MAJOR INVESTORS – TELECOMS

MAJOR INVESTORS – IT SERVICES

INVESTMENT INCENTIVES available IN THE CZECH REPUBLIC

INVESTMENT INCENTIVES AVAILABLE IN THE CZECH REPUBLIC 1. TAX INCENTIVE (New entities: corporate income tax relief for 10 years) (Expansion projects: partial corporate income tax relief for 5 years) 2. JOB CREATION GRANTS (up to $5,000 for every job created) 3. TRAINING AND RETRAINING GRANTS (up to 35 % of all training costs) 4. LOCATION INCENTIVE (provision of low-cost development land) ACT ON INVESTMENT INCENTIVES No. 453/2001 Coll. European Union regulations allow maximum public support at 50% of the investment

ELIGIBILITY CRITERIA 1. MANUFACTURING INDUSTRY (HIGH-TECH PRODUCTS OR MACHINERY) 2. ACQUISITION / CONSTRUCTION OF A NEW PLANT, EXPANSION OR MODERNISATION OF AN EXISTING PLANT 3. INVESTMENT OVER CZK 350 mil. (CZK 100 mil. IN REGIONS WITH HIGH UNEMPLOYMENT) WITHIN 3 YEARS 4. CZK 145 mil. (CZK 50 mil.) COVERED BY OWN EQUITY 5. AT LEAST 40% OF TOTAL INVESTMENT MUST BE MADE INTO MACHINERY 6. ENVIRONMENTALLY - FRIENDLY PRODUCTION European Union regulations allow maximum public support at 50% of the investment

SUPPORT TO BSS & TC Subsidy to business activity - during a period of max. 10 years - up to 50% of investment expenses Subsidy for training and retraining - during a period of max. 5 years Programs for support of BSS and TC include:

BUSINESS SUPPORT SERVICES (BSS) TARGET OF BSS: Services with high added value - Customer contact centers - Shared services centers - ITC expert solution centers - Software development centers - High-tech repair centers - Design centers Run by the Ministry of Industry and Trade (& CzechInvest)

TECHNOLOGY CENTRES (TC) TARGET: Creation and development of TC Innovation activities in sectors: - Aerospace - Computers and Machinery - Electronics and microelectronics - Telecommunications - Pharmaceuticals Run by the Ministry of Industry and Trade (& CzechInvest)

JOB CREATION / RE-TRAINING INCENTIVES BY REGIONS SM OV LN LB DC PH RA KD TP JC PV CV CL MB LT MO UL PR PE PU PJ NA ST ZR KO PM NB PI HB SU PB TU NJ OP SY RO AB BK BR UO KV JN VS JE CR BE RK DO KT KH PS ME OC TA PZ BN HK TC ZN JI BI CH SO BM TR JH PT CB BV CK KI KM UH FM VYZL HO Valid for the period: July 1, 2003 – December 31, 2003 GROUPJOB CREATIONRE-TRAINING A200,000 CZK35% B120,000 CZK30% C80,000 CZK25% D0 CZK0%

INCENTIVES AND BUSINESS SUPPORT NATIONAL INVESTMENT INCENTIVES MANUFACTURING FIRMS INVESTMENT OVER CZK 350 mil OR OVER CZK 100 mil IN SOME REGIONS LOCAL INCENTIVES ALL FIRMS ANY AMOUNT OF INVESTMENT JOB CREATION / TRAINING AND RETRAINING GRANT AVAILABLE AT LOCAL LABOUR OFFICE SUPPORT OF SMALL AND MEDIUM-SIZED ENTERPRISES COMPANIES WITH LESS THAN 250 EMPLOYEES COMPANIES WITH LESS THAN 50 EMPLOYEES DUTY-FREE IMPORT OF MACHINERY WAIVER OF CUSTOMS DUTIES ON IMPORTED MACHINERY NO VAT DUTIES ON IMPORTED MACHINERY Source: CzechInvest, 2002

INVESTMENT INCENTIVES uInvestment incentives in the CR have always been granted in accordance with EU rules on state aid uInvestment incentives available in the CR according to current legislation will be able to continue also after the CR‘s accession to the EU uEuro-amendment of the Investment Incentives Act: after the CR‘s accession to the EU, the state aid granting power will be transferred from the Antimonopoly Office to the European Comission

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