Foreign direct investment in the Czech Republic, developments and trends

The Czech Republic offers an excellent environment to support investments with higher value added, i.e. investments that are technologically oriented or related to research and development, sometimes also referred to as high-tech investments, in key sectors (aerospace, automotive industry, life sciences, nanotechnology, ICT, business services, electronics and advanced engineering). In 2019, two-thirds of arranged investments were expansions of the operations of companies already established in the Czech Republic.

The change in the structure of foreign direct investment in the past ten years indicates a new trend in the Czech Republic. The number of demanding projects in the fields of research and development and business support services is rapidly increasing the number activities (technology centres and business support services centres) coming to the Czech Republic.

Other trends in the area of investment include autonomous driving, electromobility, virtual and augmented reality, cybersecurity, artificial intelligence and advanced materials.

Selected key investors in the Czech Repblic by industrial sector
Sector Investor
(country/region of origin)
Sector Investor
(country/region of origin)
Aerospace

GE Aviation materials (US)

High-tech
mechanical
engineering
Bombardier (CA)
Honeywell Aerospace (US) Daikin (JP)
Latecoere (FR) Edwards (UK)
Bell Helicopters (US) Ingersoll Rand (US)
UGMK (RU) Siemens (DE)
Automotive Hyundai (KR) Information and
communication
technologies
Microsoft (US)
Nexen Tire (KR) Oracle (US)
Robert Bosch (DE) Red Hat (US)
Toyota/Groupe PSA (JP/FR) Solarwinds (US)
Volskwagen (DE) Tieto (FI)
Business
support
services
Accenture (US) Life sciences Lonza (CH)
DHL (DE) MSD (US)
IBM (US) Otsuka Pharmaceutical (JP)
Infosys (IN) Synthon (NL)
SAP (DE) Teva Pharmaceutical Industries (IL)
Electrical
engineering
and electronic
ABB (CH)

Nanotechnologies
and advanced
materials

AGC (JP)
ThermoFisher Scientific (US) Thermofisher Scientific (US)
Foxconn (TW) Fibertex Nonwovens (DK)
On Semiconductor (US) Saint-Gobain (FR)
Panasonic (JP) Toray Industries (JP)
Source: CzechInvest, 2021

Investment in individual years, 2010 - 2020
  Number
of projects
Investment
(EUR mil.)
Number
of jobs
2010 60 559 7,037
2011 72 1,262 10,702
2012 81 778 8,530
2013 108 1,832 10,412

2014

147 3,324 16,842
2015 106 1,719 14,040
2016 101 2,388 12,102
2017 106 2,408 12,116
2018 82 1,402 6,146
2019 94 2,090 6,948
2020 27 583 2,734
Total 984 18,345 107,609
Source: CzechInvest, 2021
 

Structural change of investments

1993 - 2000

Economic transition

  • Privatisation of large Czech companies
  • Incentives only for major foreign direct investments in manufacturing

2000 - 2012

Greenfield investment in manufacturing

  • Large foreign direct investment
  • Peak of newly created jobs
  • Establishment of supplier base for Western European markets

2012 - 2018

Diversification of supportes activities

  • Investment incentives for technology centres, high-tech repair centres, software development, data centres etc.
  • Technology interchange

2018 +

Innovation

  • Higher-value-added foreign direct investments
  • Encouragement of investment in KETs
  • Advancement of Czech suppliers into gloval value chains
  • Start-up accelerators and incubators

 

Top 6 investments, 1993 - 2020
Investor Sector Country 
of origin
Investment 
(EUR mil.)
Volskwagen Motor-vehicle
manufacturing

Germany

739
Nemak Motor-vehicle
manufacturing
Mexico 443
Denso Motor-vehicle
manufacturing
Japan 373
Toyota/PSA Motor-vehicle
manufacturing
Japan 915
Hyundai Motor Company Motor-vehicle
manufacturing
South Korea 1,341
Nexen Tire Corporation Rubber South Korea 887
Source: CzechInvest, 2021

Top 10 investment by country of origin, 2010 - 2020
Country
of origin
Number
of projects
Investment 
(EUR mil.)

Germany

179 3,647
Czech Republic 228 3,397
United States 118 1,771
South Korea 19 1,311
Netherlands 41 1,230
Austria 36 1,113
Japan 56 952
Switzerland 45 543
France 31 457
China 22 441
Total 775 14,862
Source: CzechInvest, 2021

Top 10 investment by sector, 2010 - 2020
 Sector Number
of projects
Investment
(EUR mil.)
Motor-vehicle manufacturing 243 5,536
Rubber and plastics 87 2,286
Metalworking and metal-processing 118 1,987
Paper and wood-processing 38 1,588
Mechanical engineering 
(machinery manufacturing)
98 1,233
Food 41 831
Electric devices (batteries,
generators, cables, appliances)
30 690
Other 49 675
IT and software development 71 206
Electronics (computers, 
optical instruments, electronics)
30 638
Total 805 15,670
Source: CzechInvest, 2021