Overseas Investment Property in the Czech Republic

by : Boson

Overseas Investment Property in the Czech Republic is well worth considering, the Czech republic is one of the most advanced of the Central and Eastern European (CEE) economies. It became a full member of the EU in May 2004 and was the first CEE country to be admitted to the Organisation for Economic Cooperation and Development (OECD). This organisation has only 30 members worldwide who all commit to democratic principles and market economies. It is a member of NATO; it is fully integrated into both the World Trade Organisation and the European Bank of Reconstruction and Development (EBRD).

In a June 2006 survey, Ernst and Young ranked the Czech Republic as the 7th most attractive country in the world for investment and no.1 in Europe for automobile industry investments. The leading investment credit rating agency, Standard and Poor, rank the Czech Republic second only to Slovenia among CEE countries.

Validus Invest believe the Czech Republic has an excellent political and economic climate for property investment. Even thought this has been recognised for a few years now, the Czech Republic is still a transitional economy and property is currently, surprisingly affordable and accessible. The Czech mortgage market is mature enough to handle foreign buy-to-let investors, with interest rates currently significantly lower than in the UK.

If you are thinking of overseas investment property you will be happy in knowing that the government of the Czech Republic operate a non-discrimination policy, which gives foreign investors the same protection when buying and owning property as enjoyed by Czech citizens. There are also treaties in place to prevent double taxation with all EU states, the USA, Canada, Australia and many other countries.

The Ministry of Finance reported that the impact on the country since joining the EU has been characterised by an acceleration of economic growth, a reduction in unemployment and increased foreign direct investment (FDI). In fact, the Czech Republic has been one of the most successful CEE countries in attracting FDI.

GDP grew by 4.2% in the year of EU accession (2004) which was a 1.5% improvement on the average of 2.6% in the three preceding years. 2006 GDP growth figures are running at 6%. Unemployment is below the EU average at 10%.

On joining the EU, the Czech Republic gained preferential access to the EU's huge market and became a net recipient of the EU budget receiving 230 € million in 2004. The Czech Republic still benefits from a positive cash injection from the EU budget and received 202 € million in 2006. These cash injections are major attractions to joining the EU for accession countries, which allows them to catch up with their richer EU neighbours such as Britain and France. `When economies grow, property markets generally follow.

There is still huge potential for the property investor in the Czech Republic; it is not too late, but it is no longer un-chartered territory. Validus believes that the Czech Republic is a very suitable destination for the medium-risk investor.