The Economy of the Czech Republic

The Czech Republic with its developing economy has a stable position in the EU. Although the Czech Republic is a member of the European Union, the country uses its own currency, the Czech Koruna (´Kč´). Although the official language in the country is Czech, the percentage of the non-Czech speaking population of expatriates.

The Czech Republic, or Czechia as its new official name, is a European Union country located in Central Europe. The Czech Republic is a member of OECD, WTO, WIPO, NATO and many other international organizations. It is also located in the Schengen Area. Prague is the capital and the largest city and the population of Czechia is 10.65 million (2019).

The Czech Republic is home to many different nationalities. The proportion of the foreign population living in the country is 566,931 as of 2018.

• Ukrainians (131,709)
• Slovaks (116,817)
• Vietnamese (61,143)
• Russians (38,223)
• Poles (21,279)
• Germans (21,267)

According to the Global Peace Index (GPI), the Czech Republic ranks at 11th immediately after Switzerland. As a member of the Visegrad Group, the Czech Republic has strong ties with Slovakia, Poland, Hungary and member countries of the European Union.

Where is the Czech Republic?

The Czech Republic is literally in the heart of Europe. For those wishing to establish a company, its position in Central Europe provides an important strategic benefit for the Czech Republic. The Czech Republic is surrounded by Germany, Austria, Slovakia and Poland. Prague is one of the most important tourist destinations in Europe. Prague, the capital of the Czech Republic, can be reached by direct flights from Turkey in an average 2 hours.

Brief information about the Czech Republic

Capital: Prague

Since the Middle Ages, Prague has been one of the most beautiful cities in the world. The city was founded during the Roman period and developed during the Gothic and Renaissance periods. It is also the capital of the Holy Roman Empire, where two Holy Roman Emperors reside.

Prague is located on the Vltava River, in the northwest of the country. It is the capital and largest city of the Czech Republic. It is the fourteenth largest city in the European Union with its magical bridges, cathedrals, and golden towers. The city is home to about 1.3 million people. The wider urban area has a population of about 2 million.

Prague is one of the most tourist-friendly cities in Europe. 

With advanced airline transport in the centre of Europe, it is just 2 hours’ flight from many European capitals. 

The Weather

The country has an oceanic climate. Even in the summer rain can be seen. The warmest month is July with an average temperature of 21°CC. The coldest month is January with an average temperature of -1 ° C. Winter months are usually snowy.

Milestones in the last 100 years of Czech History

1989: Velvet Revolution In November and December 1989, the communist regime collapsed after protests. One of the prominent figures of the revolution,  Vaclav Havel became the first president of post-communist Czechoslovakia.

1993: Velvet Divorce: Czechoslovakia became bloodless and uneventful in two countries: Czechia and Slovakia.

1999: Czech Republic enters NATO.

2004: Czech Republic enters the EU.

2008: Czech Schengen is included in the visa application.

Official Language of the Czech Republic

The official language of the Czech Republic is Czech. It is spoken by approximately 10.6 million people. Czech is part of Slavic language group besides Russian and Croatian as well as Polish. According to the EF English Proficiency Index report, Czechs have a high level of proficiency in English as a second language. Below you can see some Czech molds:

Hello! – Ahoj!

How are you? – Jak se máš?

I’m fine, thank you. Mám se dobře, děkuji.

Czech Currency

The official currency of the Czech Republic is the Czech Koruna (´Kč´) with the international abbreviation code CZK. 1 Euro equals approximately 25 Czech Koruna. You can click here to see current exchange rates.

The economy of the Czech Republic

Gross minimum wage is 1317 EUR (2020)

The inflation rate of 2.1%

The unemployment rate of 2.2% (Oct 2019)

GDP Growth Rate 2.8%

The Czech Republic is one of the EU member countries which has the highest foreign capital and has the highest chance of development in terms of its potential. In addition to macroeconomic stability, foreign direct investment inflows are increasing every year due to the change in the foreign trade structure of the country and its position in the European geography, qualified labour force, and favourable investment environment. It was described by The Guardian as one of the most developing economies in Europe.

Although Czechia uses its own currency, it has an important place in the European Union economy. 

As a member of OECD. 

The Czech Republic ranks 15th out of inequality-free human development, ahead of countries like the United States, United Kingdom, and France. It has the lowest unemployment rate among EU member states. The Czech Republic has been among the high-income economies since 2006 according to World Bank data.

Inflation in the country is expected to fall to 2.3 per cent by 2021. The Czech National Bank’s target is 2 per cent.

Germany is the largest trading partner of the Czech Republic for both export and import.

Main export items: Passenger cars, parts for road vehicles, parts and accessories, automatic data processing machines, and telephone devices.

Main import items: Parts, accessories, and accessories for road vehicles, automatic data processing machines, telephone equipment, and passenger cars

Which Countries Does Foreign Direct Investment Come From?

• Germany
• Netherlands
• France
• Austria
• Italy
• Japan
• USA

Which sectors do Foreign Direct Investors Invest?

About 80% invested in sectors other than production. If we look at the bottom of the production sector;

The Czech Republic Investment Incentives and Types

Supported areas: Industrial Production, Technology Centers, Business Support Service Centers,

Tax Support: 10-year income tax exemption for companies to be established or already in operation.

Cash support in strategic investments

Cash support for new employment and technology creation.

Key Sectors of National Economy

Automotive, machinery, electronics, life sciences, aerospace, information technology

High Potential Sectors

Information technology, Software development, Life sciences