1. Czech Republic
YOUR TRADE PARTNER
2010/2011
Estonia, Latvia, Lithuania
C z e c h R e p u b l i c – Yo u r Tr a d e Pa r t n e r 1

2. ECONOMICS
AŽD Praha
Rail Transportation
Road Transportation
Telecommunications
Traditional Czech supplier of modern control
and signalling systems
Safely to your destination
www.azd.cz
2 C z e c h R e p u b l i c – Yo u r Tr a d e Pa r t n e r

3. CZECH REPUBLIC - YOUR TRADE PARTNER
Compiled by PP Agency, s.r.o. in cooperation with
Ministry of Industry and Trade
Ministry of Foreign Affairs
Confederation of Industry of the Czech Republic
Czech Chamber of Commerce
Confederation of Employers’ and Entrepreneurs’
Associations of the Czech Republic
CzechTrade
CzechInvest
CzechTourism
Czech Centres
Centre for Regional Development of the Czech Republic
Export Guarantee and Insurance Corporation
Czech Export Bank
Deadline: 12 January 2010
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C z e c h R e p u b l i c – Yo u r Tr a d e Pa r t n e r 3

4. FOREWORD
Contents
Foreword by Mr Alexandr Langer, Ambassador
of the Czech Republic to the Republic of Estonia 5
Foreword by Mr Tomáš Pštross, Ambassador
of the Czech Republic to the Republic of Latvia 6
Foreword by Mr Radek Pech, Ambassador
of the Czech Republic to the Republic of Lithuania 7
FOREWORD
Czech Exporters 8
Useful Information 10
ECONOMICS
Czech Economy in 2008 and 2009 13
Czech-Estonian Trade and Economic Relations 16
Czech-Latvian Trade and Economic Relations 18
Czech-Lithuanian Trade and Economic Relations 20
Smaller Projects, Advanced Technologies 22
Road Toll in the Czech Republic 25
Photo: CzechTourism, Ministry of Foreign Affairs archives; Cover photo: Škoda Auto and Škoda Electric archives, CzechTourism, PhotoCombo, www.sxc.hu
Czech Republic – Member of the Schengen Area 25
BUSINESS IN THE CZECH REPUBLIC
Legal Framework for Doing Business in the CR 27
How to Set Up a Company 31
Why Invest in the Czech Republic? 34
Registration and Tax Liabilities 35
The Tax System 36
EU Citizens not Required to Obtain Work Permits 38
Come and Discover the CR 40
INSTITUTIONS
Confederation of Industry of the Czech Republic 42
Czech Chamber of Commerce 42
Export Guarantee and Insurance Corporation 43
Czech Centres 43
CzechInvest - the Investment and Business Development Agency 43
Centre for Regional Development of the CR 44
Czech Trade Promotion Agency/CzechTrade 44
Confederation of Employers’ and Entrepreneurs’
Associations of the Czech Republic 45
Czech Export Bank 46
Czech Tourist Authority – CzechTourism 46
CONTACTS
Useful Addresses in the Czech Republic 48
Useful Contacts in the Republic of Estonia 48
Useful Contacts in the Republic of Latvia 48
Useful Contacts in the Republic of Lithuania 48
Prague, the Dancing House (it placed first in the Design category
of a survey organised by the American Time magazine) The Most Important Websites 50
4 C z e c h R e p u b l i c – Yo u r Tr a d e Pa r t n e r

5. The economies of the Czech Republic and the Republic of Estonia
have much in common: because of their limited domestic markets
both countries are export-oriented, both have undergone radical
transformation and switched over to market economy principles,
both moved quickly to the EU markets and until 2008 showed a rapid
GDP growth. Czech goods and services are for sure not unknown in
Estonia: ŠKODA AUTO, ČSA, Czech tramcars, beer, and other food
products certainly need no introduction. Since the establishment of
the Czech Republic in 1993, Czech-Estonian trade turnover increased
22 fold and in 2007 amounted to EUR 178.6 million. The depend-
ence of both economies on exports and the decline in the absorption
capacity of their largest foreign buyers of goods and services led to
the decline in the performance of the economies of both countries.
Currently we can see that the consequences of the world economic
crisis are being successfully overcome and that the activities on both
the domestic and international markets are gradually regaining their previous strength. In the
Czech Republic, we are impressed by the steadfastness shown by Estonia in its efforts to meet
the Maastricht criteria so as to be able to enter the Eurozone at the beginning of 2011. Both
economies are trying to take advantage of any positive effects the past crisis has brought. It
seems that one such positive effect is the growth of the share of the knowledge economy in the
countries’ economic systems (not all users of the popular Internet product Skype know that it
has its roots in Estonia). Statistics clearly show a growing share of IT technologies in the total
volume of investments made in 2009. Another effect is the lesson we learned about the need
for diversification – it is good to have customers on the EU market, but it would be a pity to
abandon for them the positions gained with pain on third markets (we are following the activi-
ties of Czech and Estonian businessmen, for example in Southeast Asia). This naturally brings
to mind the idea of possible co-operation of Czech and Estonian companies on those markets,
so far practically unaffected by the economic crisis. Czech-Estonian relations have deep roots.
In this connection, let us mention, for example, the disciples of J. A. Comenius, who propa-
gated his work in Tartu in the 17th century, or the Czech writer, literary scientist and critic
Vladimír Macura, who initiated and was one of the founding members of the Baltic Union, an
underground organisation at the time of the communist dictatorship associating friends of the
Baltic nations and their countries occupied by the Soviet Union (predecessor of today’s Czech-
Estonian Club), which operated in the former Czechoslovakia since the mid-1970s. Today, the
Czech Republic and Estonia are close allies in a number of international organisations, such as
the European Union and the North Atlantic Alliance. Our nations must communicate inten-
sively with each other, and trade is one of the forms of communication, which, in addition, has
the capability of accelerating communication at all other levels – political, cultural, tourist, etc.
Without any attempt at simplification, it does not seem to be accidental that the rapid growth
of mutual trade is accompanied by a growing mutual flow of tourists. Our countries are close
to each other both politically and geographically, as there are direct flights connecting Tallinn
and Prague operated by ČSA. To link the Czech Republic and Estonia by road more comfort-
ably, it will be necessary to solve certain problems, but this in no way denies the great potential
that exists for the promotion of mutual economic links. Recently we have been witnessing
the emancipation of the regions of our two countries. In the past six months alone, the South
Bohemia and the South Moravia Regions presented themselves at the Embassy of the Czech
Republic in Tallinn. Similar activities can also be observed on the Estonian side.
As a representative of the Czech Republic in Estonia, I wish your publication Czech Republic
– Your Trade Partner the best of success in the presentation of the Czech Republic and in fur-
thering information about our countries’ mutual co-operation potential in business, produc-
tion, and investment.
Alexandr Langer
Ambassador of the Czech Republic to the Republic of Estonia
C z e c h R e p u b l i c – Yo u r Tr a d e Pa r t n e r 5

6. FOREWORD
I welcome the opportunity of presenting in this, already traditional,
way the sphere of Czech-Latvian trade and economic relations. As
shown by the statistics, trade between the Czech Republic and the
Republic of Latvia followed an upward trend until the end of 2008.
In 2009, however, the Latvian economy experienced difficulties,
moreover aggravated by the global financial crisis and economic
recession. Today, Latvia is striving to combat the serious impact of
the situation, so it is no wonder that the growth curve of our mutu-
al trade has changed its course. A number of traditional exporters
of Czech products to Latvia are faced with serious sales difficulties,
with the solvency of our customers and the purchasing power of
the population, used to buying the well-established products of
the Czech consumer industry, having declined substantially. The
same applies to investment deliveries, as a result of which some of
the planned joint technical projects had to be postponed. The total
volume of our exports in 2009 is estimated to have dropped by
more than one-fourth. In the opposite direction, i.e. in the category
of Latvian exports to the Czech Republic, the situation is slightly
better; imports, however, have always played a relatively small
role in our mutual trade exchange.
Despite these unfavourable circumstances, Czech products have an
excellent record in Latvia and, in addition, their popularity in a cer-
tain sense reflects the Latvian affection for our nation. Although
this publication concerns exclusively economic matters, it is proper
to recall the tremendous popularity of our culture in Latvia. It
would be a great pity to lose anything of that potential. As regards
the economic situation, I am confident that our trade exchange
will soon be back on the old track. In this respect, I am optimistic
and know that it is just a matter of time. Until then I consider it
correct to maintain the positions in this pleasant Baltic country and
be prepared to resume dynamic activities on the Latvian market.
Although small in terms of the country’s population, this market is
relatively important from the point of view of Latvia as a country
at the crossroads of the European transit routes, with an advan-
ced infrastructure of its ports. It is a strongly competitive market,
where the greatest players are Latvia’s neighbours and countries of
the European North. So far, however, we have stood our ground in
this competition, and I am confident that nothing will change about
it in future.
Tomáš Pštross
Ambassador of the Czech Republic to the Republic of Latvia
Photo: Ministry of Foreign Affairs archives
6 C z e c h R e p u b l i c – Yo u r Tr a d e Pa r t n e r

7. I am pleased to have the opportunity to address the readers of the
publication “Czech Republic - Your Trade Partner” from Vilnius,
the capital of Lithuania. Czech-Lithuanian relationship is historically
very fruitful in both economic and all-round area. Following our
commercial relations during almost last twenty years, we can see
continual increase of mutual business turnover with an exception
due to global economic crisis since the fourth quarter of the year 2008.
But this is a strong challenge to fight the downturn and to go back to
the economic growth. The real milestone was definitely the year 2004
– the accession to the EU opened up the possibility for a qualitatively
higher level of our co-operation. Additionally, Lithuania became 2004
a member of NATO. As relations between our countries have no
political or other problems, trade exchange and other forms of econ-
omic co-operation are thus coming increasingly to the forefront of the
common interests between Lithuanians and Czechs. Bilateral contacts
between the Czech Republic and the Republic of Lithuania are very intensive, stemming primarily
from the traditionally friendly relations between the two countries. The first written records of Czech
-Lithuanian relations can be found in a document dating back to the year 1397, when a Lithuanian
college was founded at Prague University. Jan Žižka took part in the Battle of Tannenberg (Žal-
giris-Grűnwald) alongside with the Lithuanian Grand Duke Vytautas the Great in 1410. In the 19th
century the Czech national movement gave impetus to the Lithuanian national uprising and the
Czech letters of ž,č,š found their way to the Lithuanian alphabet. Czechoslovakia was one of the
first states which recognised the independent Lithuania on 5 January 1922. With the exception of the
forcible break between 1939 and 1990, the Czech Republic and Lithuania have had very active diplo-
matic relations. We will celebrate 19th anniversary of re-established diplomatic relations on the 9th
September 2010. An important part of the work of the Czech Embassy in the Republic of Lithuania
is economic diplomacy and the support of an export-oriented policy. In co-operation with represen-
tatives of the Czech Trade Agency we are creating favourable conditions particularly for small and
medium-sized businesses to assert themselves in the Lithuanian market. Lithuania has traditionally
been the Czech Republic’s largest trade partner among the Baltic states. In 2008, the mutual trade
kept the last year’s level, and it reached more than EUR 424 million. In 2009, it seems to be worse.
The turnover has lowered about 36% during three quarters of this year. The Embassy of the Czech
Republic, however, does not limit itself to just one-way commodity trading; with the help of lectures,
the presentation of plans and the participation of Czech firms in trade fairs and exhibitions we are
trying to support bilateral entrepreneurial activities. We are strengthening the cooperation with our
government organisation Czech Trade Agency to support Czech-Lithuanian business activities.
More and more Lithuanians visit our country as tourists and businessmen. We want to promote
our country as a good place for a holiday, a good exhibition site and as one of the most important
congress centres in Europe in contemporary crisis situation particularly.
In the year 2010, we shall focus on:
l monitoring large investment projects, especially in energetic and transport systems and passing
on information to Czech businessmen and entrepreneurs so as to enable them to prepare for parti-
cipation in public tenders;
l the study of distribution channels and the flow of commodities, passing on of information to
Czech firms wishing to enter the Lithuanian market, in close cooperation with the local office of
the Czech Trade Agency;
l effort of our countries in overcoming the present economic downturn.
As the representative of the Czech Republic in Lithuania, I hope for the greatest success in mutual
relations, in business and enterprise.
Radek Pech
Ambassador of the Czech Republic to the Republic of Lithuania
C z e c h R e p u b l i c – Yo u r Tr a d e Pa r t n e r 7

8. FOREWORD
Czech Exporters
Czech companies presenting their products in this publication
wish to expand their exports and to have business partners in the Baltic states.
The companies are listed by sector classification – NACE.
03.21 Marine aquaculture 27.90 Manufacture of other electrical equipment
Josef Lonský - AQUA TROPIC 9 INGE Opava, spol. s r.o. 51
03.22 Freshwater aquaculture Elektro, výrobní družstvo v Bečově nad Teplou 26
Josef Lonský - AQUA TROPIC 9 28.21 Manufacture of ovens, furnaces,
10.92 Manufacture of prepared pet foods and furnace burners
Josef Lonský - AQUA TROPIC 9 E-therm TZ s.r.o. 58
18.10 Printing and service activities related to printing 28.40 Manufacture of metal-forming machinery and machine
Böttcher ČR , k.s. 12 tools
20.30 Manufacture of paints, varnishes and similar coatings, TOS VARNSDORF a.s. 47
printing ink and mastics 28.93 Manufacture of machinery for food, beverage,
METRUM s.r.o. 15 and tobacco processing
20.42 Manufacture of perfumes and toilet preparations DESTILA, s.r.o. 49
GOLDEN LINE s.r.o. 39 J 4 s.r.o. 49
20.59 Manufacture of other chemical products n.e.c. 28.99 Manufacture of other special-purpose machinery n.e.c.
GOLDEN LINE s.r.o. 39 E-therm TZ s.r.o. 58
22.10 Manufacture of rubber products J 4 s.r.o. 49
Böttcher ČR , k.s. 12 29.10 Manufacture of motor vehicles
22.21 Manufacture of plastic plates, sheets, tubes, and profiles SOR Libchavy spol. s r.o. 47
TERMOLUX, s.r.o. 29 30.20 Manufacture of railway locomotives and rolling stock
22.23 Manufacture of builders’ ware of plastic CZ LOKO, a.s. 55
TERMOLUX, s.r.o. 29 SaZ s.r.o. 54
22.29 Manufacture of other plastic products 30.99 Manufacture of other transport equipment n.e.c.
OBZOR, výrobní družstvo Zlín 30 SaZ s.r.o. 54
23.42 Manufacture of ceramic sanitary fixtures 31.09 Manufacture of other furniture
LE BON, spol. s r.o. 53 LE BON, spol. s r.o. 53
RIHO CZ, a.s. 52 RIHO CZ, a.s. 53
25.20 Manufacture of tanks, reservoirs, and containers of 33.17 Repair and maintenance of other transport equipment
metal SaZ s.r.o. 54
DESTILA, s.r.o. 49 35.12 Transmission of electricity
EURO TEPLO s.r.o. 33 KPB INTRA s.r.o. 56
HAAS + SOHN Rukov, s.r.o. 34 35.13 Distribution of electricity
25.29 Manufacture of other tanks, reservoirs, KPB INTRA s.r.o. 56
and containers of metal 46.14 Agents involved in the sale of machinery, industrial
INTERO, Chmelan a spol., equipment, ships, and aircraft
společnost s ručením omezeným 59 Jovbak s.r.o. 15
25.50 Forging, pressing, stamping, and roll-forming 46.45 Wholesale of perfume and cosmetics
of metal; powder metallurgy GOLDEN LINE s.r.o. 39
OBZOR, výrobní družstvo Zlín 30 52.21 Service activities incidental to land transportation
25.99 Manufacture of other fabricated metal products n.e.c. AŽD Praha s.r.o. 2
EURO TEPLO s.r.o. 33 62.00 Computer programming, consultancy, and related
26.00 Manufacture of computer, electronic, activities
and optical products Institut mikroelektronických aplikací s.r.o. 51
Institut mikroelektronických aplikací s.r.o. 51 64.11 Central banking
27.10 Manufacture of electric motors, generators, Česká exportní banka, a.s. 45
transformers, and electricity distribution and 64.99 Other financial service activities, except insurance and
control apparatus pension funding n.e.c.
AŽD Praha s.r.o. 2 Česká exportní banka, a.s. 45
27.12 Manufacture of electricity distribution 73.10 Advertising
and control apparatus M.I.P. Advertising, a.s. 24
OBZOR, výrobní družstvo Zlín 30 74.90 Other professional, scientific, and technical activities n.e.c.
Elektro, výrobní družstvo v Bečově nad Teplou 26 E-therm TZ s.r.o. 58
27.32 Manufacture of other electronic and electric 80.20 Security systems service activities
wires and cables Institut mikroelektronických aplikací s.r.o. 51
KABELOVNA Děčín Podmokly, s.r.o. 57 86.10 Hospital activities
27.33 Manufacture of wiring devices Klinika plastické chirurgie EMOTIONS, s.r.o. 41
KABELOVNA Děčín Podmokly, s.r.o. 57 86.22 Specialist medical practice activities
Elektro, výrobní družstvo v Bečově nad Teplou 26 Klinika plastické chirurgie EMOTIONS, s.r.o. 41
27.40 Manufacture of electric lighting equipment 96.02 Hairdressing and other beauty treatment
INGE Opava, spol. s r.o. 51 Klinika plastické chirurgie EMOTIONS, s.r.o. 41
8 C z e c h R e p u b l i c – Yo u r Tr a d e Pa r t n e r

9. THE RELIABLE
PRODUCER EVEN
FOR YOUR COMPANY
AQUA
TROPIC
LONSKY
K PEROVNE 740, 102 00 PRAHA 10, CZECH REPUBLIC
Tel.: 272 702 880, Fax: 272 702 947
http://www.lon.cz • e-mail: lon@lon.cz
C z e c h R e p u b l i c – Yo u r Tr a d e Pa r t n e r 9

10. FOREWORD
Useful Information
BASIC DATA struction and Development, the European Bank for Reconstruction
Population 10 506 813 and Development, the OECD, as well as many other organisations.
(31 December 2009)
Area 78 864 sq.km UNESCO WORLD HERITAGE
The capital city Praha (Prague) The UNESCO World Heritage List includes the following cities and
System of government a republic sites: Prague, Český Krumlov, Kutná Hora, the Litomyšl Chateau,
Language Czech Telč, the Lednice-Valtice area, Zelená Hora - St John of Nepomuk
Highest peak Sněžka (Snow) Mountain Church, Holašovice, Kroměříž (chateau and gardens), the Holy
(1602 m above sea level) Trinity Column in Olomouc, the Tugendhat Villa in Brno (designed
Time zone Central European Time by architect Ludwig Mies van der Rohe), and St Procopius Basilica
GMT + 1, summer time and the Jewish Cemetery in Třebíč. For more information, please see
GMT + 2 www.unesco-czech.cz.
Monetary unit 1 Czech crown
(Kč/CZK) = 100 halers PROMINENT FIGURES
Internet domain .cz The Czechs are described as a very cultural nation which has
contributed to the world a large number of prominent figures. The
The President of the Czech Republic is Václav most significant rulers and heads of state include emperor Charles
Klaus. IV and presidents T. G. Masaryk, Edvard Beneš, and Václav Havel.
Names of world renown include Jan Amos Komenský (Comenius)
MEMBERSHIP OF ORGANISATIONS “the Teacher of Nations“, scientists Jaroslav Heyrovský (Nobel Prize
Photo: CzechTourism
The Czech Republic is a member of the laureate for chemistry), Otto Wichterle, a Czech chemist who
European Union, the United invented contact lenses, and Antonín Holý
Nations, NATO, the WTO, the Other useful information on the (professor of honour in medicinal chemist-
International Monetary Fund, the Czech Republic is at www.czech.cz ry), who discovered drugs against AIDS.
International Bank for Recon- Famous people of culture include composers
10 C z e c h R e p u b l i c – Yo u r Tr a d e Pa r t n e r

11. The Capital of Prague - the dominant Prague Castle
State Symbols of the Czech Republic
Large State
Coat of Arms State Flag
Czech Republic, a.s., T-Mobile Czech Republic
a.s., Vodafone Czech Republic a.s., and
Bedřich Smetana, Leoš Janáček, Antonín Dvořák, and Bohuslav MobilKom, a.s.
Martinů, writers Franz Kafka, Karel Čapek, Jaroslav Seifert (Nobel The most commonly used credit cards in the
Prize laureate), Jaroslav Hašek, Bohumil Hrabal, and Milan Kunde- Czech Republic are: Eurocard/MasterCard,
ra. Winners of the American Academy Award are film directors Maestro, and Visa.
Miloš Forman (born in former Czechoslovakia), Jiří Menzel, Jan
Svěrák, and the singer Markéta Irglová. Painters to be named are THE BIGGEST CITIES
František Kupka and Alfons Mucha. Athletes of world renown OF THE CZECH REPUBLIC
include Emil Zátopek, Petr Čech, Jaromír Jágr, Dominik Hašek, city number of inhabitants
Pavel Nedvěd, Jan Železný, Kateřina Neumannová, and many 1. Praha 1 180 100
others. Martina Navrátilová and Ivan Lendl are also of Czech origin. 2. Brno 366 000
The winners of gold medals at the 2008 Olympic Games in Beijing 3. Оstrava 310 000
were Kateřina Emmons, Barbora Špotáková, and David Kostelecký. 4. Plzeň 163 000
5. Оlomouc 100 000
PRACTICAL INFORMATION 6. Liberec 98 000
Country dialling code: +420. Details regarding phone numbers are 7. České Budějovice 95 000
available at the following website: www.zlatestranky.cz. 8. Ústí nad Labem 95 000
Licences to operate mobile phone networks in the Czech Republic 9. Hradec Králové 94 000
have been awarded to the following companies: Telefónica O2 10. Pardubice 88 000
C z e c h R e p u b l i c – Yo u r Tr a d e Pa r t n e r 11

12. ECONOMICS
■ Printing
● Roller coverings
● Printing chemicals
● Printing blankets
Main supplier of rubber rollers for printing machines of the
brands: HEIDELBERG, MAN-ROLAND, ADAST,
KBA-PLANETA, KBA-GRAFITEC, WIFAG, GOSS, KOMORI,
RYOBI
■ Sleeves
■ Escalator handrails
■ Rubber coverings for industrial rollers
■ Polyurethane application on the roller
■ Use of technical rollers:
wrapping production, textile industry, steel industry, paper
industry, tanning industry, plastic materials industry, furniture
industry, chemical industry, food industry, electrical
engineering, glass industry, mechanical engineering
Böttcher ČR, k.s., Tovární 6, 682 01 Vyškov, Czech Republic, Phone: +420 517 326 521-5, Fax: +420 517 341 718
E-mail: bottcher@bottcher.cz, www.bottcher.cz
UAB "Bottcher Balticum", Radmes g. 3B, LT-82142, Radviliškis, Lithuania, Tel./Fax: +370 422 50 538, Mob.: +370 685 86 248
E-Mail: bottcher@bottcher.lt
12 C z e c h R e p u b l i c – Yo u r Tr a d e Pa r t n e r

13. Czech Economy
in 2008 and 2009
In 2008, and particularly in 2009, the world crisis manifested itself in Production declined in practically all sectors of
a general decline in economic activities, the growth of unemploy- industry; the decline was especially noted in
ment, and an increasing budget deficit. food and beverage production, the manufac-
ture of tobacco products, textiles, clothing and
GROSS DOMESTIC PRODUCT basic metals, and in metallurgy and metal-
Economic growth, measured by the GDP growth rate, already slowed working. The rapid decline in industrial
down significantly in 2008 in comparison with previous years. Year- production continued in all quarters of 2009,
on-year, GDP rose by 2.3%, with growth rates in the individual when output dropped by 13.4% year-on-year,
quarters slowing down steadily. GDP growth in 2008 mirrored the of which, 14.6% was in the manufacturing
good nett export results in the first three quarters; in the 4th quarter, industry.
just as in all four quarters of 2009, the effect was negative. In 2009, the
volume of GDP dropped by 4.3% year-on-year: in the 1st quarter by FOREIGN TRADE
4.2%, in the 2nd by 4.7%, in the 3rd by 4.1% and in the 4th by 4.2%. The In 2009, for the first time in the history of the
only item that mitigated the decline was final household and govern- independent Czech Republic, foreign trade*)
ment spending. The influence of all other components was negative. saw a marked fall. While, in 2008, the foreign
trade turnover was 0.2% up on the previous
INDUSTRY year, in 2009 it was 16% down year-on-year.
In 2008, industrial production was 1.9% below the 2007 level, mainly In 2009, exports were 13.9% lower in com-
as a result of a rapid fall in the 4th quarter (by 86.4% year-on-year). parison with 2008 and imports were down by
Macroeconomic indicators of the Czech Republic
2003 2004 2005 2006 2007 2008 7) 20097)
Gross Domestic Product (current prices) CZK, billion 2 577.1 2 814.8 2 983.8 3 222.4 3 535.5 3 689.0 3 627.2
Gross Domestic Product %, real, y/y 3.6 4.5 6.3 6.8 6.1 2.5 -4.3
Gross Domestic Product in PPS 1) PPS/inhab. 15 215.0 16 262.0 17 058.0 18 213.0 19 949.0 20 150.0 n.a
Overall productivity of labour %, y/y 4.7 4.1 5.4 4.8 4.6 2.4 -2.9
Industrial production %, y/y 5.5 9.6 6.7 8.2 10.5 -1.9 -13.4
Unemployment 2) % 10.3 10.3 9.7 7.7 6.0 6.0 9.2
Inflation (HICP) 3) %, average -0.1 2.6 1.6 2.1 3.0 6.3 0.6
Inflation 2) %. y/y 1.0 2.8 2.2 1.7 5.4 6.3 1.0
Year-on-year index of average nominal
% 6.6 6.5 5.3 6.5 7.3 8.4 3.5
wages *)
Year-on-year index of average real wages *) % 6.5 3.6 3.3 3.9 4.4 2.0 2.5
Exports 4), 5) EUR, mil. 43 053.0 54 075.0 62 961.0 75 699.0 89 396.0 99 247.0 80 711.0
Exports 4), 5) %, y/y 5.7 25.6 16.5 20.2 18.0 -25.5 -18.9
Imports 4), 5) EUR, mil. 45 236.0 54 914.0 61 647.0 74 305.0 86 238.0 96 533.0 74 950.0
Imports 4), 5) %, y/y 5.1 21.4 12.3 20.2 16.1 -27.2 -22.7
Balance of trade 4), 5) EUR, mil. -2 183.0 -839.0 1 314.0 1 394.0 3 159.0 2 714.0 5 762.0
Foreign exchange reserves of ČNB 2) EUR. billion 21.4 20,9 25.1 23.9 23.7 26.6 28.8
CZK/EUR 6) average 31.844 31.904 29.784 28.343 27.762 24.942 26.445
CZK/USD 6) average 28.227 25.701 23.947 22.609 20.308 17.035 19.057
Source: Czech Statistical Office, Czech National Bank (ČNB); General note: y/y shows year-on-year change in the indicator, n.a. = not available
1) PPS- Purchasing Power Standard; 2) At the end of the period; 3) HICP = Harmonized Index of Consumer Prices; 4) Foreign trade data expressed in EUR are the sum of the different monthly values in CZK calculated by the average monthly
exchange rate announced by the Czech National Bank; 5) 2009 data according to the statement of 26 February 2010; 6) Czech National Bank; 7) Preliminary data; *) of natural persons
C z e c h R e p u b l i c – Yo u r Tr a d e Pa r t n e r 13

14. ECONOMICS
USEFUL INFORMATION:
www.czso.cz – Czech Statistical Office
www.cnb.cz – Czech National Bank
www.mfcr.cz – Ministry of Finance dation sector, in transport (especially as a result of lower fuel
prices), postal services and telecommunications, and in the clothing
and footwear sector.
17.8%. The balance of trade (favourable ever
since 2005) which, in 2008, amounted to CZK WAGES
67.2 billion (EUR 2.7 billion/USD 4.2 billion), Average gross monthly nominal wages of employees (full-time
in 2009 rose to CZK 152 billion (EUR 5.8 equivalent) in 2008 amounted to CZK 22 691 (EUR 907), a 1.9%
billion/USD 8.1 billion), the highest surplus increase year-on-year in real terms. In 2009, wages grew at a
in CR’s history. In 2009, exports covered slower rate, annual average gross monthly wages amounting to
imports by 107.8% as against 102.8% in 2008. CZK 23 598, 3.0% more than in the previous year in real terms. In
Territorially, the favourable balance of trade the 4th quarter, nominal wages grew by 5.2% year-on year, which
with the EU states rose slightly year-on-year in real terms equals 4.8%. This relatively high growth, however,
and the deficit in trade with states outside the was influenced by dismissals of low-wage employees and a lower
EU declined. In the commodity structure, the sick leave rate.
surplus in semi-finished product and indus-
trial goods trading increased, while trade in Jana Bondyová
machinery and transport equipment showed Czech Statistical Office
a decline. www.czso.cz
PRICES *) All data in this section relate to figures applying on the deadline date, 26 February 2010;
In 2008, the inflation rate, measured by the for conversion into euros, the average monthly exchange rate announced by the Czech
consumer price index, amounted to 6.3%, the National Bank has been used.
highest level for the past 10 years. This
increase was mainly due to higher energy and
housing prices, higher VAT rate, and an OTHER INFORMATION:
www.autosap.cz – automotive industry
increase in food prices. In 2009, the average
www.acri.cz – railway industry
annual inflation rate amounted to 1.0%, the
www.alv-cr.cz – aircraft industry
second lowest inflation rate since 1989. This
Photo: Škoda Auto
www.hz.cz , www.svazslevaren.cz – heavy engineering
slowdown was mainly due to the waning www.spis.cz , www.czechict.cz – software and IT
impact of indirect tax changes. Prices declined www.czechtourism.com, www.ahrcr.cz – tourism
in particular in the food and non-alcoholic www.csze.cz , www.aem.cz – power industry
beverage sector, in the catering and accommo- www.schp.cz – chemical industry
14 C z e c h R e p u b l i c – Yo u r Tr a d e Pa r t n e r

15. C z e c h R e p u b l i c – Yo u r Tr a d e Pa r t n e r 15

16. ECONOMICS
Czech-Estonian Trade
and Economic Relations
Trade between the Czech Republic and Table 2. The most important commodities of Czech exports
Estonia has a long tradition. The political in 2009* (Nomenclature Harmonised System 4)
changes that took place in Central and East Share in EUR
Europe at the end of the 1980s meant for both Code Commodity
% thousand
countries a new era of building political and Motor cars and other motor vehicles principally
commercial and economic relations for both 8703 13.57 11 451
designed for the transport of persons
countries. At the moment, bilateral busi- Organic surface-active agents; washing and
ness relations are influenced by the current 3402 3.99 3 370
cleaning preparations
economic crisis. 3917 Tubes, pipes, hoses, and fittings of plastics 3.04 2 569
As for the amount of trade exchange, Estonia is
Motor vehicles for the transport of ten or more
the Czech Republic’s smallest business partner 8702 2.86 2 412
persons, including the driver
from among the Baltic states.
Automatic data processing machines; units,
Between 1999 and 2007 the growth of exports 8471 1.90 1 603
readers etc.
to Estonia was stable and, with the exception of
Machinery for pocessing by change of
2001, the same is true for the turnover. Due to the 8419 1.78 1 501
temperature, non-electric water heaters
economic crisis, exports fell significantly at the
Articles for conveyance/package of goods,
end of 2008, which resulted in a slight decrease in 3923 1.71 1 444
stoppers, lids, caps etc, of plastics
the year-on-year comparison with 2007. Exports 8308 Clasp/buckle/eye, etc. of base metal 1.62 1 367
continued to decline in 2009 and were by 39%
8414 Air and vacuum pumps, compressors, fans etc. 1.56 1 316
lower than in 2008. In 2009, imports to the Czech
Republic from Estonia declined by 27% and the Electrical apparatus for line telephony or line
8517 1.51 1 275
telegraphy, including line telephone
turnover by 36%. Improvement of the adverse
development of mutual trade is still at the level of Ceramic sink,wash basin, bath, bidet, and
6910 1.44 1 218
similar sanitary fixture
desire (see Table 1).
2309 Animal feed preparations, nes 1.43 1 204
GOODS STRUCTURE Others 63.59 53 683
Czech exports to Estonia in 2009 consisted main- Total 100. 00 84 413
ly of personal vehicles and other vehicles for Source: Ministry of Industry and Trade (March 2010), * preliminary data
passenger transportation (14% of total export),
pipes and hoses from plastic materials (3 %), BOTH COUNTRIES AS EU MEMBERS
road motor vehicles (2.9%), automatic data Due to the fact that both countries have become parts of the single
processing machines (1.9%), heating and cooling internal EU market conforming to EU legislation, there are at present
appliances (1.8%) etc. The main exporters in- no obstacles or limitations to bilateral business. The internal EU
clude ŠKODA AUTO, Czech Airlines, Glaverbel market is exempt from customs duty and control regimes. However,
Czech, Aircraft Industries, SOR Libchavy, Bralo there is a reporting obligation in the INTRASTAT statistics system as
CZ, Laufen CZ etc. (see Table 2). well as measures resulting from applying national tax directives for
Czech imports from Estonia in 2009 con- VAT and the excise tax.
sisted predominantly of flat rolled iron and
steel products (9.2% of total import), flooring PERSPECTIVES OF BUSINESS RELATIONS
(8.4%), wires, cable and insulated electri- The Czech Republic is interested in the Estonian market. Czech
cal conductors (6.2%), profiled wood (5.6%) goods were present on the local market in the pre-war period as well
and cut and cleft timber (5.2%) etc. Estonian as in the past decades of mutual economic history and they have
goods are imported by companies such as always been sought after.
ANIMALCO, Galvex, SKAN HOLZ Jirkov or Czech companies take advantage of the fact that the Estonian market is
Baltaxia (see Teble 3). one of the most open areas in Europe; there is an equal competing envi-
ronment for both local and foreign companies.
Table 1. Development of trade between the Czech Republic and Estonia Estonian businessmen prefer direct trade rela-
(EUR million)
tions. The absorption of the Estonian market is
2001 2002 2003 2004 2005 2006 2007 2008 2009* limited and at the moment of economic crisis
the purchasing power of the population is
Exports 32.4 39.3 49.3 68.3 76.4 116.3 146.4 137.6 84.4
unfortunately significantly falling.
Photo: PhotoCombo
Imports 14.9 17.9 27.2 24.0 20.8 26.6 32.3 38.6 28.2
Turnover 47.3 57.2 76.5 92.3 97.2 142.9 178.7 176.3 112.6 CZECH PRODUCTS IN ESTONIA
Balance 17.5 21.4 22.1 44.3 55.6 89.7 114.1 99.0 56.2 Noticeable Czech products in Estonia are
Source: Czech Statistical Office, Ministry of Industry and Trade, *preliminary data Škoda cars (the number of Škoda Superbs
16 C z e c h R e p u b l i c – Yo u r Tr a d e Pa r t n e r

17. been exhausted), Czech glass has a good repu-
tation on the market.
One of the significant bilateral economic
events of 2009 was the opening of a combined
power station with 67 MW heat output and
23 MW electric output, the turbine supplier
of which was Siemens Industrial Turboma-
chinery s.r.o., Brno. In the field of transport
technology, Czech producers and suppliers of
trams and related services watch the inten-
tions of Tallinn’s municipal council, who want
to start the project of building two new tram
routes and to replace the tram fleet in Tallinn.
Czech suppliers could participate in the project
of a railway connection between the Baltic
states and West Europe – Rail Baltica. There is
a chance to succeed, particularly in the sphere
of railway building. SOR Libchavy is a suc-
cessful bus supplier to Estonia.
A highly perspective field of Estonian econ-
omy is also the energy industry: technological
innovations in energy production are ex-
pected. New constructions will probably take
place, such as power stations with combined
production of electricity and heat, those
using the biomass, and wind power stations.
Table 3. The most important commodities of Czech imports in Improvement of the technology of burning
2009* (Nomenclature Harmonised System 4) bituminous shale and significant reconstruc-
Share in EUR tion of electric distribution networks can also
Code Commodity
% thousand be expected. Czech firms can offer cooperation
Flat-rolled products of iron, steel over 600mm, in these areas.
7210 9.17 2 587
plated or coated Significant financial resources from national
Carpets and other textile floor covering tufted as well as EU funds will also be invested into
5703 8.42 2 376
including finished environmental enhancement. Czech companies
8544 Insulated wire/cables, optical fibre cables 6.22 1 754 can offer technologies for water treatment and
4409 Wood profiled,planed, sanded, finger jointed 5.64 1 590
waste liquidation. An example of successful
business is Ecofluid, which supplied waste-
Wood sawn/chipped, sliced/peeled etc. above
4407 5.22 1 474 water treatment plants for six locations in 2009.
6mm
Essential positive role in mutual Czech-Esto-
Mattress supports;mattresses,quilts,fitted with
9404 4.35 1 226 nian relations has been played for six years by
springs, stuffed etc.
the direct Czech Airlines connection between
Fish fillets and other fish meat fresh, chilled or
0304 4.30 1 213 Prague and Tallinn. The strong position of
frozen
Czech Airlines on the Estonian market allows
9406 Prefabricated buildings 4.20 1 185
for the development of other services, espe-
Veneer sheets & sheets for plywood & wood
4408 3.77 1 063 cially various forms of tourism in the whole
sawn lengthwise, sliced/peeled up to 6 mm
of the Czech Republic. To increase tourism in
Prepared/preserved fish; caviar and caviar
1604
substitutes from fish eggs
3.55 1 001 both directions is in the interest of both our
countries.
Mastics, painters fillings & nonrefractory surfacing
3214 3.07 867 Despite the fact that Estonia’s transparent tax
preparations for walls etc.
system, stable exchange rate of local currency
4016 Articles of vulcanised rubber (not hard rubber) 2.98 840
to Euro, a relatively high level of education,
8708 Parts, components of tractors, trucks, cars etc. 2.49 704 and good knowledge of languages make it
Others 36.62 10 336 a paradise for foreign investment, Czech
Total 100.00 28 216 companies have so far invested neither into
Source: Ministry of Industry and Trade (March 2010), *preliminary data
Estonian industry nor its services. There are
also no Czech-Estonian joint-ventures in
on Estonian roads has increased; motoring magazines evaluated Estonia.
the Roomster model as the best model on the Estonian market in
2007, and Škoda Yeti has become Car of the Year 2010). Czech beer Luboš Nový
is traditionally sold in Estonia (there are still possibilities for further Head of Commercial and Economic Department
expansion in this field), the assortment of food products is getting Embassy of the Czech Republic in Estonia
wider (here, too, the potential of increase of trade exchange has not www.mzv.cz/tallinn
C z e c h R e p u b l i c – Yo u r Tr a d e Pa r t n e r 17

18. ECONOMICS
Czech-Latvian Trade
and Economic Relations
Trade and economic relations between the as a whole, this was the second year when both exports and imports
Czech Republic and Latvia have been declined, although the surplus on the Czech side of the balance sheet
showing a marked increase recently. As in grew. Here, it should be noted that, from the point of view of the
other European relations, this increase is Latvian side, in the past two years the deficit on the Czech side of the
mainly due to the process of integration of the mutual balance of trade decreased substantially under the influence
two countries into the European Union. We of the trends mentioned above. The Czech side, too, sees this fact, on
have witnessed a distinct revival, a feature the whole, as a positive signal, because a high imbalance in trade
usually accompanying integration processes. definitely is not our aim.
The entwinement of economic structures on
the global and European scale, however, also CZECH MEANS OF TRANSPORT IN LATVIA
has less favourable aspects, as could be seen Despite the crisis – every crisis must end one day, after all – it can
at the end of the first decade of this century, be said that the two countries have a lot to offer each other, and
with the onset of the financial and economic their mutual trade continues to be based on a very wide range of
crisis. products. A certain success of Czech exporters is to be seen literally
at every step. Since September 2009, all of the 150 contracted
DEVELOPMENT OF TRADE RELATIONS modern Škoda 24 Tr Irisbus trolleybuses have been plying the
Logically, after years of growth, Czech-Latvian streets of Riga, adding comfort to the city’s public transport. In
trade relations, too, could not escape a certain addition, in spring 2010 low-platform tramcars, also bearing the
decline. While in the years 2003-2007 the Škoda trade mark, will appear in the Latvian capital, in fulfilment
volume of mutual trade grew by tens of per of a contract signed by the two sides, and this is not the end of the
cent annually and in 2006 showed a nearly 40% modernisation of Riga’s public transport. As all good things come
growth year-on-year, in mid-2008 the trend in threes, the large number of Škoda cars on Latvian roads is
reversed rapidly and started in the opposite incontestable evidence of the fact that in the past four years this
direction. In 2008, mutual trade turnover trade mark has been the most popular one on the local market, of
dropped by 20.2%, with Czech exports falling which Škoda takes a share of more than 10%.
by 24% in comparison with 2007, while Latvian
exports to the Czech Republic were still PARTICIPATION OF THE CR IN
growing, although at a slower rate, and THE RECONSTRUCTION OF RIGA’S POWER PLANT
showing a 9.2% growth. In May 2009, the first power unit of Riga’s reconstructed heat and
The economic crisis, and especially the drastic power generating plant, TEC-2, for which Škoda Power supplied
decline in imports into Latvia, also left an its 150 MW turbo-set with accessories, was ceremonially put into
imprint on the development of mutual trade in
2009. According to preliminary figures avail- Table 2. The most important commodities of Czech exports in
able before the deadline for this issue, Czech 2009* (Nomenclature Harmonised System 4)
exports in 2009 dropped by 29.2% (in Euro-
Share in EUR
denominated prices), while Latvian sales to the Code Commodity
% thousand
CR rose by 9.4% year-on-year. In absolute
8702 Public-transport type passenger motor vehicles 25.78 28 245
values, in the first ten months of 2009, Czech
exports were worth EUR 109.5 million, while Motor cars and other motor vehicles principally
8703 6.20 6 789
designed for the transport of persons
imports from Latvia amounted to EUR 34.1
million (see Table 1). 4409 Wood profiled, planed, sanded, finger jointed 5.52 6 049
The preliminary data for 2009 indicate that, Organic surface-active agents; washing and
3402 4.12 4 510
from the point of view of Czech foreign trade cleaning preparations
3901 Polymers of ethylene, in primary forms 2.98 3 267
Table 1. Trade exchange between the Czech Safflower, sunflower/cotton-seed oil & fractions,
1512 2.62 2 866
Republic and Latvia (EUR thousand) not chem mod
8537 Switchboards, panels, control panels etc. 1.72 1 882
Exports Imports Turnover Balance
Electrical apparatus for line telephony or line
8517 1.64 1 792
Photo: Škoda Electic archives
2005 113 513 15 157 128 670 98 356 telegraphy, including line telephone
2006 167 870 20 117 187 987 147 753 Automatic data processing machines; units,
8471 1.59 1 739
2007 201 737 26 094 227 831 175 643 readers etc.
2008 153 345 28 504 181 849 124 841 Others 47.85 52 426
2009* 109 565 34 105 143 670 75 460 Total 100.00 109 565
Source: Czech Statistical Office, Ministry of Industry and Trade, *preliminary data Source: Ministry of Industry and Trade, *preliminary data
18 C z e c h R e p u b l i c – Yo u r Tr a d e Pa r t n e r

19. Table 3. The most important commodities of Czech imports in
2009* (Nomenclature Harmonised System 4)
Share in EUR
Code Commodity
% thousand
Bars and rods of iron or non-alloy steel, not
further worked than forged, hot-rolled, hot-
7214 9.77 3 331
operation. Owing to its reconstruction, this drawn or hot-extruded, but including those
twisted after rolling
combined heat and power generating source
has become the most modern facility of its kind Hot-rolled, hot-drawn or hot-extruded, but
8517 8.41 2 870
in the entire Baltic region. From the examples including those twisted after rolling
mentioned here, the list of which could con- Tubes, pipes and hollow profiles (e.g.open seam
tinue, it can be seen that the leading items in 7306 or welded, riveted or similarly closed), of iron or 7.85 2 679
steel
Czech exports are commodities with a high
amount of added value. Prepared/preserved fish; caviar and caviar
1604 6.03 2 056
substitutes from fish eggs
COMMODITY STRUCTURE Structures & parts of; plates, rods, angles etc. of
7308 4.60 1 568
iron
In terms of percentage, machinery and transport
equipment in 2009 accounted for 50.5% of Czech Parts of typewriters, computers etc., automatic
8473 3.72 1 268
data processing
exports to Latvia; chemicals and related products
represented 11.9%, miscellaneous manufactured Glass fibres (incl. wool) and articles thereof 1 114
7019 3.27
(yarns, fabrics)
articles, classified chiefly by material 10.8%,
different industrial products (8.1%), raw material 4418 Builders joinery & carpentry of wood 3.12 1 065
(8.0%). Other commodities, such as food, Semi-finished products of iron or non-alloy
7207 3.10 1 059
beverages and crude materials, had smaller steel
shares (see Table 2). In the opposite direction, i.e. Cigars, cheroots, cigarillos & cigarette of
2402 2.23 761
in Latvian exports to the CR, the dominant items tobacco/tobacco substitutes
in 2009 were bars and rods of iron (9.77%), Others 47.90 16 334
electrical apparatuses for telephony (8.41 %), Total 100.00 34 105
products of the woodworking industry and
Source: Ministry of Industry and Trade of the CR, *preliminary data
related sectors, iron and metal products (tubes,
ingots, rods, profiles), food and tobacco products (see Table 3). officials of the Czech diplomatic mission and
The fact that, even in the difficult period of economic slowdown, the CzechTrade office in Riga. They concern
interest in co-operation is not fading, is attested, among other things, different areas of business – from trade to
by the strong participation of representatives of smaller and me- manufacturing or subcontractor co-operation
dium-sized companies in the seminar organised in Riga by the and services, including transport and tourism.
Investment and Development Agency of Latvia (LIAA) devoted to
commercial and entrepreneurial opportunities in the Czech Repub- Marta Stolařová
lic. Evidence of the unwaning interest of companies in both countries Head of Commercial and Economic Department
is the frequent enquiries and requests for contacts as to specific Embassy of the Czech Republic in Latvia
possibilities of involvement in different branches, handled by www.mzv.cz/riga
C z e c h R e p u b l i c – Yo u r Tr a d e Pa r t n e r 19