How We Helped an Auto Supplier to Secure a CZK 2.6 billion Investment Incentive
Investment incentives are far more than a paperwork exercise. They are complex, multi-year projects where every detail counts — from structuring the project correctly at the outset to precisely calculating eligible costs. It was on exactly this kind of project that MIDA Consulting partnered with special client.
A Project That Made History
In early 2026, a decision to grant an investment incentive to automotive client was issued, to an investment project worth over CZK 2.6 billion, supporting the expansion of battery box production for electric vehicles at the industrial zone near Žatec.
The project received media coverage as a significant expansion in the field of electromobility, with a positive impact on the economically challenged Ústí nad Labem Region. According to projections, the total benefit to public finances will exceed CZK 2.3 billion — more than the cost of the incentive itself. The MIDA Consulting team led the preparation of this project. Although the government did not designate it as strategic, the project ultimately secured support in the form of a tax relief.
What the Investment Incentive Entails
An investment incentive is not a one-off transaction. It is a long-term commitment with precisely defined rights and obligations. For manufacturing industry projects these typically include:
- a corporate income tax relief for ten tax periods,
- an obligation to invest in new machinery and other qualifying assets as required by law,
- meeting higher value-added criteria — covering both average wage levels and research and development activities,
- retaining the investment for at least five years after project completion,
- keeping project activities environmentally friendly
- ongoing compliance with administrative and reporting obligations to the relevant Ministry.
The legislation, however, contains numerous technical nuances, and mishandling any of them can result in reduced support, loss of entitlement to the tax relief, or difficulties during an audit.
Why the Details Matter
Every project is unique. Expansion projects — where a company broadens its existing product line with new products — are governed by specific rules that differ from a standard greenfield investment. Correctly classifying the project under the relevant legal framework, structuring the new facility, defining eligible costs, and calculating the maximum permissible support are all critical steps that must be executed correctly. This is true not only for the application itself and its supporting documentation, but also for the entire subsequent implementation phase.
Similarly, the level of support is not given automatically — the actual tax relief claimed depends on eligible costs as they are actually incurred and must always remain within the legally prescribed aid intensity. That is precisely why having a knowledgeable partner at your side makes all the difference: one who is fully qualified in this field and does not step away once the application has been filed but stays with you throughout the entire project lifecycle.
Investment Incentives as a Strategic Tool
Investment incentives are among the most important instruments available for supporting industrial investment in the Czech Republic. For companies that meet the legal eligibility requirements, they can significantly strengthen the financial case for a project. At the same time, this is a domain where professional preparation is genuinely indispensable. The Investment Incentives Act and the associated regulations constitute a complex body of rules whose correct application demands expertise in both law and economics.
We Can Help You, Too
MIDA Consulting specializes in investment incentives and public support for manufacturing companies and technology centers. If you are planning an investment in the Czech Republic and would like to know whether your project may qualify for an incentive, we would be glad to discuss your situation.
