CzechInvest says foreign investments down by 3.8% in 2010.

By bne IntelliNews March 9, 2011
State investment promotion agency CzechInvest said the value of negotiated foreign direct investments fell by 3.8% y/y to CZK 16.3bn (EUR 642.6mn) in 2010. The number of projects increased by 12.4% y/y to 209. The decrease in the value of negotiated projects mainly reflected the suppressed investors' expectations about future developments and the persisting uncertainty following the crisis, as well as their deteriorated financial capacity. The largest number of projects 105, was in the services sector, mainly ICT and software development, while in terms of value, the bulk of projects at the total value of CZK 13.8bn, were in the production sector. The value of the projects in research and development reached CZK 1.8bn and they have created 929 jobs. Local firms participated in 174 projects and invested CZK 6.7bn. Germany was the largest foreign investor with 8 projects, followed by the USA and the United Kingdom each with 4 projects. In terms of value, Austria topped investing CZK 1.9bn in two projects. The newly negotiated investments are to create employment for 9,423 people, which is 63.3% more than the number of new jobs created in full-2009. CzechInvest CEO Miroslav Krizek expects the observed in 2010 trend to continue also in 2011 and the bulk of investments to be directed to technology-intensive projects in IT and software development and business support services. Since 1993 CzechInvest has mediated 1,565 investment projects worth CZK 681.5bn, which have created 215,763 jobs. Industry minister Martin Kocourek underlined that the government is to continue its efforts of keeping the Czech Republic attractive for foreign investments, mainly in high value-added sectors like R&D and ICT, as well as in sectors requiring more advanced technologies and knowledge, by improving the business environment and reducing administrative burdens in particular. Minister Kocourek highlighted that projects focused on R&D and strategic business services could also possibly receive investment incentives in the future as envisaged in the amended law on investment incentives the ministry is preparing. Currently only projects in the production sphere can get investment incentives in the form of tax rebates. The ministry is also to raise the state support for the creation of new jobs to some CZK 200,000 from the current CZK 50,000.
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