Shimano Czech Republic s.r.o, plans to expand production after winning a CZK 46 million investment incentive from the government.
The bicycle components manufacturer will invest CZK 185 million in its factory, adding twenty new jobs in the Moravian-Silesian Region.
The investment incentive is the first to be approved after a change in legislation last year. According to the amendment, the Cabinet must approve all investment incentives, not just large strategic projects.
The government said it approved tax relief for Shimano to maintain jobs due to the high unemployment rate in the region.
The company will create two dozen new jobs in Karviná.
The Moravian-Silesian Region has the country’s highest unemployment rate.
Shimano’s investment should bring about CZK 97 million to the state budget over the next ten years. The company wants to use the income tax rebate in the first five years.
The expansion of production will help increase deliveries by 11 percent, according to Shimano. The company made 45 percent of its sales to Czech firms in 2019—about 37 percent from small and medium-sized businesses.
The government must decide on the proposal for an investment incentive within three months of its submission. The changes to the law are aimed at bolstering the country’s international competitiveness.
The Ministry of Industry and Trade expects a decrease in the number of applications for investment incentives. Through the Chamber of Commerce, companies demanded the state grant investment incentives only in exceptional cases. Mainly for investments with extraordinary added value.