Increased support for new investors

19. 8. 2021

The planned increased subsidy support from the state should help the arrival of new strategic investors to the Czech Republic. It promises to reimburse new large companies up to a fifth of all costs. So far, the highest possible subsidy relief is 10%.  Today, in order to receive a direct subsidy in addition to tax rebates and other incentives, a company must commit to employing at least 500 people and spending at least half a billion crowns here. This should no longer be the case from next year, when it will be sufficient for strategic investors to create only 250 jobs, while the minimum investment will rise to two billion. 

"The coronavirus crisis has brought a certain weakening of the economy and it is therefore a good time to re-evaluate how, and above all what type of investment to motivate Czech and foreign investors. In the future, it will be necessary to have investments here that will be able to cope with price rises and can also be a good source of tax revenue," the Ministry of Industry explains in its explanatory memorandum. Last Friday, they sent the draft to other ministries and business representatives for comments. As this is not a change in the law, but only a government regulation, it is sufficient for the ministers to approve the news. The new rules should come into force from January next year.

It will also increase the range of companies that can receive the subsidy without meeting all the requirements. In addition to large investors, smaller technology companies will also get direct state support. These will include companies involved in research or development of artificial intelligence, 3D printing, autonomous vehicles or nanomaterials. Today, only manufacturers of medical devices have this exemption. There is no change for innovative companies in other sectors. They can still apply for incentives, but instead of a subsidy, they will receive indirect support from the state, most often a tax rebate. 
The conditions for investment conditions were changed two years ago, when the state wanted to encourage the entry of companies with higher added value. For example, it chose wage levels, the number of employees with university degrees or the presence of research as determining criteria. The newly chosen parameters were reflected the following year, when the number of companies applying for support dropped fivefold. The onset of coronacrisis also played a negative role.