The Czech Republic as an attractive location for Shared Service Centers. Ondřej Votruba CEO of CzechInvest 16 th October 2014

Transcription

1 The Czech Republic as an attractive location for Shared Service Centers Ondřej Votruba CEO of CzechInvest 16 th October 2014

2 Content 1. Why is the Czech Republic and attractive location? 2. Statistics and Profile of Investment Projects 3. Financial Support of Shared Service Centers

3 Why is the Czech Republic an attractive location?

4 Main reasons for investing in the Czech Republic Safe investment environment and political stability. Well-educated workforce. Advanced ICT infrastructure. Investment Risk Rating COUNTRY STANDARD AND POOR S MOODY S FITCH Czech Republic AA- A1 A+ Slovakia A A2 A+ Poland A- A2 A- Russia BBB- Baa1 BBB Bulgaria BBB Baa2 BBB- Hungary BB Ba1 BB+ Romania BB+ Baa3 BBB- Source: CzechInvest and Czech National Bank, 2014

5 Main reasons for investing in the Czech Republic Price stability and favorable costs. Cultural proximity to western countries and the United States. Attractive environment for foreigners. Inflation Foreigners (% of workforce) CZ HU SK PL Source: Ministry of Finance. July Source: IMD World Competitiveness Yearbook, 2014

6 Reasons for investing in the Czech Republic from the investors perspective. We chose Prague thanks to the sufficient availability of workers with professional and language skills and thanks to the macroeconomic stability of the CR. Brno was chosen because it best fulfilled the selected criteria, including workforce availability, quality and cost of available office space, regional tax policy and political stability. Quality to cost criteria such as: country political stability, international accessibility, availability of skilled workforce with appropriate language skills, business and labor law environment, IT infrastructure as well as real estate development, were all thoroughly considered and evaluated. This decision has proved to be the right one. Source: CzechInvest, 2014

7 Statistics and Profile of Investment Projects

8

9 Statistics of completed investment projects (EU structural funds - ICT and Strategic Services program. period ) Nr. of call Year Application acceptance Nr. of completed projects Nr. of newly created jobs 1. Call months Call months Call months I. extension months II. extension month TOTAL Source: CzechInvest, 2014

10 Interest of investors in establishing center in the Czech Republic Investment Requests in Expected nr. of jobs Number of decided projects in Expected nr. of jobs 550 Investment Requests in Q1-Q Expected nr. of jobs Source: CzechInvest, 2014

11 Typical Project Profile of Investors Country of origin: USA, UK Considered locations within CR: Prague, Brno Focus of center: finance and accounting Type of center: In house Employee requirements: University graduates, knowledge of English in combination with other EU languages Competitive locations: Poland, Hungary, Ireland, South Africa Source: CzechInvest, 2014

12 Financial Support for Shared Service Centers

13 Operational Programme Entrepreneurship and Innovations for Competitiveness ( ) Total allocation: approximately 4.3 billions Territorial Dimension: whole Czech Republic except Prague Minimal changes compared to former programmes for ICT a Strategic Services. Possible change of eligible costs greater emphasis on operational costs (wages). New Aid Intensity: Source: CzechInvest 2014 Size of enterprise Small 45% Medium 35% Large 25%

14 Investment Incentives for SSC Based on Act No. 72/2000 on Investment Incentives, amendment shall be valid in 1Q Territorial Dimension: whole Czech Republic except Prague. Eligible criteria: cross-border activity, number of created jobs. Min. 100 new jobs (until the amendment) Min. 70 new jobs (after the amendment) Form of incentives*: corporate income tax relief * After the amendment in 1Q 2015 Ostrava-city may become eligible to receive job creation and training grants. Source: Investment Incentives Act No. 72/2000 Sb

15 Thank you for your attention.