A great place for your investment

The Czech Republic has continued to hold a prominent place in several previous year's country rankings. Even though the ongoing war in Ukraine has dimmed the prospects of a post-pandemic economic recovery, the Czech Republic remains a great location for foreign direct investment. A medium-sized, open economy, safe and peaceful environment, and political stability, together with an educated and skilled workforce are just some of the aspects that make the Czech Republic a valuable location for investment.

Strategic location 

Due to its strategic location, stable economy and human-capital resources, the Czech Republic is an attractive destination for foreign investors planning to enter the European market or expand their businesses to more countries in the region. The country’s convenient location in the middle of Europe makes it possible to reach all European capitals very easily. The country’s EU membership makes it an ideal gateway to the single European market of over 500 million consumers and 21 million SMEs. Given the fact that the Czech Republic is at the crossroads of European trade, advanced transport infrastructure was naturally developed here. The Czech Republic is ranked among the world’s most advanced countries in terms of transport network density and several projects involving modernisation and extension of the network are currently underway.

Stable and transparent business environment

A stable political situation, a well-developed private sector, an effective legal environment, and a healthy banking system with a strong and independent central bank are the key features of a society in which business can be conducted effectively and safely. The Czech Republic’s open investment climate was a key element in the country’s transition, which is reflected in its investment rating from international credit-rating agencies, putting it on an equal footing with Japan and Taiwan and opening the door to early membership in the OECD. The Czech Republic is a fully fledged parliamentary democracy and one of the most advanced new members of the European Union, which it joined in 2004. Its currency, the Czech crown (CZK), is fully convertible and extremely stable. Under Czech law, foreign and domestic entities are treated identically in all areas, from the protection of property rights to investment incentives. The tax system offers the lowest rates in Europe and has remained stable over the long term.

Investment protection

The Czech Republic is a member of the Multilateral Investment Guarantee Agency (MIGA), an international organisation for the protection of investments, which is part of the World Bank-IMF group. The country has signed several bilateral treaties that support and protect foreign investments, for example with the United States, Germany, Canada, France, Austria, Switzerland, Italy, Belgium, Luxembourg, the Netherlands, Finland, Norway, Denmark, Japan and China. The Czech Republic has also concluded agreements for the avoidance of double taxation.

Educated and skilled workforce

The Czech Republic combines an outstanding level of general education with a strong tradition and experience in science and engineering disciplines. It is not an optimal country for labour-intensive investment projects. In recent years, the Czech Republic has had one of the lowest unemployment rates in Europe. The country’s low employment rate has persisted even during unstable times caused by the global COVID-19 panemic and the war in Ukraine. On the other hand, the availability of graduates educated in technical fields at a lower labour cost compared to that found in western countries makes the Czech Republic especially advantageous for advanced and progressive manufacturing and R&D-oriented companies, whose operations are usually not labour-intensive.

The Czech Republic is a country with great talent potential, as it is ranked 23rd overall among the 134 economies in the special tenth anniversary edition of the Global Talent Competitiveness Index from 2023. In the academic year 2022/2023, over 300,000 students were enrolled in the country’s 60 universities (Ministry of Education, Youth and Sport, 2023). Roughly half of Czech university students study STEM, while more than 80,000 students are enrolled in technical programmes. Because the Czech Republic is a relatively small country, studying foreign languages is a necessity. According to the latest STEM survey, more than 70% of Czechs know at least one foreign language (predominantly English or German); this figure rises above 90% for those in management positions. The Czech Republic has strong technological potential thanks to its pool of well-educated science workers and its skilled workforce, which have given rise to several rapidly growing industries such as biotechnology and software development. Using financial resources obtained from the EU structural funds, new research centres are being established with the objective of becoming prestigious European science centres with state-of-the-art infrastructure and conditions making it possible to employ the best researchers. Czech employees are very loyal, hardworking and precise. The local workforce is considered to be very reliable and stable.

Well-developed infrastructure

Besides the country’s transport infrastructure, its energy distribution and telecommunications networks also contribute to the creation of an ideal environment for doing business. However, Russia’s ongoing aggression against Ukraine has had a significant impact on commodity markets and the energy supply chain. The war has also highlighted the importance of energy security and the reduction of dependence on the importation of key energy raw materials from Russia. As a result, the Czech Republic has been facing a significant increase in energy prices. The exception is the price of natural gas, whose prices have been declining since Q3 2022.

The Czech telecommunications market is one of the most developed and most liberalised in Central and Eastern Europe and is distinguished by the growing demand for data, internet access and other communication services. The country’s advanced fibre-optic network is part of the European backbone and is being further developed. No exclusive rights exist in the area of electronic communications and the competition environment is sufficiently robust in the context of the European Union. In terms of the business-property market, the country is quite advanced with respect to the number of industrial zones and parks as well as office premises.

Quality of life

The country’s urban centres and beautiful countryside offer countless possibilities for leisure activities for both tourists and locals throughout the year. Municipal public transport systems are well managed and efficient, while trains provide a popular and easy way to travel around the country. The Czech Republic is an expat-friendly country with plenty of organisations helping foreigners with everyday issues and organising networking events. Furthermore, in larger cities, it is easy to find international schools for children at all grade levels. The country is close to Western Europe not only geographically, but also in terms of social and cultural values. Together with its sustainable business environment and its ability to harness the potential to respond to the needs of the global economy, the Czech Republic’s high quality of life is yet another factor making it an ideal investment location. 

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Adam Wrobel
Project Manager