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The Czech Republic Shifts Gears in Defense and Manufacturing: A Buzz Interview with Jan Kohout of PRK Partners

The Czech Republic Shifts Gears in Defense and Manufacturing: A Buzz Interview with Jan Kohout of PRK Partners

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The Czech Republic is marked by dynamic changes in the banking, finance, and technology sectors underpinned by the influence of ESG, compliance issues, and the impacts of global crises, according to PRK Partners Partner Jan Kohout, with the defense sector and strategic shifts in traditional industries making headlines as well.

"The landscape is significantly influenced by ESG and compliance issues," Kohout begins. "Recent crises – including the Russian aggression in Ukraine, terrorist attacks in Israel, and the Red Sea crisis – have accelerated shifts directly affecting industries like defense, which traditionally struggled to secure financing in the Czech market. This is changing thanks to domestic and European strategies and the readiness of local banks, usually subsidiaries of Italian, Belgian, or Austrian banking groups, to support the financing of these businesses," he explains.

As for the Czech Republic's defense sector, Kohout reports that "there's been notable movement, such as the consolidation of ownership in a major ammunition player, transitioning from a foreign to a Czech group." According to him, this reflects broader changes and the increasing importance of defense in national and European economic strategies.

Moving on, Kohout notes that "the AI Act discussions within Europe are pivotal," as the region pushes forward with technological development. "These discussions highlight a tug-of-war between professionals and the industry at large regarding market impacts and the availability of new tools, as we are increasingly seeing that technology will continue to be a significant driver of change," he says.

Speaking about local legislative changes, Kohout highlights some that are of particular importance for the banking and finance sector. "Legislation often mirrors EU initiatives," he goes on to say. "For instance, the act on non-performing loans reflects EU directives. We're also looking at class actions and ongoing discussion whether or not this new approach in litigation – if passed into law – could benefit the Czech judicial system."

Looking at the bigger picture, Kohout reports that the Czech economy, which is closely tied to Germany, "faces potential impacts from Germany's economic struggles. A significant issue for our manufacturers is the rising cost of energy, pushing some to consider relocating production to more cost-effective locations like the US."

Finally, he highlights that "industries like machinery and automotive are seeing a surge in takeovers and acquisitions – this is often driven by the need for traditional manufacturers to restructure and refocus on electric vehicles and related infrastructure." Interestingly, Kohout points out in conclusion, there is also a "notable trend of new investments from China, indicating a shift in supply chains and global manufacturing strategies."

Czech Republic Knowledge Partner

PRK Partners, one of the leading Central European law firms, has been helping clients achieve their business objectives almost 30 years. Our team of lawyers, based in our Prague, Ostrava, and Bratislava offices, has a unique knowledge of Czech and Slovak law and of the business environment. Our lawyers studied at top law schools in the United States, United Kingdom, Switzerland and elsewhere. They also have experience working for leading international and domestic law firms in a number of jurisdictions. We speak your language, too. Our legal team is fluent in more than 15 languages, including all the key languages of the region.

PRK Partners has one of the most experienced legal teams on the market. We are consistently rated as one of the leading law firms in the region. We have received many significant honours and awards for our work. We represent the interests of international clients operating in the Czech Republic in an efficient way, combining local knowledge with an understanding of their global requirements in a business-friendly approach. We are one of the largest law firms in the Czech Republic and Slovakia. Our specialised teams of lawyers and tax advisors advise major global corporations as well as local companies. We provide comprehensive legal advice drawing on our profound knowledge of local law and markets.

Our legal advice delivers tangible results – as proven by our strong track record. We are the only Czech member firm of Lex Mundi, the world's leading network of independent law firms. As one of the leading law firms in the region, we have received many national and international awards, in some cases several years in a row. Honours include the Chambers Europe Award for Excellence, The Lawyer and Czech and Slovak Law Firm of the Year. Thanks to our close cooperation with leading international law firms and strong local players, we can serve clients in multiple jurisdictions around the globe. Our strong network means that we can meet your needs, wherever you do business.

PRK Partners has been repeatedly voted among the most socially responsible firms in the category of small and mid-sized firms and was awarded the bronze certificate at the annual TOP Responsible Firm of the Year Awards.

Our work is not only “business”: we have participated on a longstanding basis in a wide variety of pro bono projects and supported our partners from the non-profit sector (Kaplicky Centre Endowment Fund, Tereza Maxová Foundation, Czech Donors Forum, etc.).

Firm's website: www.prkpartners.com

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