Foreign companies discouraged by excessive bureaucracy

24-10-2014

Foreign companies interested in building or leasing warehouses, logistic parks, and production and assembly halls in the Czech Republic are discouraged by excessive bureaucracy, suggests a new study carried out by CEEC Research and KPMG Czech Republic.

Photo: Filip JandourekPhoto: Filip Jandourek According to Czech industrial developers, foreign investors are put off mainly by excessive bureaucracy and an extensive construction approval process. They are also complaining about insufficient infrastructure.

Tomáš Míček, a major owner of Czech logistics parks, says current laws and regulations are the main obstacle in further business development. He also warns that conditions for potential investors may be further complicated by proposed changes to laws regulating approval processes. According to Míček, the government should deal with the issue as one of its short-term priorities.

Jakub Sklenařík, head of the Reflecta Development firm, also speaks of a “totally unstable environment”, caused by frequent changes of policymakers and directors of state-run companies. Among other barriers to industrial development in the Czech Republic are frequent changes in the legislative and tax system.

The key factors affecting decisions of potential investors are location of the real estate, sufficient number of qualified employees and good accessibility. Many regions in the Czech Republic, however, are still lacking sufficient transport infrastructure. A report of the Supreme Audit Office carried out last year showed that the entire transport infrastructure should be completed in 32 years.

The Czech Republic’s main competitors in attracting new developers, interested in leasing warehouses, logistic parks, and production and assembly halls, are Poland, Slovakia and Hungary.

According to the CCEC Research and KMPG study, there were 4.77 million square metres of industrial and warehouses space of the highest category available for lease in the country at the end of September. The space area has increased by 271,200 square metres this year compared to the previous year.

24-10-2014