The Czech government has unveiled a draft Startup Act aimed at making the country a more attractive environment for innovative and high-growth companies.

Presented on 27 August 2026, the proposed legislation seeks to improve access to private investment, retain talent and technology in the Czech Republic and help promising companies scale internationally.

For South African investors and businesses, the initiative is worth watching as it could create new opportunities forinvestment, technology partnerships and access to European markets.

The proposed legislation would introduce a recognised startup status for innovative and scalable companies. Startups would generally need to be no more than eight years old, with up to ten years allowed for sectors with longer development cycles, such as biotechnology, medical technology, energy and defence.

Companies would also need to demonstrate genuine innovation, scalability and a connection to the Czech economy.

Certified companies would receive an "innovation passport", making it easier for them to access certain forms of support without repeatedly having to prove their innovative character.

A key element of the proposal is a new tax incentive for individual investors. Investors could potentially deduct up to CZK 5 million (approximately ZAR3.9 million) per year of qualifying investments in certified startups from their tax base. For investors subject to the 23% tax rate, this could represent a tax benefit of up to approximately CZK 1.15 million (around ZAR 890,000).

The new framework could strengthen the Czech Republic's position as a potential European launchpad for South African technology companies and investors.

The Czech Republic offers access to the EU Single Market, while its strong engineering, research and industrial base provides opportunities for technology cooperation in areas such as Energy and clean technologies, water and wastewater management, healthcare and medtech, mining and industrial technologies, cybersecurity and digital technologies, advanced manufacturing and engineering. 

The development is particularly relevant as South Africa is also working towards a more supportive policy environment for startups. The SA Startup Act Movement is advocating reforms to improve access to capital, market opportunities and international expansion.

This creates an opportunity not only for commercial cooperation, but also for greater connections between the two countries' investors, accelerators, universities, innovation agencies and technology companies.

Source: www.vlada.gov.cz

Written by CzechBusiness Cape Town