Boost to Czech investment environment – an amendment to Act on Investment Incentives comes into force at the beginning of May 2015

April 2015 – The Czech government is poised to offer higher support for investment projects. The Czech Republic has passed a law on investment incentives that sets out more attractive conditions for both Czech and international investors in the Czech Republic.

Investors will be able to benefit, inter alia, from the following changes:

  1. The Government has introduced “favoured industrial zones” where investment incentives in the form of an exemption from real estate tax may apply for up to five years
  2. The limit on financial support for the acquisition of long-term assets (known as “cash grant”) provided for strategic investment projects (i.e. in the areas of production and technology centres) has been increased up to 12.5 per cent of eligible costs.
  3. Investors may be provided with higher financial support for the creation of new jobs in “favoured industrial zones” and areas where the local unemployment rate exceeds 25% of the average unemployment.

Investors may still draw on other investment incentives that currently apply, such as reduced levels of income tax, transfers of plots of land (including infrastructure) at a discounted price and financial support for the training and retraining of employees.

The main aim of the amendment is to ensure that the Czech Republic will remain an attractive country to invest in and to increase its competitiveness for foreign investments in the area of manufacturing industry, projects involving innovative technologies, and other areas.

A significant part of Kinstellar practice involves advising foreign and multinational corporations on foreign direct investment projects. We have advised on hundreds of foreign direct investment transactions, including joint ventures and start-up “greenfield” inward investment operations, public takeovers, privatisations and the acquisition of strategic interests.

The past few years have seen some landmark FDI projects in the Czech Republic, and Kinstellar has successfully advised on the three largest of them – for South Korea’s Hyundai Mobis, Hyundai Motor Company and Nexen Tire Corporation.

For more information, please contact Kamil Blažek, Partner, at +420 221 622 160, or