The Association for Foreign Investment offers comprehensive information for those contemplating investments in the Czech Republic, along with ongoing support during implementation. Its high-quality membership base ensures professional collaboration for prospective investors and employers. We talked about the HR sector with Gabriela Hrbáčková, Vice-Chair of the Steering Committee.
What is your perspective on the current investment climate in the Czech Republic?
The investment climate in the Czech Republic has been quite challenging for investors in recent years, specially when compared to Poland. We face significant obstacles such as an inadequate infrastructure, lengthy permitting processes, a shortage of qualified personnel, and high energy costs. Additionally, the difficulty in finding suitable building land creates a highly problematic situation.
Let us hope that the ongoing legislative changes (though there are still too few), discussions on smart migration, digitalisation, and ongoing highway constructions will be successfully completed, and most importantly, within the expected timeframe.
Discussions on state incentives remain intense because they are crucial for investors. It is essential to continue offering these incentives in the future, but we also need to ensure they are structured in a way that guarantees a future return on investment for the Treasury.
Last but not least, the negative attitude of municipalities poses a significant problem, which is partly related to the way taxes are budgeted.
What is your evaluation of the legislative changes in the labour market, including the recently approved amendments and those still under consideration?
The legislation on the labour market is undoubtedly improving, and it is commendable that the Ministry of Labour and Social Affairs (MLSA) has taken this initiative. Minister Jurečka is the first minister in a long time who has boldly undertaken the task of amending the Labour Code. While more changes are still needed, the progress made so far is at least a step in the right direction.
The amendments introduce increased flexibility for employers, such as extending the probationary period and providing greater flexibility in terminating employment. Additionally, the changes highlight the importance of retraining and upskilling the workforce, which is crucial for maintaining competitiveness. Enhanced support for parents is also a key aspect, with the expectation that the changes will encourage those on maternity leave to return earlier, thereby significantly benefiting our economy.
Changes to the performance of work agreements (PWAs), which have been a topic of extensive discussion, were necessary. Companies had begun to misuse these agreements by using them for regular fulltime employees to evade paying social security and health insurance. The agreements were originally intended for students, mothers on parental leave, and pensioners.
However, a fundamental improvement is needed in the rules for recognising foreign workers’ qualifications, as the process currently takes an excessively long time and exams in Czech are only truly necessary for a limited number of professions. In terms of economic migration, changes are being planned to make it easier for skilled workers from abroad to enter the Czech labour market.
As the Vice-Chair of the Steering Committee of the Association for Foreign Investment (AFI), what actions do you take to enhance the attractiveness of the investment environment in the Czech Republic?
I am pleased that the AFI is actively participating in initiatives to enhance the investment environment in the Czech Republic. We collaborate closely with the Ministry of Labour and Social Affairs, where we observe that practical insights are genuinely considered. Additionally, we work with the Ministry of Industry and Trade on smart migration and investment incentives. However, the law on investment incentives, amended in 2019, has become completely dysfunctional, and regrettably, we are facing an ideological stance from the Ministry of Finance, which has so far refused to engage in any dialogue about making changes.
The Czech investment environment is not solely about attracting new investors. We must also remember those who are already operating here and looking to expand. It is crucial that they feel encouraged to invest further in this country, rather than considering relocating their new expansions or even their entire operations elsewhere. The AFI is dedicated to supporting them in this endeavour.
Thank you for the interview.
