IfInsurance of Credit for the Financing of Investment in Foreign Countries

The credit for financing investment abroad is the credit provided by the bank for acquisition of long-term tangible, intangible or financial property for a foreign company controlled by the Czech investor or for acquisition of a foreign company by the Czech investor or for financing a foreign company's operation.

Only the credit with the term longer than 3 years from the first drawing to final due date may be insured. The condition of insurance is also the partial financing the investment from the own financial sources of investor. Its amount will be set by the agreement between EGAP, bank and investor (usually at least 25 %).

The bank is insured hereby against the risk of failure to pay back the credit provided to a Czech investor or its foreign subsidiary.

The subject of insurance are the claims of the insured (investor's bank) towards the debtor for the payment of credit principal for investments, interests and other fees as per credit contract.

The insured event is a partial or complete non-payment of the insured credit due to commercial or territorial reasons or their combination. Territorial reasons are: impossibility of conversion and/or transfer of revenues, expropriation, violent politic acts and violating contractual obligations by the host state. Commercial reasons are: debtors´ incapacity to pay its due obligations (financial insolvency) or rejection to pay an insured claim by the debtor without legal reason (unwillingness to pay).

The premium amount depends on the volume and term of credit for investments, scope of insured territorial and commercial risks associated with the foreign investment, evaluation of character and risk rating of investor and deductible amount.

The preliminary premium calculation is available through interactive calculator.

• the share of own investor's resources for financing the investment abroad is minimally 20 % of the investment value, for investments with elements of financing projects minimally 25 %
• investor's guarantee in the scope approved by EGAP for the obligations of foreign company being the subject of investment, if this foreign company is the debtor
• investor's investment will be insured by EGAP insurance of „I“ type
• investments (shares or investor's interest in the foreign company) will be pledged to the benefit of insured bank; depending on legal possibilities, also the property of foreign company being the investment subject will be pledged
• the insurance of foreign company' property will be bonded by coding the account to the benefit of insured bank
• the purposefulness of drawing the credit will be checked at cost of the foreign company being the subject of investment, or of investor by an independent inspection company determined by the insured bank in the agreed scope (except for the credit for acquiring the share in foreign company)
• for the term credit repayment, the payment of share in profit, important changes in property and obligations and change of owners of investor and foreign company being the subject of investment will be subject to approval by insured bank
• trouble-free credit history1 of Subjects2 participating in investment
• evaluation of investment influence on the life and social environment in the target country and non-applying international sanctions
• investor's claims towards the foreign company being the subject of investment, following from the expended investment,will be subject to credit for investment or pledged to the benefit of insured bank
• The subject2 has existed and executed the activity being the subject of investment, minimally for 2 years before submitting the application for insurance of credit for investments abroad or its activity follows up his legal predecessor's activity, carried out minimally for 2 years before submitting the application for insurance of credit for investments abroad (this does not concern the foreign company if newly established by the investor).