The Czech Republic Business Partner in the EU

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The Czech Republic Business Partner in the EU
Milan Vágner Head of Commercial Section Embassy
of the Czech Republic Kuala Lumpur, October 25,
2007
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Key Information
The Czech Republic is situated in Central Europe
Area 78 864 square km Population 10.3
million Capital Praha (Prague)
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EU Enlargement
EUROPE
EU 15
10 after 1.5.2004
2 after 1.1.2007 Turkey-candidate Non-memb
ers
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Czech Republic European Union member since 1
May 2004
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Czech Republic EU Accession

• As from 1st May, 2004
• Main effect LARGEST FREE TRADE ZONE IN THE
  WORLD
• 485 mil population (incl. Bulgaria and Romania)
• 27 of the worlds GDP
• 19 of the worlds trade in goods, 25 of trade
  in services
• Source of 46 of the worlds FDI and host to 21
• Free movement of GOODS, SERVICES, CAPITAL,
  PERSONS (Labour, Right of Settlement)

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Country Ratings March 2007
Source CreditSuisse
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Basic Macroeconomic Indicators
Source Czech Statistics Office


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Lates Economic Data

• Indicator period y-y in
• GDP 2nd quarter 2007 6,0
• Inflation rate August 2007 2,0
• Industrial output July 2007 11,5
• Imports July 2007 18,7
• Exports July 2007 20,7
• Unemployment rate July 2007 6,4
• of total labour force

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New tax reform

• The most important changes for business community
  are concerning the corporate tax rate.
• The rate will be reduced from 24 in 2007 to 19
  in 2010.

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International Comparison 2006 , USD
GDP(p.c.) Export(p.c.) European
Union (25) 29,300 9,200 Czech
Republic 22,000 9,200 Czech Republic export
performance per capita (USD) (2002) 3,704
(2004) 6,495 (2005) 7,647 (2006 est.)
9,200 Source Ministry of
Industry and Trade
CIA The World Factbook
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The Czech Republic Partner for Business in the
EU

• Czech Republic situated in the centre of Europe
• Springboard to new EU markets, Eastern Europe
• Internal EU market no internal borders
• one set of customs rules (same for all EU 25)
• Very Good Infrastructure incl. RD institutions
• High standard of rules
• Very open economy
• liberal rules
• easy investment

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Czech Foreign Trade 2006 (USD mil.)
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Czech Exports Principal Areas
Source Czech Statistical Office, Ministry of
Industry and Trade
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Bilateral Trade with Malaysia(1)
Legal framework for cooperation - Agreement on
Aerial Transport (1973) - Agreement on Mutual
Abolishing of Visa Duty (1991) - Agreement on
Protection and Support of Investments
(1996) - Agreement on Avoidance of Double
Taxation (1998)
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Bilateral Trade with Malaysia(2)1993 2006
(thous. USD)
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Bilateral Trade with Malaysia(3)
Value of bilateral foreign trade (mil. USD)
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Bilateral Trade with Malaysia(4)Commodity
Structure

• Exports from the Czech Republic
• 56.1 mil USD in 2006
• electrical machinery and equipment (11),
• furniture and parts (11), paper and
  paperboard
• (10), power-generating machinery and
• equipment (10), manufactured goods,
  chemicals
• Imports to the Czech Republic
• 638.7mil USD in 2006
• electrical machinery and appliances (43),
  office
• machines and parts (15), telecom.equipment
  (13), crude rubber (8), textile, plastic,
  furniture

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Czech Engineering
Traditional products
Power generation equipment
Trains
Aircraft
Cement Plants
Automobiles
Trucks
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Czech Republic MalaysiaOpportunities for
Cooperation (1)

• Perspective areas
• Power Generation Equipment and Technologies
• (coal,co-generation, hydro, renewable resources,
  nuclear)
• Transport Equipment and Systems
• (construction and rehabilitation of railways,
  pipelines)
• Environment Protection Technologies, Equipment
• (water treatment, waste management)
• Biotechnologies and Nanotechnologies
• Mining Industry (new technologies, safety
  equipment)

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Czech Republic Malaysia Opportunities for
Cooperation (2)

• Chemical and Petrochemical Industry
• Aircraft and Automobile Industry (deliveries of
• micro-light aircraft, small passenger
  aircraft L-410,
• auto parts, etc.)
• Medical Equipment, Pharmaceuticals
• Cooperation in ICT
• Bohemia Crystal and glass products

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Czech Republic MalaysiaPartners on Third Markets

• Czech Exports
• Power generation (thermal and hydro)
• Environment protection technologies
• Transport systems and equipment
• Medical equipment, Biotechnology, etc.
• Czech Imports (incl. EU, Central and Eastern
  Europe)
• Electrical appliances and parts
• Telecommunication equipment
• Furniture, textile

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Foreign Direct Investment
Priority Sectors for the Year 2007 Traditional
sectors of Czech Industry with growth potential
Electronics Precision Engineering and
Automobile Industry Chemicals and Plastics
High-tech manufacturing Microelectronics and
Semiconductors Biotechnology and Pharmaceutics
Optoelectronics High-tech services
Information and Communication Technologies,
Software Development Strategic Services -
Shared Service Centres, Expert and Solution
Provider Centres High-Tech Repair Centres
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Foreign Direct Investment (2)
Investment Incentives Scheme

• Manufacturing investors meeting the criteria
  may currently apply for all or any of the
  following incentives
• Corporate income tax relief (full or partial) for
  a period of up to ten years,
• Training and retraining subsidies,
• Job creation grants,
• Transfer of state-owned land.

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Information Sources (1)

• Portal www.gate2biotech.com
• Czech Biotech Report 2007 www.gate2biotech.com/c
  zech-biotech-report-2/ - information about
  biotechnology sector in the Czech Republic and in
  the Central Europe. Visitors will find a complete
  database of Czech biotechnology companies,
  innovations in the field, demand and offer of
  cooperation or employment positions in the
  sector, an overview of projects currently under
  way etc.

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Information Sources (2)

• Embassy of the Czech Republic
• 32, Jalan Mesra, Off Jamal Damal
• Kuala Lumpur, 55000
• tel. [phone]
• Fax [phone]
• Mr. Milan Vagner
• Head of Commercial Section
• HP 012-3030170
• http//www.mzv.cz/kualalumpur
• e-mail milan_vagner_at_mzv.cz
• commerce_kualalumpur_at_mzv.cz

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Information Sources (3)

• CzechTrade Czech Trade Promotion Agency
• Dittrichova 21, 128 01 Praha 2
• P.O.Box 76, 128 01 Praha 2
• Czech Republic
• tel. [phone] fax [phone]
• http//www.czechtrade.cz e-mail
  info_at_czechtrade.cz
• CzechInvest Czech Investment and Business
• Development Agency
• Stepanska 15, Praha 2
• Czech Republic
• tel. [phone] fax [phone]
• http//www.czechinvest.org e-mail
  info_at_czechinvest.org

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Information Sources (4)

• Governmental Institutions and Agencies
• Ministry of Industry and Trade www.mpo.cz
• Ministry of Foreign Affaires www.mzv.cz
• Economic Chamber of CR www.komora.cz
• Confederation of Industry of CR www.spcr.cz
  (Members, Branch Associations)
• Official Website of Czech Republic www.czech.cz
• Economics and Statistics
• Czech National Bank www.cnb.cz
• Czech Statistical Office www.czso.cz
• Prague Stock Exchange www.pse.cz
• Czech Business Web www.businessinfo.cz
• www.doingbusiness.cz
• www.export.cz
• Database of Czech Products www.supplier.cz

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Hope to see you soon in the Czech Republic
the castle and the gardens of Kromeríž
Ceský Krumlov
Holašovice
Prague
Kutná Hora
Tugendhat villa in Brno
Zelená Hora Church of St. John Nepomuk
the Holy Trinity Column of Honour in Olomouc
Telc
Litomyšl
The Lednice-Valtice area
Trebíc
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Thank you for your attention
www.mzv.cz/kualalumpur