, its first plant outside of Asia and the USA. The investor is the Taiwan firm Lemtech, which manufactures metal parts for the electronic and automotive industries. Another new factory making car parts was opened in the Region at Bystřice nad Pernštejnem by Cooper-Standard. The factory will start supplying components for prestigious international car factories at the end of October 2017 and will employ up to 450 people. Huhtamaki Czech Republic, a company making flexible packaging laminate, has announced its plan to enlarge its plant at Přibyslavice near Třebíč. It will build a new manufacturing hall fitted with modern technology to make egg packaging. The project will cost CZK 805 million and will employ 45 people. The firm obtained an investment incentive for their five-year project.

(English or German). Exchange students from partner universities attending within the Erasmus+ programme can choose from courses taught in English. Currently, nearly 2000 full-time and part-time students are enrolled in programmes there. Some detached workplaces of other universities also oﬀer the attendance form of study for the Bachelor’s Degree, such as the Czech Agricultural University Prague – workplace Czech Agricultural Academy in Humpolec, Horse Breeding (three years) – and the University of Chemical Technology (Conservation, Restoration of Works of Art) in Světlá nad Sázavou.

Pilgrimage Church of St John of Nepomuk at Zelená hora in Žďár nad Sázavou

Photo: CzechTourism archives

EDUCATION In 2016, 13 secondary vocational schools provided education in the Vysočina Region. Some 800 students attended the schools in the 2015/2016 school year. Two universities (The College of Polytechnics Jihlava /VŠPJ/ and the West Moravia University in Třebíč) have their seats in the Vysočina Region. At VŠPJ, the language of instruction in most programmes is Czech. However, the Bachelor’s degree programme of Finance and Management taught in English has recently received accreditation. Some courses are oﬀered in foreign languages

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Brno – Tugendhat Villa

South Moravia ranks among the regions with 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, Brno-City, 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 Chateaux. 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, chateaux, castle ruins, churches, and synagogues.

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ECONOMIC POTENTIAL The South Moravia Region is noted for its great economic potential. Its created gross domestic product accounts for 10.9 % of the national gross domestic product. The size of the proportion of the Region’s GDP amounts to nearly the proportion of the Region’s population to the population of the Czech Republic, which is 11.1 %. In view of the industrial tradition of Brno and its environs, industry holds an important position in the Region’s economy, accounting for 30.4 %. Agriculture, another traditional sector, especially in the southern parts of the Region, accounts for just 2.9 %. Construction accounts for 6.8 %, while the developing services sector accounts for 59.9 % of GDP. 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.

Photo: CzechTourism archives, UPVISION

SOUTH MORAVIA REGION

D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic V. Re gio n s

Statistical Data Population

31 June 2017

509 155

Gross wage

1.–2. Q. 2017

CZK 24 442 (approx. EUR 905)

31 October 2017

4.61 %

Unemployment

Source: Czech Statistical Oﬃce

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.

INVESTMENT In 2016, CzechInvest Agency mediated CZK 2 834.39 million worth of investments by ten investors in the South Moravia Region. In 2016 again, the Region, in particular Brno, affirmed its position as an ideal locality for a broad range of firms, not only for shared services centres or IT firms. A comparison of eight Central European cities shows that, in addition to the lowest level of rentals (approximately EUR 13.5/sq. m), the Region also offers the lowest wages for IT specialists. Foreign firms consider the South Moravia Region and its centre, the city of Brno, a suitable location for investment, with good prospects for development. Several supranational concerns, such as Thermo Fisher Scientific, Honeywell, IBM, and Red Hat, have already placed their development workplaces and advanced production there. In addition, Deutsche Telekom Services Europe Czech Republic s.r.o., the largest German telecommunication services provider, which became the 2016 Investor of the Year in the area of IT and Shared Services, opened its Shared Services Centre in Brno. The Centre provides services to European clients, especially in the area of finance and accounting. The project worth CZK 500 million will create 565 new jobs within three years. Another investor, Spielberk Office Centre, which won the 2016 Business Real Property Award in the Technological Centres and Services category, placed its premises in an attractive part of Brno. The Centre, covering an area of more than 80 000

sq. m, is easily accessible from the D1 and D2 motorways. It offers high quality office space in five separate three-level buildings. In 2017, the South Moravia Region offers a variety of investment opportunities in two industrial parks. The first is the Kollárova-Blatnická Park in Veselí nad Moravou, covering an area of 30.9 ha, suitable for small industrial production, manufacturing services and crafts, which can also serve as a commercial base for actual production. The other industrial park is Blučina, covering a surface area of 55 ha, and can be used for industrial production and logistics. Other service and commercial uses (e.g. data logistics and electricity production) are also possible.

EDUCATION There are several public and state-run higher learning institutions in Brno: Janáček Academy of Music and Performing Arts, Mendel University in Brno, University of Defence, Veterinary and Pharmaceutical University Brno, and Brno University of Technology (VUT). In 2015, the South Moravia Region earmarked 3.8 % of its GDP for Science and Research, ranking it first among Czech regions in respect of R&D spending. The City of Brno in particular stands out for its support of Science and Research, especially as regards IT, which has earned it the nickname of the “Czech Silicon Valley”. In 2014, the Brno University of Technology (VUT) marked 115 years of its existence. For years, this institution has been figuring high in the best world universities’ rankings, prepared each year by Quacquarelli Symonds Limited. VUT appears within the 4 % of the best world universities and in 2015 it fared well, especially in the Engineering – Civil and Structural category, where, in competition with the other universities from all over the world which had entered the competition, it was placed in the 151st to 200th position. Brno is also the seat of the Centre of Scientific Excellence (CEITEC) in the area of Life Sciences, Advanced Materials and Technologies. This is a joint venture of Brno’s six most important universities and institutions of higher learning, supported by the South Moravia Region and the City of Brno, specifically Masaryk University, Brno University of Technology, Mendel University in Brno, the Veterinary and Pharmaceutical University Brno, the Veterinary Medicine Research Institute and the Institute of Physics of Materials, Czech Academy of Sciences. One of the projects where remarkable results have been achieved is its research programme, undertaken jointly with Sweden’s Karolinska Institutet, concerned with the development and formation of the vertebrate face diﬀerentiation. The results of this long-term collaboration have been published in the prestigious eLife magazine. In another study, scientists unveiled the structure and activities of bee viruses. They were the first to describe the viruses down to the level of atoms and to monitor the changes taking place in the structure of viruses while infecting the cells. In 2017, two new research groups were formed in the Centre. They will concern themselves with research aiming at more accurate diagnostics and targeted therapy, not only in the case of tumorous diseases.

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 Veletrny 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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TEMPLAR WINE CELLARS OF ČEJKOVICE

The Knights Templar Wine Cellars in Čejkovice were founded in the early 13th century by the Knights Templar, who came to the Czech lands from France and built a fort in Čejkovice. In the middle of the 18th century, wines were grown in that region on nearly 700 ha of land, mainly in Čejkovice and surroundings. The grapes were also processed there. From 1882 to 1918, the cellars were owned by the Habsburg family. Today, the Wine Cellars operate as a cooperative.

wine barrel, used for the storage of red wine, is 20 250 litres. In terms of size, the Knights Templar Wine Cellars rank alongside large winegrowing enterprises.

The Knights Templar Cellars winegrowing cooperative has a storage capacity of 6.5 million litres.

www.templarske- sklepy.cz

Its latest reconstruction project was the modernisation of the bottling line, which took place five years ago. Its filling capacity is up to 2 000 bottles. The volume of the largest

Templářské sklepy Čejkovice, vinařské družstvo 696 15 Čejkovice 945 Tel.: +420 518 309 011 info@templarske-sklepy.cz

REISTEN WINERY

Winery was founded in 1999, originally with the aim of producing exclusively high quality wines for genuinewine connoisseurs, top gastronomic establishments and vinoteques. Reisten specialises mainly in white wines. Among the cultivated varieties, it produces primarily Pinot Blanc, Riesling, Sauvignon Blanc, Chardonnay, Welsch Riesling, Pinot Gris and Traminer. Among the red varieties, it supplies Merlot, Pinot Noir and St. Laurent.

Reisten Winery´s adopted practice is to place its wines in the market in the distinctly sophisticated lines: KABINETT, CLASSIC, MAIDENBURG and MATERLE.

www.reisten.net Reisten s.r.o. Zahradní 288 692 01 Pavlov Tel.: +420 727 963 406 Tel.: +420 724 793 429 info@reisten.cz

Contact person: Ing. Bohdan Špička commercial and marketing director Tel.: +420 730 547 571 E-mail: spicka@templarske-sklepy.cz

The cellars offer some 25 wine varieties, which include: quality varietal wines, vintage wines, attributive wines, cabinet wines, late harvest wines and grape selection wines, archive, ice and straw wines.

D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic V. Re gio n s

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. 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 Statistical Data

ECONOMIC POTENTIAL

Population

30 June 2017

582 970

Gross wage

1.–2. Q. 2017

CZK 25 837 (approx. EUR 986)

30 October 2017

3.37%

Unemployment

Slovácko, and distinctive Valašsko – add to the originality of the Region. The beautiful Podzámecká and Květná Gardens and the Archbishopric Chateau 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 Film Festival 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, the Museum of South-East Moravia, and the Regional Library.

Source: Czech Statistical Oﬃce

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

Photo: CzechTourism archives, UPVISION

Zlín

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w w w. s tim zet.cz STIMZET, the production division of company M&V spol. s r.o. is focused on the production and sale of high quality cutting tools from HSS and HSSCo material. More than seventy years of tradition in modern production procedures and innovations ensures our stable and high quality. High quality tools for holemaking are supplied to professional, industrial companies and trade organisations.

The company’s production programme consists mainly of drill bits, core drills, reamers, countersinks and specialised STIMZET tools made from the highest quality high-speed steel HSS and HSSCo. Currently, the company is one of the most prominent European producers of tools of this type. Aside from the standard products, the company also manufactures specialised tools based on the customer’s requirements.

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M&V, spol. s r.o., Divize STIMZET Jasenická 2092, 755 01 Vsetín, Czech Republic 2018

Tel.: +420 571 878 787 Fax: +420 571 878 788

E-mail: info@stimzet.cz

D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic V. Re gio n s

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, 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 59.0 % and GDP per capita (in PPS- purchasing power standards) in the Zlín Region reaches 76.9 % of the EU-28 average, with the Region holding 5th position among the 14 Czech Republic regions.

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 the 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 airports, 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 70.2 %. 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 15.7 %, with a slight increase annually. The important institution which significantly contributes to this number is the local Tomáš Baťa University in Zlín. With about 9 200 students, the University ranks among the medium-sized Czech universities. The Tomáš Baťa 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).

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 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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Olomouc

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.

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ECONOMIC POTENTIAL The Olomouc Region has a favourable business environment, based on a strong industrial tradition with Statistical Data Population Gross wage Unemployment

31 June 2017

1 286,602

1.–2. Q. 2017

CZK 36 645 (approx. EUR 1 466)

31 August 2017

2.55 %

Source: Czech Statistical Oﬃce

Photo: CzechTourism archives, Libor Sváček

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 (Holy Hill), which was visited by nearly 357 000 people. The ten most visited places and attractions in the Region included the Flora Olomouc Exhibition Grounds, the Aquapark and the National History and Geography Museum in Olomouc, Bouzov Castle, the Olomouc Museum of Modern Art, Helfštýn Castle, the Olomouc Archdiocesan Museum, 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.

D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic V. Re gio n s

a wide range of well developed sectors and branches and a good supply of skilled labour. All these create good conditions for the pursuit of many types of business activities. Especially good conditions for industrial activities exist in what is called the local Business Triangle, formed by the cities of Olomouc, Prostějov, and Přerov and their environments. An advantage is their relative closeness – the distance between them being approx. 20 km. The Region’s other tradition is the processing of metals, which used to be mined there in the past. Over the years, metallurgy became a basis for the development of metalworking and engineering production. After 1989, most of the local manufacturing plants were taken over by foreign investors, who modernised them and incorporated them in their portfolios. The largest companies in this area are Miele technika s.r.o. (white goods), Edwards (pumps and vacuum systems), SSI Schäfer (logistic and warehousing systems) Honeywell Aerospace (aircraft engine parts) and MUBEA (suspension and lightening of vehicle bodies). Electrical engineering has become an especially rapidly growing industry in recent years. Other fast-growing sectors are optics and precision mechanics, which include both traditional and new firms. The most important among these are HELLA AUTOTECHNIK (headlights), Siemens (electric motors and drives), Meopta (optical instruments), and EPCOS (magnetic parts). The food industry also holds an important position in the Region, where agricultural production plays a significant role in the economy. The largest companies located in the Region are SOUFFLET AGRO (cereal products), Nestlé Česko (sweets), OLMA (dairy produce), MJM Litovel (cereals), and ORRERO (cheeses). The textile and clothing industry, the Region’s traditional sector, maintains its position as an important manufacturer and supplier. Other traditional sectors are construction and building materials production based on the supply of local materials. Other large firms located in the Region include ŽPSV (concrete sleepers), Saint-Gobain Construction Products (insulating and building materials), Cement Hranice (cement and building mixtures), and TONDACH (roofing). The Region is also very attractive for tourists. In 2016, 600 106 visitors came

to the Region to see its historical sights and natural beauties and to partake of its varied entertainment. Last year’s turnout of visitors was the highest since 2012. The interest of foreign visitors is growing, especially of those from Poland, Slovakia, Ukraine, and Spain. Good news for local tourism is the continuing increase in the average number of nights spent by spa guests, whose usual stay in the spa hotels is an average of 12 days. With its total number of 685 474 visitors, the Region occupies second place on the national scale, after the Karlovy Vary Region. The Olomouc Region is a popular venue for congresses and conferences. In 2016, more than 85 000 participants attended such events, raising the Region to third position among the Czech Republic’s regions with regard to congress tourism. Visitors were especially attracted to exhibitions in the Flora exhibition grounds, the Olomouc Zoo and its Aquapark, as well as Bouzov, Helfštýn, and Šernberk Castles, the Olomouc Natural Science Museum and the Handmade Paper Mill and Paper Museum in Velké Losiny. The list of the most visited tourist destinations in the Region also includes the Modern Art Museum in Olomouc and the Na Pomezí karst caves.

INVESTMENT The Olomouc Region offers potential investors a number of industrial parks, as well as modern office space. The Olomouc-Hněvotín Technological Park provides investors with 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. There are several industrial parks in the Region open to investors and businessmen, 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. Šlechtitelů, one of the parks which is already serving its clients, is situated on the southern outskirts of Olomouc. 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. The ABSL survey shows that Olomouc will play a key role in the development of the company service sector in the Czech Republic. This is mainly due to the strategic position of the city in the centre of Moravia, its excellent transport connections with important domestic and international business centres, the good availability of office space totalling 77 000 sq. m, and a highly skilled and educated workforce. There are more than 15 international company service centres in Olomouc, which employ some 5 000 people. This sector is one of the most important employers in the Olomouc Region. As the company service sector is showing dynamic growth on the national scale, it is to

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

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Jesenik – Bílá Opava River – Waterfalls

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One such example is BIOMEDREG – Biomedicine for Regional Development and Human Resources (the project is concerned 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 a part of this vast project, new facilities destined for scientific research will be built on a surface area of more than 7 000 square metres. (More at www.cr-hana.eu). RCPTM – The Regional Advanced Technology and Materials Centre – supports the start-up of new firms using sophisticated technologies and applied physical, optical and chemical research, with a special focus on nanotechnologies.

EDUCATION There are three universities in the Olomouc Region. Palacký University in Olomouc, with an enrolment of 22 000, has eight faculties: Theology, Philosophy, Law, Medicine and Dentistry, Education, Science, Physical Culture and Health Science. The Medical Faculty is linked with the Olomouc University Hospital, one of the ten largest hospitals in the Czech Republic. The remaining two universities are the Moravian University, with 700 students oriented towards Economy and Management, and the College of Logistics, with 900 students focusing on Transport and Logistics.

Photo: CzechTourism archives

be expected that similar expansion will also take place in and around Olomouc, both regarding the enlargement of the existing centres and the emergence of new ones. ABSL reports that many new investors are showing an interest in the Region. A great potential for investors is based on the workforce recruited from among the graduates of Palacký University in Olomouc, which turns out some 2 000 graduates each year. The number of these graduates, with good foreign language skills, is a very important factor for company service centres seeking new workers. It is estimated that in 2017 this sector will expand by about 16 % in the Olomouc Region. Investors will also appreciate the lower costs in the Region. For example, in comparison with Prague, they will be spending less, not only on rent and utilities, but also on wages. The average annual salary in Olomouc is EUR 11 000, i.e. approximately CZK 296 000. This is about 29 % less than in Prague, where the average annual salary is CZK 415 500 (approx. EUR 15 388). The cost of living in the Olomouc Region is also lower than in the capital. At the same time, good news for those seeking employment in the company service sector is that wages in that segment are above the Olomouc average. For example, job seekers with previous experience in the HR area can earn CZK 384 000 per year, in Accounting CZK 420 000 and in IT helpdesks also CZK 384 000 p.a. A great advantage is the well-developed real estate market in the Region. There are some 77 000 sq. m of office space in the entire Region, with rentals ranging from EUR 8.5 to 9.5/sq. m/month, some 28 % less than in Prague, where the rentals oscillate between EUR 11.00 and 19.5/ sq. m/month. Only about 4 000 sq. m of office space is currently available to rent. By the year 2020, however, 30 000 sq. m more of office space will be added to this. In April 2016, the American Standard & Poor’s financial services company gave Olomouc a positive A/A-1 rating – a prediction of strong potential growth – which is excellent news for future and current investors. 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 – was established at Palacký University in Olomouc (VTP UP). The Park celebrated its 10th anniversary in 2017. 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.

D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic V. Re gio n s

SIGMA GROUP spol. s r.o.

Postal address: Jana Sigmunda 79 783 49 Lutin Czech Republic Telephone/Fax: +420 585 651 111 +420 585 651 100

• Producer of pumps for thermal and nuclear power generation (feedwater systems, condensate systems, cooling systems, circulation systems, firefighting water systems) • Preparation of pumping station design (turn-key projects) including operation optimalization • A complex provision of consecutive services (installation and commissioning, maintenance) • Certified according to EN ISO 9001:2008, EN ISO 14001:2007, EN ISO 18001:2007

References: • Czech Republic, Slovakia, Poland, Russia, Kazakhstan, Turkey, Egypt, India, Argentina, Cuba, China, Pakistan

www.sigmagroup.cz

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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 as 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 cycling 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 (Tatra Technical Museum in Kopřivnice, Museum of Wagon-Making in Studénka, Museum of Mining in Ostrava-Petřkovice, Dolní Vítkovice, National Cultural Heritage Site of Michal Coal Mine). The Region’s spa industry is 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. Watersport 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

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 2017

1 179 995

Gross wage

1.–2. Q. 2017

CZK 27 526 (approx. EUR 1 101)

30 October 2017

4.31%

Unemployment

Source: Czech Statistical Oﬃce

areas of the Jeseníky and the 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. Since 1989, the Region’s economy has basically changed. New sectors came into being, such as the automotive industry, biotechnology, information and communication technologies, electrical engineering, and the pure technologies sector within power engineering. The number of scientific and research workplaces, too, is increasing, with a corresponding increase in the number of expert workers. There are many successful firms based in the Region. One of them is Tatra, which in 2016 made 1 326 trucks and took on 350 new employees. Siemens, another prospering company, concerned with the manufacture of electro motors, invested CZK 130 million in the construction of a new plant specialising in the production of digitalised motors. Its output in 2017 is expected to be 20 % higher in comparison with the previous year.

INVESTMENT The Moravia-Silesia Region has a number of industrial parks. Two of the most successful are the industrial park in Karviná-Nové Pole and in Kopřivnice, which together host the greatest number of investors. In the Karviná-Nové Pole Park, only a few areas remain vacant for investors. One of the new arrivals is ROBE Lighting from Rožnov pod Radhoštěm, which is concerned with the development and production of light projectors. The firm already has another plant in operation, in Valašské Meziříčí, but in that locality there is no space for its enlargement. Therefore it has decided to invest in Karviná, where it will be using halls vacated for ROBE by the American company Stant Manufacturing, which has moved its production to Ostrava.

Photo: CzechTourism archives, Lenka Jamnická

MORAVIASILESIA REGION

D o i n g B u s i n e s s i n t h e C ze c h Re pu bl ic V. Re gio n s

Ostrava – Dolní Vítkovice

These locations also have the appearance of prosperous industrial parks. Another important industrial park is in Ostrava-Hrabová. 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 a 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 2015, The Czech government approved the award of a subsidy for the construction of the Nad Barborou Industrial Park. It is a brown field in the location of a former coal mine between the towns of Havířov, Karviná, and Orlová. On completion, the Industrial Park will cover an area of 88 ha. In nearby Kopřivnice, Röchling Automotive enlarged its manufacturing plant in 2016. The Röchling Group is a global company employing 8 400 people in

its 77 affiliations in 22 countries. It specialises in the manufacture of plastic parts. The Röchling Automotive Kopřivnice works located in the Vlčovice Park in Kopřivnice has been supplying its products to customers in Europe, Asia, and the USA since 2007. The Kopřivnice works is greatly responsible for the success of the entire group. The firm makes in particular innovative plastic components for the manufacture of undercarriages, engines, and air dampers for the automotive industry. It also makes innovative plastic tanks for selective catalytic reduction, a process reducing emissions from spark ignition engines. The firm has enlarged its space in the industrial park to 31 000 sq. metres. In May 2016, it officially put the new space into use, including warehouses and production equipment. Röchling Automotive currently employs 130 people in Kopřivnice, and this number will further increase. There are several firms in the Region concerned with research and development. One of them is Varroc Lighting Systems. This global development Centre of Excellence is located in Nový Jičín and was opened in October 2016. It has special electronic laboratories with testing facilities, whereby the firm is responding to the growing need for electronic products in connection with the increase in car manufacture. In March 2017, A123 Systems, a manufacturer of advanced lithium-ion batteries, opened a new manufacturing hall in Ostrava. It is the company’s first manufacturing plant to be located in Europe. The plant, situated in the Ostrava-Hrabová Industrial Park, will be making more than 600 000 automobile batteries per year, intended for the European market. In future, the company is planning to employ some 150 people, mainly skilled technicians and engineers. A123 Systems makes new starting battery platforms, which offer environmentally friendlier systems than conventional lead batteries, lower fuel consumption and consequently lower emissions. The firm also operates manufacturing plants in China and the United States.

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.

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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

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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

VI.

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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D o i n g B u s i n e s s i n t h e C ze c h R e pu bl ic VI. Useful Addresses and Information

MINISTRY OF REGIONAL DEVELOPMENT The Ministry of Regional Development is a central governmental authority of the Czech Republic in the matters of regional and housing policy, development of dwelling and housing stock, letting of flats and non-residential 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.

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

your oﬃcial contact partner when looking for qualified Czech-based manufacturers and service providers.  M  ore than 20 years of professional partnership  F ree of charge, mainly bespoke services  O ver 50 oﬃces operating worldwide  E xcellent overview of Czech manufacturers and their production potential

Connecting Czech & world businesses via  B espoke Supplier Search  S ourcing Days  T rade Shows  P rivate Showcases  N etworking Events

CZECH BUSINESS PARTNER SEARCH If you are looking for a partner to assist you with production, you can approach our specialised team with your specific request. CzechTrade will gladly help you to get in touch with the relevant Czech companies.  P ersonal consultation & fillable on-line form at http://www.czechtradeoﬃces.com/services/ czech-business-partner-search  L ist of relevant Czech companies and facilitation of access to selected ones

SOURCING DAYS Tailored event according to your needs Specify your product/services requirements, define qualifications for a potential supplier, and we will organise one-to-one meetings followed by arrangement of company visits in the Czech Republic. This service saves you time:  P recise knowledge of Czech manufacturers and their production potential  B espoke market screening - we identify potential suppliers as per your requirements  S uppliers shortlist - after reviewing each applicant’s profile we select companies you wish to meet  A ll-inclusive package - from providing meeting rooms to accompanying you to companies premises, we cover it all

CZECH EXPORTERS DIRECTORY More information at: www.mmr.cz

Oﬃcial on-line database of Czech exporters and the easiest tool to help you find potential business partners in the Czech Republic. http://exporters.czechtrade.cz/en

WWW.BUSINESSINFO.CZ/EN

CZECH TRADE PROMOTION AGENCY / CZECHTRADE CzechTrade is a governmental business agency of the Czech Republic established by the Ministry of Industry and Trade. Its main objective is to develop international trade and cooperation between Czech and foreign entities. Wherever in the world you are, the Agency is

The oﬃcial business portal that is here to help foreign businesses to navigate the Czech business environment. Current information on its website on the conditions for doing business and on investment and trade opportunities.

Czech Trade Promotion Agency / CzechTrade (Central Oﬃce) Dittrichova 21, 128 01 Praha 2 Green line: +420 224 907 820 E-mail: info@czechtrade.cz Information and contacts for individual foreign oﬃces can be found at: www.czechtrade.eu

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CZECH EXPORT BANK

EXPORT GUARANTEE AND INSURANCE CORPORATION EGAP

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.

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 the 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.

Česká exportní banka, a.s.

Exportní garanční a pojišťovací společnost, a.s.

Vodičkova 34, 111 21 Praha 1 Phone: +420 222 841 100 Fax: +420 224 226 162 E-mail: ceb@ceb.cz

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.ceb.cz

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More information at: www.egap.cz

D o i n g B u s i n e s s i n t h e C ze c h R e pu bl ic VI. Useful Addresses and Information

CZECH TOURIST AUTHORITY  CZECHTOURISM

INTERNATIONAL CHAMBER OF COMMERCE / ICC

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 a visit. CzechTourism objectives are to continuously increase the 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 baroque 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 organizes 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.

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 also for global living standards and 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.

Czech Tourist Authority – CzechTourism Vinohradská 46, P. O. BOX 32, 120 41 Praha 2 Phone: +420 221 580 111 E-mail: info@czechtourism.cz More information at: http://www.czechtourism.com/trade-sites/

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 to diversify Czech exports to prospective markets and to help to establish useful business contacts. In the period of 2016/2017, these workshops were focused on e.g.: Italy, Singapore, Bulgaria, Armenia, Sweden, Brazil, Indonesia, Ethiopia, Peru, Ecuador, China, Finland, Iraq, Uzbekistan, Thailand, Albania, Latvia, Greece, Belarus 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, etc.

International Chamber of Commerce / ICC Florentinum, Na Florenci 15, 110 00 Praha 1 Phone: +420 257 217 744 E-mail: icc@icc-cr.cz More information at: www.icc-cr.cz

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 W  e coordinate incoming business and trade missions  W  e represent our members at international trade fairs  W  e organise conferences, seminars and workshops

promoting export

CONFEDERATION OF INDUSTRY OF THE CZECH REPUBLIC W  e unite the leading companies and industry associ-

ations in the Czech Republic W  e advocate the common interests of our members  W  e influence the economic, social, and environmental policies in the Czech Republic  W  e improve business conditions  W  e promote international trade and investment

Svaz průmyslu a dopravy České republiky Freyova 948/11, 190 05 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

WE ARE  T he largest and most influential independent organ-

isation of employers and entrepreneurs in the Czech Republic A  representative of the Czech Republic’s leading companies, representing a crucial part of the industry – especially the automotive, electronics, chemical and mechanical engineering sectors, the power industry, transportation, ICT sectors and many others  A volunteer organisation, independent of the government, political parties, and trade unions  A respected social partner and a participant in the European social dialogue

predictable legislative framework

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.

INTERNATIONAL TRADE PROMOTION

Česká národní banka

WE REPRESENT  11 000+ companies – our members employ more

than 1.3 million people  3 1 industry federations and associations from key

areas of the Czech economy  O ver 140 significant individual member companies

OUR PRIORITIES  S upporting industry as the main pillar of the Czech

economy  S trengthening the significance of research, develop-

ment and innovation in industry  C ontinuing development in technical education and

expanding the technically skilled labour force  C reating a business-friendly environment for entre-

preneurs and international investors  A dvancing international trade and exports  Improving the transport infrastructure  F urthering the digitalisation of the economy and

e-Government  W  riting and agreeing on a stable, enforceable and

 W  e organise international conferences attended by

heads of states and governments W  e organise international business and trade missions  W  e cooperate with partner confederations and business chambers worldwide

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CZECH NATIONAL BANK

Na Příkopě 28, 115 03 Praha 1 Phone: +420 224 411 111 www.cnb.cz/en/public/contacts.html More information at: www.cnb.cz

D o i n g B u s i n e s s i n t h e C ze c h R e pu bl ic VI. Useful Addresses and Information

CENTRE FOR REGIONAL DEVELOPMENT OF THE CZECH REPUBLIC  ENTERPRISE EUROPE NETWORK Centre for Regional Development of the Czech Republic (the Centre) was founded by the Ministry for Regional Development of the Czech Republic and is the implementing agency for European funding programmes. The Centre hosts one of the offices of the Enterprise Europe Network (EEN), the largest international network (with more than 600 partners worldwide) set up and run by the European Commission with the purpose of supporting businesses. Its consortium based in the Czech Republic (CR) consists of six partners from four cities – Praha, Brno, Plzeň, and Ostrava. The mission of the EEN is to help especially small and medium-sized enterprises (SME) with entering the EU and foreign markets and doing business there. Its experts provide comprehensive advisory 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 become integrated more widely in the EU framework programmes. To foreign clients the Centre – EEN Praha office offers: information about the CR, 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 – Enterprise Europe Network U Nákladového nádraží 3144/4, 130 00 Praha 3 Phone: +420 225 855 312 E-mail: een@crr.cz More information on the Centre for Regional Development of the Czech Republic at: www.crr.cz More information on the Enterprise Europe Network in the Czech Republic at: www.een.cz

CZECH CENTRES WHO WE ARE AND OUR AMBITIONS The Czech Centres is an agency established for the promotion of the Czech Republic internationally and managed by the Ministry of Foreign Aﬀairs of the Czech Republic. Our organisation provides a global network throughout three continents and 22 cities and we are active members of EUNIC, the European Union National Institutes for Culture. Our primary aim is the development of enduring international cultural and economic links between the Czech Republic and other nations. We create and support partnerships for Czech industries and culture on a local and global level through both public and private bodies.

OUR WORK, YOUR OPPORTUNITIES We accomplish these aims by fostering cooperation between foreign cultural institutions, experts and individual artists with Czech entities through highly successful international events, projects, and schemes. These are successful because of our connections to the best Czech institutions of education, science, and culture and by providing access to research and innovation and identifying and exporting the most dynamic driving forces of science and creativity of the Czech Republic. We support the development of institutions, such as universities, start-ups and professional bodies, through mutual international cooperation to promote their success and in doing so, provide unique opportunities to anyone interested in working with and investing in the Czech Republic. In addition, our organisation provides practical skills and knowledge. We are renowned and trusted in our support for those teaching and using the Czech language, enrolling over 2 500 students in Czech language courses worldwide in last year. The Centres present the Czech Republic in cooperation with regional partners abroad. Having many professional partners, we act as a focal contact point for information sought by general public, media and others.

WHERE WE ARE Locations of our global network: Berlin - Bratislava - Brussels - Budapest - Bucharest - The Hague - Kiev - London - Madrid - Milan - Munich - Moscow - New York - Paris - Sofia - Seoul - Stockholm - Tel Aviv - Tokyo - Warsaw - Vienna.

Česká centra Václavské nám. 816/49, 110 00 Praha 1 Phone: +420 234 668 211 E-mail: info@czech.cz More at: www.czechcentres.cz

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CZECH CHAMBER OF COMMERCE CONFEDERATION OF EMPLOYERS’ AND ENTREPRENEURS’ ASSOCIATIONS WHO WE ARE Independent public institution of entrepreneurial OF THE CZECH REPUBLIC self-governance

 

 L argest and most representative business association

in the Czech Republic including small, medium, and large companies, self-employed entrepreneurs, associations, unions, and craftsmen organisations  N etwork – regional (regional and district chambers) and professional (unions, associations, etc.) P latform for 15 thousand members representing more than 60 % of GDP of the country and 66 % of employable population in the Czech Republic in non-compulsory membership scheme  M  ember of European and international organisations

WHAT WE DO  S upport 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

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.  i t unites eight representatives of employer unions in the fields of construction industry, textile industry, small and medium-sized businesses, production and consumer cooperatives, agriculture, mining and oil industry, wood processing industry, education, health care, culture, and social services;  i t represents 22 000 bodies with over 1 300 000 employees;  i t supports the promotion of specific interests of its members in the legislative field and in other areas;  i t 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;  i t is one of the social partners representing the side of entrepreneurs in the Council of Economic and Social Agreement (Tripartite).

 Involvement in various European Commission’s

programmes  Support to foreign companies in finding suitable

business partners in the Czech Republic  Publishing foreign demands, oﬀers or tenders on

Chamber website  Czech Business Representation in Brussels (CEBRE)  C onsultancy & advisory services (subsidies, projects,

export & foreign trade, legal issues, etc.)  C ZECHPoints (registers, documents, certificates, servic-

es, etc.) over 50 one-stop-shops throughout the country  P rofessional Education – national certification pro-

KZPS ČR’s members:  Association of Textile, Leather, and Clothing Industry  Union of Czech and Moravian Producer Cooperatives  S yndicate of Businesspeople and Tradespeople of the Czech Republic  A ssociation of Entrepreneurs in Building Industries in the Czech Republic  U nion of Employers’ Associations of the Czech Republic  Employers’ Association of Mining and Oil Industry  Agricultural Association of the Czech Republic  Union of Czech and Moravian Consumer Co-operatives

grammes (recognised occupation), skill competitions,  T hematic courses & seminars, etc.  O bligatory commenting point for new business legislation  L obbying at local, national, European & international

level  I ssuing own monthly KOMORA.cz magazine and

Konfederace zaměstnavatelských a podnikatelských svazů ČR Václavské náměstí 21, 110 00 Praha 1 Phone: +420 222 324 985 Fax: +420 224 109 374 E-mail: kzps@kzps.cz

weekly electronic news distributed directly to members

Hospodářská komora České republiky Na Florenci 2116/15, 110 00 Praha 1 Phone: +420 266 721 300 E-mail: foreigndpt@komora.cz More information at: www.komora.cz

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More information at: www.kzps.cz (in Czech)

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Czech Business and Trade

PROFESSIONAL ECONOMIC MAGAZINE WITH A LONGER THAN 90-YEAR TRADITION, WHICH INFORMS ABOUT THE STANDARD AND PROSPECTS OF THE CZECH ECONOMY IT IS DESIGNED FOR FOREIGN PERSONS INTERESTED IN BUSINESS IN THE CZECH REPUBLIC CONTENTS: topical information about the business environment, the industrial sectors and the different regions, and presentation of prominent Czech firms with good prospects

PRICE: Europe by air mail: Overseas by air mail: Czech Republic:

EUR 68/year EUR 75/year CZK 1 000/year

ORDERS AT: www.ppagency.cz/sbs.html

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 Parliament 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

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 Organisation 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

D o i n g B u s i n e s s i n t h e C ze c h R e pu bl ic VI. 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

ARES

wwwinfo.mfcr.cz/ares/ares.html

Access to Registers of Economic Subjects/Entities

Business Register

www.justice.cz/xqw/xervlet/insl/ index

Public directory

Business Register

www.rzp.cz

Trade Licensing Register

European Databank

www.edb.cz

Telephone and companies directory

Czech exporting companies

http://exporters.czechtrade.cz/en

Czech Exporters Directory

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

Company Contact Information

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

www.cs.mfcr.cz/spd_internet/

Directory of taxpayers registered under individual tax identiﬁcation numbers (DIČ)

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 Organisers of the CR

www.czechfairs.cz

Exhibition centres and companies organising trade fairs in the CR and abroad

Statistics Czech Statistical Oﬃce

Fairs and Exhibitions

Miscellaneous The Industrial Property Oﬃce

www.upv.cz

Patents, trade marks, utility models, and industrial designs

The Czech Science Foundation

www.gacr.cz

Awards grants to the best projects of basic research in all branches of science

The Register of Advertising Agencies

www.registrra.cz/rra

Expert assistance in choosing and working with advertising and communication agencies in the CR

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

CzechInvest

www.czechinvest.org

Business and Investment Development Agency

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 Adekor s.r.o.

AMEST s.r.o.

AŽD Praha s.r.o.

BAEST Machinery Holding, a.s.

BMT Medical Technology s.r.o.

Bydžov s.r.o.

Česká exportní banka, a.s.

Doosan Škoda Power s.r.o.

ETD TRANSFORMÁTORY a.s.

EXOT HOBBY s.r.o.

FANS, a.s.

FENIX Trading, s. r. o. GLENTOR s.r.o.

Jihostroj a.s.

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KLIMA a.s.

KOVONA SYSTEM, a.s.

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KOVOSREAL s.r.o.

M & V, spol. s r.o., divize STIMZET

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Merry Crystals s.r.o.

NEWTE spol. s r. o.

ORNEX, spol. s r.o.

SIGMA GROUP a.s.

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SKLÁRNY MORAVIA a.s.

Skleněná bižuterie, a.s.

Státní léčebné lázně Janské Lázně, státní podnik

Templářské sklepy Čejkovice, vinařské družstvo

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TOS VARNSDORF a.s.

ZIMATECHNIK s.r.o.

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ŽIVÝ KRAJ - DESTINAČNÍ AGENTURA PRO KARLOVARSKÝ KRAJ, Z.S. Photo: CzechTourism archives

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Doing Business in the Czech Republic 2018

Articles inside

ADEKOR - Tradition of Porcelain Making

AMEST - Measuring and Control Technology

ETD TRANSFORMATORY - Standard and Special Power Transformers

S.A.K. - Aquarium Fish Food

ZIMATECHNIK - Railway Technology

SIGMA - Traditional Producer of Pumps

KOVONA SYSTEM - Customized Mass Series Metal Manufacturing