Investment incentives and public support for entrepreneurship

Czechia has a number of attributes that make it attractive to foreign corporate investors both in terms of investment support through investment incentives from the state and financial support from EU funds for investors. However, there are also other interesting sources of investment support that investors can take advantage of.

Czechia will receive approximately €40 billion from the EU over the period 2021-2030, which can also be used for two investments by new inward investors. The areas where the EU support will be directed are mainly energy savings, digitalisation and R&D support. Among the most interesting opportunities for investors, the Ministry of Industry and Trade, which manages the business support programmes in Czechia, offers the following programmes:

Energy Saving and Renewable Energy supports measures leading to a reduction in energy intensity of enterprises, such as modernisation of production technologies, insulation of buildings, installation of energy-saving equipment and installation of new sources of renewable energy.

Digital Enterprise provides financial support to upgrade logistics and warehouse technologies, strengthen cybersecurity, IT training and certification, and improve the interconnection of internal systems and facilities

Innovation is a programme that supports the translation of research and development results into practice. It provides financial support for costs associated with the implementation of innovations (e.g. product, process, etc.), in particular for the purchase of new technologies.

Applications and Potential are quite crucial to support R&D in companies-it supports projects aimed at developing new products, technologies and services, both for the costs of researchers' salaries, purchase of materials and equipment, services of consultants and experts, but also for equipping companies to carry out R&D activities.

But there are also other programmes available to companies that make significant inroads into the use of waste or the more efficient use of water resources within the business:

Sustainable Water Management, which targets projects that enable, for example, better use of polluted water, reducing water consumption in the company's production process, but also the Circular Economy programme, which is essential for the recovery of production waste, recycling waste and using secondary raw materials back in production.

The Modernisation Fund is designed to support investment in modernising energy systems and improving energy efficiency. The Fund aims to support the transition to a low-carbon economy and reduce greenhouse gas emissions. The fund is only for the 10 EU countries with the lowest income. For Czechia, at least EUR 6 billion is available until 2030.

The most interesting support programmes from the Modernisation Fund for investors include:

RES+ - Support for new renewable energy projects such as photovoltaic power plants, wind power plants and small hydro power plants.

HEAT - Modernisation of thermal energy supply systems, including the use of renewable energy sources, waste heat, as well as hydrogen applications

ENERG ETS - Support for measures to increase energy efficiency and reduce greenhouse gas production in industry, business for companies operating installations under the EU ETS.

Investment incentives, as a key instrument for promoting economic growth, offer support in several key areas. The basic conditions for the use of the investment incentive depend on the region in which the investment is made and on the size of the enterprise according to the EU definition of enterprise size. For example, in the manufacturing sector, for a large enterprise (over 250 employees in the whole group), this means investment in assets of at least EUR 1.5 million/3 million, depending on the region, of which at least half in new machinery. The form of support (generally speaking it is 20 - 60 % of the investment) can then take several forms:

• Income tax relief for 10 years
• Cash grant for the acquisition of fixed assets for strategic investment actions
• Cash grant for the creation of new jobs (EUR 7 800 per employee)
• And others as for strategic investment actions, Material support for retraining or training of employees and Exemption from property tax.

The most interesting support is offered if investor make an investment in a strategic investment action in a manufacturing industry with high technological intensity, or in the field of health protection, chip production or production related to energy saving.