Wednesday, 30 September 2026
The Czech Republic is gradually moving away from an economic model dominated by incoming foreign capital as domestic companies build increasingly substantial positions abroad. Continued expansion could eventually bring Czech-owned direct investments overseas much closer to the value of foreign-owned investments in the domestic economy, although a sizeable gap remains today.
Czech National Bank Vice-Governor Eva Zamrazilová believes the two sides could approach each other within roughly 10 to 15 years if Czech companies maintain their recent pace of international expansion. The scenario reflects a significant change in the role of domestic capital following decades in which foreign investment was one of the main drivers of Czech industrial development.
The latest CNB figures demonstrate both the scale of the transformation and the distance still to travel. Czech direct-investment assets abroad stood at approximately CZK 3.18 trillion at the end of June 2026, while foreign direct-investment liabilities in the Czech Republic amounted to around CZK 6.84 trillion. Czech overseas holdings have therefore grown substantially but remain less than half the value of the corresponding foreign investment position at home.
The trend is increasingly visible through acquisitions and expansion by Czech-controlled groups across international markets. Czech business media have also highlighted growing overseas activity by major domestic investors, indicating that international investment is becoming a more established part of corporate strategy rather than an exceptional move by a small number of companies.
Greater ownership of foreign businesses will not immediately eliminate another longstanding imbalance: investment income. Foreign companies established in Czechia have had decades to build profitable operations. CNB analysis indicates that these investments have historically generated strong returns, while the proportion of earnings retained for further investment in the Czech economy has declined considerably since the period before the global financial crisis. Dividend payments to international owners have consequently become a persistent feature of the country’s external accounts.
Czech investments overseas are generally at an earlier stage of development. Their income therefore cannot be expected to match the payments generated by mature foreign-owned businesses in Czechia simply because the value of investments eventually becomes similar. Building comparable earnings streams could take considerably longer than narrowing the difference between the investment stocks themselves.
At the same time, Czechia’s overall financial relationship with the rest of the world is already much closer to balance than direct-investment figures alone suggest. The country’s total foreign financial assets reached approximately CZK 11.49 trillion at the end of June, against liabilities of CZK 12.01 trillion. This left a net international investment deficit of around CZK 520 billion, equivalent to 5.9% of GDP, with the gap narrowing both quarterly and annually.
The 2026 figures require some caution. The CNB says recent changes in the country’s external position have been significantly affected by the relocation of a large Czech business group’s headquarters from abroad and by changes in asset valuations. These accounting and corporate effects mean short-term movements should not be interpreted entirely as new cross-border investment activity.
A longer-term change in Czech corporate ownership could nevertheless have wider consequences for the economy. Companies controlling more of their development, production, distribution and international sales can retain a larger share of the value created by their businesses. Defence manufacturing is among the sectors identified as having potential for this type of vertically integrated Czech-controlled expansion, while domestic banks have also become more willing to finance the industry.
For investors, the more significant development is therefore not whether Czech and foreign direct-investment positions reach an exact numerical balance in a particular year. It is the emergence of Czechia as both a major destination and an increasingly important source of cross-border capital. If that transition continues, the country’s next phase of economic development could be shaped increasingly by Czech companies owning and financing assets abroad rather than primarily by international groups deploying capital into the domestic market.
Source: CTK
