The Czech Republic is a Central European country, a member of the European Union since 2004. The Czech Republic is a developed high-income economy, one of the most stable and prosperous of the former Eastern Bloc countries.
Main industries of the Czech Republic are production of motor vehicles, metallurgy, machinery and equipment, glass, armaments. Germany is the largest trading partner of the Czech Republic for both export and import.
The banking sector of the Czech Republic is characterized by relatively high concentration and a prominent share of foreign capital.
1 EUR = 25.596 CZK (2017-12-12)
During the last 11 years EURCZK exchange rate was within the range 23.893 - 28.718, reaching its maximum in Jun 2007 and falling to its minimum in Jun 2008.
Chart 1. Euro to Czech koruna (EURCZK). Source: ECB.
|Nominal GDP (2016)||Nominal GDP per Capita (2016)||Real GDP Growth (2016)|
|174.4 bln EUR (+0.04%)||16 500 EUR (+0.04%)||2.4 % (2015: 4.5 %)|
According to Eurostat, nominal GDP of Czech Republic in 2016 was 174.4 bln EUR.
Czech Republic outperforms the European Union in terms of real GDP growth with the average annual differential coming to 0.6% over the past 10 years (2006 - 2016). In 2016 real GDP growth was 2.4% which was above the Euro Area average (1.8%) and above the European Union average (1.9%). Real GDP growth in 2017 - 2022 are IMF's estimates.
Chart 2. Real GDP Growth in Czech Republic. Source: Eurostat, International Monetary Fund.
In 2016, nominal GDP per capita in Czech Republic was 16 500 EUR.
Czech Republic has a below-average level of wealth in terms of per-capita GDP at purchasing power parity (PPP); this economic welfare indicator has, on average, fell behind that of the European Union by -12.4% over the past 10 years (2006 - 2016). GDP per capita at PPP in 2017 - 2022 are IMF's estimates.
Chart 3. GDP Per Capita at Purchasing Power Parity in Czech Republic; European Union = 100.
|CPI, MoM (Sep 2017)||CPI, YoY (Sep 2017)||CPI, Year Average (2016)|
|-0.1 % (Aug 2017: -0.2 %)||2.5 % (Aug 2017: 2.4 %)||0.6 % (2015: 0.3 %)|
According to Eurostat, inflation rate in Czech Republic in 2016 expressed as annual percentages of average consumer prices was 0.6% which was above the Euro Area average (0.2%) and above the European Union average (0.3%). Inflation rates in 2017 - 2022 are IMF's estimates.
Chart 4. Inflation Rate in Czech Republic. Source: Eurostat, International Monetary Fund.
|Unemployment Rate (2016)|
|4.0 % (2015: 5.1 %)|
|Government Bond Yield (Sep 2017)|
|0.97 % (Aug 2017: 0.83 %)|
Chart 5. Government bond yield of Czech Republic. Source: Eurostat.
|A+ (high credit quality), outlook stable||A1 (upper medium grade), outlook stable|
Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.
Czech Republic signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 1 January 2013 the date of coming into force is given in brackets):
There are also several agreements between Czech Republic and other jurisdictions which were signed but haven't yet come into force (for agreements signed after after 1 January 2013 of signing the agreement is given in brackets):
There are 3 ways for jusrisdictions to exchange information on tax matters:
Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.
Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.
Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.
Czech Republic signed TIEAs which already came info force with the following jurisdictions (for agreements which came into force after 1 January 2013 the date of coming into force is given in brackets):
There are also several agreements between Czech Republic and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 1 January 2013 of signing the agreement is given in brackets):
Czech Republic signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.
the Czech Republic has signed bilateral agreements with 57 jurisdictions to automatically receive information:
the Czech Republic has signed bilateral agreements with 68 jurisdictions to automatically send information:
Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).
|FATCA Status in the Czech Republic|
|IGA in effect since 04 August 2014, Model 1|
Czech Republic has FATCA agreement with the U.S. in effect since 04 August 2014 (Intergovernmental Agreement Model 1). Financial institutions operating in Czech Republic are required to identify U.S. taxpayers by January 1, 2017 and to report the information for 2017 and the subsequent years. The agreement is reciprocal: Czech financial accounts hold in U.S. financial institutions will be reported to Czech authorities.
|Financial Market Development|
|4.8 (max 7.0), 23rd out of 138 countries|
|6.0 (max 7.0), 12th out of 138 countries|
According to World Economic Forum's Global Competitiveness Report 2017-2018, financial market development in Czech Republic is scored 4.8 out of maximum 7.0 and ranked 23rd out of 138 analysed economies, trustworthiness and confidence of financial market is scored 5.3 (16th place).
Chart 6. Financial Market Development in Czech Republic. Source: WEF.
Soundness of banks is scored 6.0 bringing Czech Republic into the 12th place.
Chart 7. Soundness of Banks in Czech Republic. Source: WEF.
|Maximum Protected Amount|
|100 000 EUR|
Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.
From a depositor's point of view it is important to know:
All these details about deposit guarantee scheme in Czech Republic are summarised in Table 1.
|Scheme Participants||all credit institutions operating in Czech Republic, branches of Czech banks abroad|
|Scheme Exemptions||branches of foreign banks (covered by their home countries)|
|Eligible Depositors||natural persons, legal entities|
|Covered Accounts||current accounts, savings accounts, term accounts, deposit accounts, saving books|
|Covered Currencies||all (Czech crowns and foreign currencies)|
|Maximum Protected Amount||100 000 EUR|
|Paid In Currency||CZK|
Table 1. Deposit guarantee scheme in Czech Republic.
Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.
|Local Currency (Czech koruna)||Foreign Currency|
|Aa2 (high grade)||A1 (upper medium grade)|
Local currency (Czech koruna) deposit ceiling for Czech Republic is set to Aa2 (high grade), foreign currency deposit ceiling is A1 (upper medium grade).
|Average Deposit Rate (Aug 2017, CZK)|
|0.23 % (Jul 2017: 0.33 %)|
Chart 8. Deposit Rates in Czech Republic. Source: ECB.
|Number of Banks|
|Consolidated Assets (2016)|
|222.52 bln EUR (+11.68%)|
|Recent Changes (2016)|
|new banks: 1, closed banks: 1|
Currently there are 58 credit institutions operating in Czech Republic.
In 2016 consolidated banking assets in the Czech Republic were 222.52 bln EUR. The consolidated banking assets' evolution is shown at Chart 9 below.
Chart 9. Consolidated banking assets in Czech Republic.
Recent structural changes (2013 - 2016) of the banking sector of Czech Republic are summarised in Table 2.
|Number of Opened Banks||1||1||2||1|
|Number of Closed Banks||1||1||1||1|
Table 2. Recent structural changes in the banking sector of Czech Republic.
The list of the most recently opened banks in Czech Republic is provided in Table 3.
|PKO BP S.A., Czech Branch (new)||December 2016|
|Bank of China (Hungary) Close Ltd. Prague branch, odštěpný závod (new)||August 2015|
|BNP Paribas Personal Finance SA, odštěpný závod (new)||February 2015|
|Sumitomo Mitsui Banking Corporation Europe Limited, Prague Branch (new)||April 2014|
|Western Union International Bank GmbH, organizační složka (new)||April 2013|
Table 3. The most recently opened banks in Czech Republic.
All the credit institutions operating in Czech Republic can be classified into several categories. Table 4 summarises the number of banks in each category.
|Category||Number of Banks|
|Branches of foreign banks||23|
|Savings and loan associations||1|
There are 23 branches of foreign banks from 11 different countries in Czech Republic. Table 5 shows 10 countries having the biggest number of branches in Czech Republic.
|Country of Origin||Number of Branches|
|1||Česká spořitelna, a. s.|
|2||Československá obchodní banka, a. s.|
|3||Komerční banka, a. s.|