The article below will provide a quick overview of
the subject, but for more detailed information please go to
Answers to Common Questions.
Business Opportunities for You in the Czech Republic
Starting up a small or home business - or relocating an existing
company - in the Czech Republic has the three main advantages:
- Your monthly expenses can typically be only 20% of what you'd
pay in, for example, the USA, Western Europe, UK, Canada or
Australia.
- Your business will be centrally located inside the affluent,
4 million-strong European Union (EU) marketplace.
- The Czech Republic provides the modern infrastructure
your business requires, but also a slower paced lifestyle
amidst beautiful old-world surroundings that make it a wonderful
place to live and work as well.
What Are the Legal Requirements?
If you are not an EU citizen, starting a business in the Czech Republic
generally requires that you form your own SRO, (Czech limited liability
corporation), which will provide the permits and visas you need to live
and work legally in this country, as well as a comprehensive tax and
liability shelter to protect your assets although it is possible to
operate with a trade license.
Please see the
"Answers to Common Questions"
section for further clarification of this topic.
If you are an EU citizen, it pays to setup a genuine SRO to make the visa
process easier for employees and family members who may not be EU citizens,
and to provide the same essential tax and liability shelters to protect
your assets.
Regardless of your citizenship, it is extremely risky to start a business
or purchase property in this country without the protection offered by an
SRO, as it exposes you and your assets anywhere in the EU openly to both
legitimate and fraudulent lawsuits.
Common Questions About Starting a Business in the Czech Republic:
Q: Can I run a small or home-based business without an SRO?
A: Theoretically, you can apply for a business license at
the regional trade office in the city or county in which your business
will be operating.
In reality, however, the process for each business license is rife
with overt and hidden complications and additional expenses, especially
for foreigners.
Furthermore, the costs and paperwork involved are readily comparable
to simply starting your SRO, which includes one business license.
In addition, all non-EU citizens must obtain a long-term visa in
conjunction with obtaining the trade license. This is a difficult
and time-consuming process, as you probably already know, which
requires that you have special circumstances (such as a long-term
accommodation contract, proof of required funds) to qualify for
your visa.
Finally, a simple trade license does not provide any tax or liability
shelters, which are provided with your SRO, and which are essential
for foreigners wanting to do business in the Czech Republic.
In the short-term and the long-run equally, starting your own SRO is
the fastest, easiest and most affordable way to do business legally
and responsibly in the Czech Republic, while protecting your assets
back home and abroad.
Q: As a non-EU citizen, can I get a long-term visa without an SRO?
A: Yes, but it is difficult and you need a 'purpose of stay' which include
a trade license, acceptance to a Czech university, and a
job with a Czech employer licensed to hire non-EU nationals.
Even with these qualifications, the process is confusing, expensive
and time-consuming.
Also important to note, is that if you apply for your visa based
on a job with a Czech employer, (the most common way to get a visa
for non-EU citizens), then should you lose the job for any reason
you will immediately lose the visa.
In contrast, your SRO not only provides a convenient and simple
way for you to qualify for a long-term visa which is renewable
every year, but it also provides qualifications for your family
and employees to apply for their visas as well.
Q: Can I buy property in the Czech Republic for either
commercial or residential purposes without an SRO?
A: To purchase property in the Czech Republic as a
non-EU citizen, for either business and/or residential use,
you must have an SRO. The only exception is for Permanent
Residence ("green card") holders who are also married to a
Czech spouse or residents from countries who have 'favored
nation' status.
See more detailed discussion here.
EU citizens may purchase land, except for agricultural or
forest land, after acquiring the proper residence permit.
However, both EU citizens and non-EU citizens with an SRO
are exempt from any restrictions on land purchased at this
time, and do not require a residence permit to purchase land.
A Note for All Foreign Citizens:
If you are planning to both start a business and purchase
property, it is advisable in some circumstances that you
incorporate each under a separate, non-related SRO.
All properties owned by an SRO are liable for attachment
and/or seizure in the event of a suit brought against the
company. Therefore, a liability or contract suit against
your business - whether legitimate or fraudulent - would
immediately place your house and all land assets at risk,
if you placed them all under the same SRO.
Also, if you plan to obtain a mortgage it is most often
required that your SRO includes only the business activity of
buying and renting real estate and does not have any trade
licenses associated with it.
The simple fact is that foreigners are sometimes seen by
unscrupulous people as a cash cow in the Czech Republic.
This reality needs to play an important part in your plans.
Therefore, you must always play it safe by keeping your
property and business assets separate under individual SROs.
Other Important Issues
The following issues are all addressed thoroughly in our "Answers
to Common Questions" section. Please
click
here to go there now.
- What are the long-term costs of owning an SRO?
- What do the foreign terms (words) regarding SROs mean?
- How does the SRO startup process work, and what are the fees?
- Can I buy property to let (rent)? What is the expected return?
- Should I buy off-plan (pre-built)? What is the expected return?
- What is the total price of a property purchase with all fees?
- What is the expected return on a resale?
- Can I get a mortgage for my property as a foreign citizen?
...and many more. Click here to
go to this section now.
