Business | Investment
Czech leader urges UAE investors to buy iconic assets in Prague
UAE investors have been urged to pump into Czech economy, which has successfully transformed itself into a free market economy from a government-controlled socialist model.
- By Nadia Saleem, Staff Reporter
- Published: 00:34 March 25, 2008
- Hanak signs an agreement as Al Ghurair, Shaikha Lubna Al Qasimi, Minister of Foreign Trade, and Topolanek look on.
- Image Credit: Karl Jeffs/Gulf News
Dubai: UAE investors have been urged to pump into Czech economy, which has successfully transformed itself into a free market economy from a government-controlled socialist model.
"We intend to pull in UAE investors to the vast potential of investment in the Czech Republic," Prime Minister Mirek Topolanek told Gulf News on Monday.
"The country has a lot of iconic properties up for sale and it's really the last opportunity for the private investors to buy prestigious assets, for example, the Prague Airport, the national airline CSA Czech Airlines and the Opera House," he said.
"We are not doing this for money but for better business," the Prime Minister declared.
"Companies in the Middle East or Far East have a great scope of investment because from Prague, one can operate a wider area of Europe or even further," he said.
Czech Republic offers conservative, long-term, guaranteed revenues and invites investors looking for good value for their money, according to Topolanek.
"The Czech Republic is very much interested in strengthening bilateral relations with Dubai which happens to be our biggest trading partner in the region with $590 million turnover," Topolanek told Dubai's business community yesterday.
The Dubai Chamber of Commerce and Industry and the Confederation of Industry of the Czech Republic yesterday signed an agreement to extend cooperation between them.
Abdul Rahman Saif Al Ghurair, vice-chairman of the Dubai Chamber, and Jaroslav Hanak, vice-president of the Confederation of Industry of the Czech Republic signed the agreement, witnessed by Topolanek.
The agreement aims to strengthen business ties. Under the agreement both parties will cooperate in the fields of industrial relations, trade and services and setting up of joint ventures as well as equity investment.
Topolanek said that his country was recently ranked the best transforming economies out of the 120 assessed countries in the world and that this sixth most economically powerful country offers lower taxes, less red tape and full governmental support to all the investors.
"Previously, the entire economy of Czech Republic was state owned, and now the vast majority has been completely privatised," Topolanek told Gulf News.
"There are immense prospects for Arab investors, especially in terms of property and property development. We are selling government-owned assets, various institutions," he said.
Incentives are available for all investors, domestic and abroad, informed the Prime Minister.
"We want to move incentives in the direction of higher added value investments and research development and innovation related business," he added.
"We were able to push through a very significant tax reform," said Topolanek, speaking of the major changes in Czech economy.
From January 1, there will be a flat tax of 19 per cent, which will combine personal income tax and corporate tax. Consumption tax will only be applied to alcohol, cigarette, fuel and lubricants, while value added tax (VAT) is currently at 19 per cent.
"One of our major undertakings was to stop the deficit being created in the public finances," Topolanek said.
He also mention the planning of reforms in the pension system as Czech Republic, like the rest of Europe, is facing the problem of aging population. "We are making major changes in social areas. Social welfare will be made more motivating."
"The principal success we have achieved is that we have cut a lot of red tape when it comes to business and introducing digitalisation into public administration to make things much easier," he said.
The Prime Minister said the GDP growth of 6.6 per cent last year, should be seen within the context of the following.
Unemployment reduced to 4.7 per cent and there is a strong surplus in Czech trading balance.
"In terms of inflation, although there were some pressures exerted due to energy and foodstuff prices, we were able to keep the inflation under five per cent," he said.
Imports: Equipment in demand
The top five items of Dubai's Imports from the Czech Republic in 2006 included articles of stone, plaster, cement, asbestos, mica, ceramic products, glass and glassware, machinery, electrical and electronics equipment, chemical or allied industries, vegetable products and miscellaneous manufactured articles.
The top five items of Dubai's exports and re-exports to the Czech Republic were machinery, electrical and electronic equipment, chemical or allied industries, textiles and textile items, articles of stone, plaster, cement, asbestos, mica, ceramic products, glass and glassware, and miscellaneous manufactured articles.
Dubai's non-oil trade with the country reached Dh1.9 billion at the end of 2006 with imports touching Dh1.8 billion and export-re-export reaching Dh80.3 million.
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