Alpha News

EU and Czech Government Grants

( 05 / September / 2007 )

EU and Czech Government Grants

Rodney Yeadon, Chairman of Alpha Management, outlines how investment grants are have maintained the Czech Republic as a favourite destination for FDI. 

Introduction

There are many grants and loans available from various Czech Government Departments and local regional sources. Many of these are managed by the CzechInvest agency which has performed well in recent years. The situation in CzechInvest has changed recently after the new Government reorganised the CzechInvest Top Team with many employees resigning or being dismissed. Happily, Alpha has retained its contacts within the organisation and we continue to bridge the gap between Alpha clients and Ministries bringing positive results for both sides. We know our way around the various bureaucracies.

This relationship has proved its worth for Alpha clients; all have received 100% of grant applied for.

Successes

In 2007, for example, Alpha has prepared applications, managed the Ministry evaluation processes with CzechInvest and supported various rate of payment negotiations and grant audits for the following companies (not identified for commercial confidentiality reasons)

• For a long term client in N.Bohemia, EUR 1,600,000 for the recruitment of workers in an area of high unemployment. In June 2007, EUR 1,400,000 was paid to our Client. The remainder will be paid in August/September

• For another long term client in N Bohemia EUR 900,000 under the same scheme. To date, EUR 750,000 has been paid. The remainder will follow in 2008 as workers are recruited.

• A new Alpha client, Jeyes Group Ltd. from the UK who commenced production in February 2007 has been awarded EUR 3,000,000 for the recruitment and training of workers, EUR 1,500,000 has been received with the remainder to be paid in late 2007/early 2008

New Grants

• For a US manufacturing company, Alpha applied successfully for a grant under the Manufacturing scheme in December 2006. The value is EUR 4,000,000 to be paid in the period late 2007 to end 2009

• For a global manufacturer to the aerospace industry, we are applying for a grant that could exceed EUR 4,500,000. We expect a positive result in October or November 2007

• For a smaller UK repair company, we are applying for a grant under the High Tech Research and Repair grant. This will produce EUR 750,000 when awarded

These grants provide an exceptional incentive to own product producers, contract manufacturers and service companies in the Czech Republic. As well as employment costs being 1/4th to 1/5th of those in German and UK, these grants reduce start up costs and provide positive cash flow as most grants can be received ahead of employment costs.

Timing

Time may be short. The major ‘disadvantaged areas’ grant scheme is scheduled to expire at the year end and applications must be officially received by 31st December. Any company wishing to explore the possibility of grants for employment of staff and workers should start now with applications being submitted in November latest. We know that many companies in the Czech Republic are missing out on grant support. Many Western companies are not even aware of Czech Republic grants to support an investment in the country, either to ship back to the UK or other home market or to take advantage of a safe and commercially successful location in the ‘New’ Europe

For further information, please contact Evzenie Bymova, Alpha’s Commercial Director, at evzenie.bymova@alpha.cz

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