On 22 March 2023, the Government of the Czech Republic discussed a draft amendment to the Investment Incentives Act.

The amendment is intended to simplify the process of granting investment incentives. As of 2019, it was at the “discretion” of the government, as to who was granted an incentive and who was not. This subjective element of the government’s decision is now abolished and an applicant requesting an investment incentive, if it meets the required conditions, is explicitly entitled to be granted the incentive. The decision to grant an investment incentive will thus be a one-step decision (by the Ministry of Industry and Trade, as was the case before 2019).

However, the government will continue to decide on “strategic” investment actions under the Investment Incentives Act.

This is a return to legal certainty for applicants, who have generally been reluctant to apply for an investment incentive since 2019. The result has been a drastic reduction in applications and investment incentives granted (e.g. only one was granted in 2022).

According to the transitional provisions, the new rules should will probably only apply to investment incentives requested after the amendment takes effect. The effectiveness itself depends on the legislative process in the Parliament of the Czech Republic. We will keep you informed about any further development.

The government also discussed an amendment to the regulation on investment incentives. We will also inform you about this amendment as soon as more information is available from the government meeting.

Author: Petr Němec, Martin Hahn