Prague - Do foreign investors find the Czech market still attractive after it has been hit by the global crash? The precise figures are not known yet but one thing is clear - for months investors have not shown much interest in investing new projects in the country.

The demand in business real estate is a reliable indicator of foreign investors' interest in entering the local market.

"As soon as the investor wants to see a real estate offer, he has a clear idea of his investment and he is almost hundred percent decided (to invest)," CzechInvest director Alexandra Rudyšarová told Aktuálně.cz.

However, at the moment the Czech Republic does not lure foreign investors as much as it used to in the past. The number of offers have steadily been on decline since last February.

"Compared to previous years we can expect a lower number of projects which will financially smaller too," said Rudyšarová.

It is generally expected future investment projects will involve services and research and development more than production.

A higher number of time-demanding projects is a general trend which has been reflected in the statistics. "Last year saw an increased number of investment projects that dealt with software development, for example," Rudyšová added.

Once a upon time

In the past the Czech Republic benefited from the global economic meltdown. Companies based in "old" EU-bloc countries preferred effective locations, which the Czech Republic certainly was.

"Nowadays a sizeable number of firms that have thought about moving over (to the Czech Republic), have already  branches established in the region. The other thing is that apart from the lower demand for final products due to the current recession, (Czech) banks are hesitant to finance new projects these days," said Rudyšarová.

But not all firms are deterred to invest in the Czech Republic. A British biotechnology company A2Z Bio has decided to enter the local market.

„Our choices came down to southern Germany and the Czech Republic. In the end we decided for the Czech Republic because we will get much higher quality here for the same price," Slava Pavlovets, director of A2Z Bio told biospace.com.

And it is exactly because of the current global economic downturn the company decided to expand in the Czech Republic.

"When our customers find out that we are based in Great Britain, they immediately assume that we are overpriced and call our competitors just to see if their assumption was right. Of course, they are looking for a more affordable solution and particularly among our clients in Central and Eastern Europe, Great Britain is an invisible yet strong barrier. From Prague we will be able to reach a much broader range of customers," Pavlovets added.

The A2Z company is a somewhat small company but it is a typical example of what the investments in the country will look like in the future. In terms of quantity their projects will not be big but rather technology oriented.