Political System and Foreign Relations

The Czech Republic is a parliamentary democracy with separate legislative, executive and judicial powers. The parliament has two chambers (Chamber of Deputies and Senate). The president is elected by the people for a five-year term. Milos Zeman was inaugurated as the president of the Czech Republic for the first time on 8 March, 2013 and again for his second term on 8 March 2018. The Prime Minister is appointed by the President, based on parliamentary election results. As the Czech Republic is a parliamentary democracy, the bulk of political power lies with the Prime Minister.

Legal Information

Czech legal system is in line with the EU requirements. Due to the accession of the Czech Republic to the European Union the Czech legal system has been going through a continuous process of harmonisation with the EU legal environment and is expected to keep developing in line with the EU requirements. For business purposes there are two main Codes, which should be taken into account when doing business in the Czech Republic. The Commercial Code and the Trade Act govern forms of business entities, rights and obligations of persons carrying out business activities, commercial commitments, and other relationships related to domestic as well as foreign trade activities.

International Treaties

As a member of the European Union, the Czech Republic is bound by the laws of the EU with regard to trade, finance and employment. The Czech Republic is also a member of the OECD. Further the country is integrated in the WTO and the IMF. To ensure protection of foreign investments in the country, the Czech Republic is also a party to the Multilateral Investment Guarantee Agency (MIGA).

As a signatory to the General Copyright Treaty, the country is obliged to protect the copyright, patents and trademarks of businesses and individuals.

Basic data 2021

The Czech Republic is a democratic country situated in the heart of Europe. 

  • Area (km²): 78,865
  • Population: 10.7 million
  • Capital: Prague
  • Official Language: Czech
  • Official Currency: CZK (Czech koruna)
  • Government: Parliamentary democracy
  • Neighbours: Germany, Austria, Slovakia, Poland
  • Member of: OECD, EU, WTO, NATO, IMF, Schengen area
  • Labour force: 60.5 %
  • GDP growth rate: -2,1 % GDP (2021)
  • GDP per CAPITA PPP: EUR 36,551
  • Annual inflation rate: 2.8 % (2021)
  • Unemployment rate: 3.3 % (2021)
  • Interest rates (2021):
    • 2W Repo Rate: 0.25 %
    • Discount Rate: 0.05 %
    • Lombard Rate: 1.00 %
  • Average monthly salary (2021): EUR 1,411; USD 1,708 
  • Export destinations:
    • Germany: 33 %
    • Slovakia: 7.6 %
    • Poland: 6.2 %
  • Main foreign Exchange rate:
    • EUR - CZK 25.9
    • USD - CZK 21.3
    • GBP - CZK 29.7 

Summary of the Czech Republic’s Key Competitive Advantages

Location in the centre of Europe, a gateway to both Eastern and Western markets, less than two hours by air from most European destinations

Creative, experienced and internationalised professionals at lower costs

High degree of entrepreneurship and good conditions for doing business (above average within EU27)

Regulatory and patent environment in accordance with the EU standards

One of the world’s most attractive places to live

GDP per person by purchasing power parity - the highest in the CEE region

Well-developed infrastructure

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Technology transfer and applied research

It is a fact that modern economies and their success are based on the competitiveness of industry and industrial research. The Czech Republic has always had a strong industrial tradition and a substantial innovation potential. Apart from strong capacities in basic research, at least the same attention ought to be paid to successful transfer of technologies from research institutions to the market. Current projects indicate a favorable trend in the area of cooperation between universities, research institutes and companies leading to innovations. This cooperation is a prerequisite for a prosperous industrial economy and it improves awareness of the top-quality Czech technologies abroad.

The Association for Foreign Investment coordinates a project called the Best Cooperation of the Year, within which it recognises the best cooperative projects conducted by companies and the research sphere. The goal is to raise awareness of the Czech R&D environment and expand the existing or attract new investments with a higher value added in the sector. The projects aims to highlight the benefits of foreign investments in R&D with presenting concrete examples and to support the effective use of Czech innovation potential together with marketing promotion of the achieved results of the Czech research capacities both in the Czech Republic and abroad.

We constantly strive to raise awareness of successful examples of the practical application of scientific findings in the business realm and to encourage such cooperation in the future. Cooperating entities are inclined to build on successful projects and to benefit from long-term synergistic effects of mutual cooperation.

The symbiosis of ideas coming from basic research with applied research which is based on contact with industry and awareness of the market needs leads to success. The automotive industry may serve as a good example. Not only it developed a network of production facilities, it also expanded its know-how through activities of the research departments of manufacturers and independent branches of research and engineering service companies. This makes the sector a highly successful one. The government systematically improves the environment and framework facilitating interaction between private and research sector.

Examples of participating projects                                       

Masaryk Univerzity / Faculty of Science / Department of Physical Electronics - TONAK a.s.

  • Development of economical and ecological technology to improve feltiness of rabit fibres

CTU in Prague / Faculty of Mechanical engineering/ResearchCenter of Manufacturing Technology - TOS Varnsdorf

  • Mechatronic concept of horizontal machines

Brno University of Technology / Institute of Molecular Genetics of the ASCR, v. v. i. - TESCAN, a.s.

  • Multimode holografic microskope


  • Kinetic threaded mechanism

Brno University of Technology - AtomTrace, s.r.o., Tescan Brno, s.r.o.

  • Development of Sci-Trace machine for protozoon analyses of materials by spectometry techinque with induced microplasm laser

Pardubice Univerzity / Faculty of Chemical Technology - PARDAM s.r.o.

  • A way of production of submicron crystalline and amorphous silicon dioxide fibres and submicron crystalline and amorphous silicon dioxide fibres produced this way
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