ČMZRB supports the expansion of Czech companies to developing markets

Záruka ZRS UB
developing markets

More than eighty per cent of Czech exports go to the European Union. This share does not change in time even though there is a growing number of Czech companies, which are able to export their often unique and hi-tech production beyond the EU territory. The final destination is not only developed markets, but increasingly also emerging and developing markets.

A new trend emerged in last few years: Czech companies not only export their production to less developed markets, they also increasingly seek opportunities for long-term presence and investment in less developed countries. Surprisingly, small and medium-sized enterprises joined this trend beside large established companies. However, for smaller businesses it is much more difficult to enter new markets due to high costs. The Ministry of Foreign Affairs has introduced two programs with the aim to help companies to overcome these entry barriers. These two programs are complementary as they focus on different phases of the project cycle.

B2B program is administered by the Czech Development Agency. It is a grant program designed to help Czech companies to enter new markets in less developed countries. Grant covers up to 50% of project costs (CZK 500.000 at maximum) related to conducting a feasibility study or preparing a business plan. Using this grant, companies should be able to explore and assess business opportunities on the local market. Second part of the B2B program supports the realization of the project, meaning the first steps of a company to establish itself firmly on the local market. Projects can last up to two years and B2B grant covers up to 40% of the project costs (CZK 2 million at maximum). B2B program is limited to countries covered by the Map of global opportunities, which is published by the Ministry of Foreign Affairs and updated annually.

If the company succeeds to establish itself on the local market and wishes to expand its activities, it can use INTERNATIONAL DEVELOPMENT COOPERATION GUARANTEE (ZÁRUKA ZRS) program administered by the Czech-Moravian Guarantee and Development Bank. Basic premise of this program is that if the company is successful, it can develop further using standard commercial financing. ČMZRB offers a bank guarantee, which covers half of the risk of the project – thus making the financing more accessible. This guarantee program is designed for all developing countries according to OECD criteria.

Both programs represent a clear win-win situation for all. Czech companies save expenses connected with exploring new markets and establishing on these new markets. The Czech Republic triggers private investments to complement the public financing, which increases the impact of such financing and fosters faster economic growth. Moreover, recipient countries gain a clear added value in new jobs, technology transfer, know-how, increased productivity in agriculture, energetic self-reliance based on renewable sources, or sustainability with relation to environment or climate change mitigation/adaptation.

Call for submitting applications to B2B program is opened annually in autumn. Deadline for applications in the current call expires on December 4. More details can be found here. Applications to ZÁRUKA ZRS program can be submitted continuously via the bank´s website (application “e-podatelna”). More details about the program can be found here. However, we strongly recommend to consult your project proposals before submitting your application by sending an email to [email protected].

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