Since the fall of the communist government well over 20 years ago, the Czech Republic has become a well-established parliamentary democracy with a free-market economy and is arguably one of the most advanced new EU members. Its economic policy is consistent and predictable. A key factor which made possible a rapid transition to a market-based free economy is an open investment climate. The result has been that the Czech Republic has attracted a large amount of US and other foreign direct investment since 1990, making it the most successful transition country in terms of foreign direct investment per capita. The Czech energy sector is an area that showed early progress where U.S. companies undertook projects. For example, Westinghouse played a key role in adapting the soviet-designed nuclear reactor Temelín to utilize western control and nuclear fuel technology. The country’s investment grade ratings from international credit-rating agencies and its early membership in the OECD testify to its positive economic fundamentals.
Among the key advantages for companies considering investment in Central Europe are:
The Czech educational system meets the needs of a competitive economy, according to the 2011 World Competitiveness Book published by the Institute for Management Development. The Czech Republic can provide manufacturers with impressive productivity levels and highly skilled labor. According to a 2011 OECD study, the Czech Republic has a very strong position regarding the percentage of students graduating in engineering, manufacturing and construction ﬁelds. In the year 2010/2011, there were more than 80,000 technically orientated students at Czech universities. The number of university students increased from 118,000 in 1990/91 to 396,307 in 2010/2011, due to not only changes in the education system but also to a demographic bulge of 18-26-yearolds that represent a promising group of potential employees for foreign investors. Nine out of ten Czechs aged 18 to 59 speak at least one foreign language, and their knowledge is rapidly improving, according to a survey conducted by AUGUR Consulting for CzechInvest in 2008-2009. The survey shows a 13% increase in language skills in comparison with the results of similar research conducted six years ago.
The Czech Republic spends more resources on research and development than many of its competitor countries. Over the past ten years, the Czech Republic’s spending on R&D has increased from 0.95% of GDP to 1.61%. Many multinationals are running Czech R&D or design centers, including Panasonic, Honeywell, Mercedes-Benz, Motorola, Rockwell Automation and Visteon. Czech scientists are behind some of the world’s well-known discoveries and patents, such as soft contact lenses, polarography – a Nobel-prizewinning method of quantitative analytical measurement, and several important anti-HIV drugs, to name but a few.
One of the main attractions of the Czech economy is its skilled and well-educated workforce available at a fraction of the cost of those in western economies. Between 2004 and 2008, average annual wage has grown around 6% but it was coming from much lower base compared to Western Europe. Thereafter, slowdown in average nominal wage growth to about 2-3% was registered in the years 2009 and 2010, which was mainly affected by the ﬁnancial crisis. Differences in remunerations among regions reach approx. 20%. Traditionally, employees in Prague are paid more than in other regions (currently 25% above Czech average).
The Czech Republic has a strategic location in the center of Europe with good access to established western as well as emerging eastern markets. Prague is less than a two-hour ﬂight from most other European capitals. The Czech Republic has grown as a transit hub since the Czech Republic became a member of the EU Single Market. The road and motorway network is already one of the densest in Central and Eastern Europe and several rail modernization projects are currently underway to link the Czech Republic with the pan-European network of high-speed railways.
Since the 1989 Velvet Revolution the Czech Republic has become a highly popular destination. Tens of thousands of foreigners have settled here, enjoying the country’s combination of high standard of living and low costs. Although in most respects life in the Czech Republic has rapidly approached Western standards of living, the cost of living remains substantially below than in Western Europe. Prague and many cities in the Czech Republic are famous for their architectural heritage, their museums, theatres, cinemas, galleries, historic gardens and cafes. An overwhelming choice of cultural events is on offer, embracing all types of music and an outstanding theatrical tradition. A number of foreign culture centers also offer a wide range of events and services.
From: Investment Climate in the Czech Republic, CzechInvest, Czech Ministry of Industry and Trade, http://www.czechinvest.org/data/files/investment-climate-en-53-en.pdf, and
Ministry of Industryu and Trade http://www.businessinfo.cz/en/about-the-czech-republic/basic-data/fact-sheets.html
As to the US bussiness in the Czech Republic please visit the following internet sites: