The outflow of dividends abroad slowed down last year

Last year, foreign owners of Czech companies distributed CZK 179.8 billion in dividends from their profits in the Czech Republic. This is 14.3 percent lower than the previous year and the weakest since 2007, according to UniCredit Bank analyst Jiří Pour, who cited preliminary data from the Czech National Bank on Monday.

In 2020, companies sent CZK 210 billion to foreign owners, compared with a record high of CZK 353 billion in the pre-election year of 2019.

The Czech Republic is among the most profitable countries

Foreign investors in the Czech Republic earned CZK 330.7 billion in foreign direct investment last year, a 1.4 percent decrease year on year. While foreign-owned companies reinvested an average of 25% of profits in 2019 and 37% the previous year, the figure last year was CZK 151 billion, or 46%.

According to the available data for 2020, despite the decline in profitability, the Czech Republic shared the second most prosperous country in Europe with Poland and Romania (behind Lithuania with a return of 7.6%).

However, as Pour further pointed out, the yield was noticeably lower than 2010 to 2018, when it was stable at around 10 percent. In comparison, foreign investors earned 5.5 percent in Slovakia, 3.1 percent in Hungary, and only 2 percent in Germany in 2020 from direct investment.

In 2020, the dividend yield on foreign direct investment, i.e., what investors paid themselves abroad after deducting reinvested profits, was 4.4 percent in the case of the Czech Republic. Again, this was one of the highest values in Europe. Poland had a rate of 3.8%, Slovakia had a rate of 3.6%, Hungary had a rate of 1.6%, and Germany had a rate of 1.8%.