Czech Republic provides for new investment incentives

Amendments to the Czech Investment Incentives Act that came into effect on 12 July 2012 create additional opportunities for investments in manufacturing and in technology centers and strategic service centers

Investors satisfying the conditions set out below are eligible for 10 years of corporate income tax relief of generally 40% of eligible investment costs.

Eligible investment costs are calculated as the fixed assets for production or as the payroll costs of the new jobs incurred with respect to the project during the 24-month period after filling the vacancy for technology centers and strategic service centers.

Basic investment requirements are as follows:
• Manufacturing – The minimum investment must be EUR 2 or 4 million (depending on the region), at least 50% of which must be invested in new machinery.
• Technology centers – The minimum investment must be EUR 400,000 and at least 40 new jobs must be created.
• Strategic service centers – There is no minimum investment requirement, but at least 100 new jobs (40 for software development) must be created.
• In general, whether in manufacturing or in a technology center, at least 50% of the minimum investment must be financed from the company’s own equity.