CzechInvest in London attracts British and Irish capital to the Czech Republic

The Czech Republic has attracted record volumes of foreign direct investment over the past few years. One of the reasons why the Czech Republic has been so successful in attracting foreign investors is the generous investment incentives and an all-inclusive assistance the Czech government provides to investors through its agency CzechInvest whose nine offices are scattered around the world. Ian Willoughby recently spoke to CzechInvest's director of operations in the UK and Ireland, Rene Samek, at his office on London's busy Harley St. Mr Samek started by outlining CzechInvest's raison d'etre.

"We are helping investors choose the Czech Republic as the location for their investment because every company is looking at several options when they are thinking where to build their new plant or where to build their new software development centre etc. They will look at several countries - they may look at say Ireland, Portugal, the Czech Republic, Poland and Hungary - five countries, five potential locations. We try to make sure that the Czech Republic makes it to the top."

What are your selling points?

"Well, the Czech Republic has a very good location on the centre of the European continent, so it is a very good location for companies that want to export products or services to Germany and other neighbouring countries. We also have skilled and educated people, and especially here in the UK, but also in other countries, technical talent, technically skilled people are a scarce resource. Companies are therefore increasingly looking at countries such as the Czech Republic for people, where labour is available at a good grade and where people have good technical skills in general."

Does the Czech Republic offer tax incentives to potential investors?

"Yes, we do, since 1997. We were one of the last countries to introduce investment incentives. When we introduced them five years ago, they became a huge hit and since then, over a hundred companies received investment incentives, most of them foreign companies but there are some Czech companies which also received incentives because the scheme is open to both groups."

I know Foreign Direct Investment to the Czech Republic has increased a lot in recent years, has much of that investment come from the UK and Ireland?

"Yes. There is a lot of interest here in London as well as in Ireland in investing in the Czech Republic. Not all of these companies will necessarily be British or Irish, especially London and to some extend Ireland as well are European bases of multinational companies - US companies, Japanese, Korean, etc. I would say nearly 50 percent of inquiries that I get are of British- or Irish-based subsidiaries of multinational companies. But there is a lot of interest among indigenous British and Irish companies."

Is there any particular type of business which is interested in the Czech Republic?

"Mainly the producers of electronic products, final goods or components, automotive components and the automotive sector in general, engineering products, software development, in recent months shared services and call centres - we have many inquiries from these two sectors, some interest in research and development."

When you say call centres, do you mean that there are Czech people answering phones in the Czech Republic for companies here?

"Yes. Most of these companies are looking at pan-European call centres which will be answering not just in English but in many languages. Obviously, this is one of the main advantages of the Czech Republic, because while in Ireland, obviously everybody speaks English but there are also people who speak French and German, the Czech republic can offer people who can speak English, German, French but also Spanish, Scandinavian languages, East European languages and so on. So, pan-European call centres, that is the business where I think we are very competitive in."

I must say this is something new to me. Are there many such companies in the Czech Republic?

"Not yet. It is new to us as well but this is a growing trend and the Czech Republic is an emerging location. As countries such as the Czech Republic, Poland and others will join the European Union in 2004, it is generally expected that purchasing power will go up and there will be higher sales of products and services in these countries and therefore there will be more demand for call centre services and share services covering not just the UK, Germany, France and other traditional countries, but also the new countries."

The Czech Republic is known for its bureaucracy, and red tape. Is it off-putting for British companies?

"Well, it is pretty difficult to build a new plant here as well. It is not that it would be a lot easier than in the Czech Republic. There are some areas where bureaucracy and other problems become a well-known fact but you can get around it of you have all the paper work done properly. I have not met a case yet when a company would pull out of the Czech Republic because of problems with Czech bureaucracy or corruption or similar problems."

Are there many Czech companies who have offices here?

"Not too many but the numbers are growing. There is a company which makes furniture and they have been very successful, supplying even some governmental buildings in London and hotels etc. There is a company which makes satellite dish components and has an office here. All the drinks distributors, Pilsner Urquell, Budweiser Budvar and others, they have sales offices in the UK. So, my estimate is there are between 25 and 50 here at the moment and the numbers are growing."