What makes the Czech Republic a lucrative investment opportunity is it’s unbeatable location directly in the center of the European Union, which is now the largest free-market trading block on the planet.

The Czech Republic became a member country of the EU in May of 2004. As the country continues to ramp up its infrastructure in anticipation of joining the Euro Common Currency around 2014, reasonable to high returns on all prudent investments are eagerly expected.

And the best news of all?

The price of choice properties, businesses, consumables and labor in the Czech Republic are still only a fraction (about 20% on average) of what they cost in nearby Western countries like Austria and Germany, (Prague properties excepted).

If all that wasn’t enough, the Czech Republic also features high standards of living, an educated populace, a vibrant economy, a stunning natural countryside and of course, Europe’s most beautiful and modern capital city, Prague.

Additionally, the capital city of the country’s Eastern region of Moravia, Brno (pronounced “BRR – no”), is one of Europe’s rising stars - a thriving European business hub centrally located between Prague, Vienna, Bratislava, Krakow, Munich and Budapest, served by direct flights from London and Prague.

With proper research - and the assistance of a trustworthy local company such as our own and our affiliated real estate professional – the Czech Republic now offers you a unique opportunity to maximize both the value and return of your investment capital like nowhere else in the world at this time, and for the foreseeable decade.

For more information see our latest Czech property forecast or feel free to write us an email: info@czechpoint101.com.

The prevalence of fraud against foreign investors in the Czech Republic cannot be overstated. However, neither should it keep you from investing.

Like any new market opportunity, there are the inherent risks that arise with being one of the first to invest. The Czech Republic is a new market bursting with potential, but which also has its share of money-traps for those who allow themselves to be “rushed” into an investment.

Of course, it is these same risks which serve to keep the prices low and the potential returns enormous, which accurately sums up the current situation here at this time.

The prudent investor will prepare for their participation in the Czech market the same as they would any other investment opportunity:

First: Take the time to learn about the specific markets where you have an interest, and research a little about Czech culture and the way the Czechs do business.

Second: Avoid the biggest mistake that new foreign investors make, which is to assume that your real estate agent, lawyer, developer or investment firm will protect you or your investment capital. They do not and they will not.

Don't think it's THAT bad? Read some non-client experiences I've received.

These companies make money emphatically on providing you with an opportunity to spend your money – not by researching whether or not these opportunities are safe, which is assumed to be your responsibility as the investor.

Take it from the pros: the experienced investor hires trustworthy and experienced local contacts, such as our team, to perform due diligence on every investment plan, to complete their legal work, and to represent your best interests in every deal.

With the right team behind you looking out for your best interests, it’s hard to lose in the Czech investment market at this time, as all members of the Czech Point 101 team have proven with our own financial and business investments.

For more information see the article: Are Czech Republic real estate agents accredited? or feel free to write us an email: info@czechpoint101.com.

It is not our primary job at Czech Point 101 to tell you where you should invest. Our responsibility, should you hire our team, is to back you up every step of the way to insure that you get exactly what you want. Affordably. Efficiently. And fraud-free.

We can certainly assist you with a vast wealth of knowledge, facts and professional (and personal) experience, to assist you in your investment research and planning.

As you know, all phone calls to us are made free of charge, with no obligation.

To give you at least a short answer to this common question, Prague is a dynamic and beautiful city, but it is also very expensive due to its popularity. If you are not wealthy and are using it for personal use, or you don’t wish to wait 10 years or more for a substantial return on your investment, a myriad of other lucrative opportunities exist outside of the capital city.

Consider now second and third tier cities such as Brno, Ostrava, Olomouc and Zlin.

For example, Brno, the country’s second-largest city and a booming European business hub (more on Brno). Beautiful family homes and ski-chalets in the countryside are also prime opportunities for investment and holiday purposes.

Of course, any prudent investment depends to a large degree upon your individual needs and long-term goals. Feel free to call us at anytime and discuss these things with us for a productive discussion, free of charge.

For more information see our latest Czech property forecast or feel free to write us an email: info@czechpoint101.com.

Returns obviously depend on the type and location of your investment, but expectations in the traditional range of 6-15% are certainly available.

Far more lucrative returns, which carry higher risk of course, are also available with certain properties, such as ski chalets, family homes, large building plots, and certain real estate developments in both the commercial and residential sectors.

This is because of the vast difference in price, outside of Prague (typically between 200 – 400%) between properties in the Czech Republic and neighboring European countries like Austria, Germany, Spain and the U.K. where land prices have dramatically risen in just the past few years.

Add the huge foreign interest in purchasing Czech properties and businesses, and this is expected to contribute to a huge sustainable growth in property values, and therefore expected ROI, as the country nears it’s adoption of the Euro around 2012.

Real estate purchases performed this year on behalf of clients, are expected to achieve an ROI of between 10% at the low end, and 15% in the median after all taxes and expenses over the next 18 months.

We feel that ROI in this higher end is certainly repeatable with the proper choice of investment, and are continuing to invest our own funds as individuals with these expectations.

For more information see our latest Czech property forecast or feel free to write us an email: info@czechpoint101.com.

Due to the internal changes making way for the arrival of the Euro common currency, property prices are steadily rising in the Czech Republic and will continue to do so over the next 6 years, to more closely match those of neighboring European countries. The rise is happening at a rapid pace that is gaining momentum on a monthly, not yearly, basis.

However, an investor can still buy businesses, land and property for a fraction of what this would cost today in Western Europe, earn a substantial ROI minus expenses on rapid turnover, or buy and hold for potentially greater future returns.

Some examples of properties, and their prices, which we assisted clients with over the last two years include the following. (Current exchange rates)

• A large family house in excellent condition with 18,000 sq. ft. (2,000 sq. m.) of property for 975 000 CZK. Typical prices range between 1 000 000 - 2 500 000 CZK.
• 27,000 sq. ft. (3,000 sq. m.) of commercial property in a smaller town with all utilities, permits and blue prints, pre-zoned for building construction, for 600 000 CZK. Typical prices depend heavily on location.
• 14,600 sq. ft. (1,800 sq. m.) of garden space near a small village, with a 50-tree fruit orchard and a cozy 3-season cottage, with city water and electric for 137 500 CZK. Typical prices range from 125 000 - 1 000 000 CZK.
• An apartment complex in Brno, the country’s second-largest city, with 7 apartments, reconstructed, for 2 850 000 CZK. Typical prices range from 2 500 000 – 6 000 000 CZK, up to 11 250 000 CZK for a reconstructed castle or villa (mansion).

Additionally important to note, is that those foreign citizens who wish to relocate permanently or just to have a holiday home in the Czech Republic for personal and family reasons, should act over the next 18 months as we expect property prices to increase substantially over that period of time due to huge foreign and domestic demand.

Home prices have already doubled over the 3 years prior to EU accession in many areas of the Czech Republic, and US investors especially should pay particular attention to the continuing slide of the US dollar, which makes investing more costly as well. (From June 2001 to now, the dollar has gone from being worth 40 Czech Crowns (CZK) to only 19 as of today’s writing, May 2010).

As we've said before many times, NOW is the time to act if investing in this country is an important business or personal/family goal.

For more information see our latest Czech property forecast or feel free to write us an email: info@czechpoint101.com.

To explain, the concept of 'buying to let' is as follows in italics:

The investor puts 15% of the purchase price down on the property in cash and finances the rest (85%) through a mortgage. The investor then rents the property to a tenant through a property management company. The tenant pays rent every month, which the investor uses to pay the mortgage on the property. Thus, the cost of maintenance is very low, while in the meantime the value of the property is always rising.

This, of course, is an effective and profitable plan in the USA, Canada, the UK, etc.

Can it also be a successful investment plan in the Czech Republic? Yes, if done properly with great care, patience, and the help of a trustworthy agency.

However, due to the popularity of this investment option in Europe and the hype that often surrounds it, all too often an investor is rushed into what may not be a prudent buy-to-let investment in the Czech Republic itself, because the business environment here is not the same as it is in Western Europe or the USA, etc.

Critical to remember, is that just because the option of buy-to-let works in other countries where you have had previous experience, or because you have heard good things about a certain development offer within the Czech Republic, this does not automatically mean that the Czech system is setup for such an arrangement and this must be taken into account when making your investment plans.

Here are just a few potential problems with the buy-to-let option in the Czech Republic:

1. Landlord / tenant laws in the Czech Republic are confusing, ill administered, and impossible to enforce. If a tenant decides not to pay, there is little the owner or landlord can do to evict them, and absentee-owner properties are common targets for non-paying tenants, and for property management companies who commonly place these “problem” tenants in flats owned by foreign-based investors. The problem of theft, even of entire plumbing, flooring and kitchen units, is also not unseen from absentee-administered rentals.

2. If the property falls under Czech rent control laws, the problems worsen. Rent control means that the owner is unable to charge market rates for rent, and in fact, is forced to charge rents averaging out at about 1/5th of market rates. Meanwhile maintenance requirements are strict and expensive, and place the absentee owner constantly at risk of being overcharged by agents responsible for performing the work, and, then falling outside of the law because the work is actually not performed even thought it was paid for. Tenants under rent control are also nearly impossible to evict.

3. Also under rent control, apartment swaps (illegal exchanging of tenants) is controlled not by the owner, but by the property management company and on the black market. The owner will have no control, nor even usually be aware that any swaps are taking place.

Can Buying to Let Be Successful?

Again, yes, if the investor makes a serious commitment to doing their due diligence, carefully researching the offer, all parties involved, etc., and contracts the help of a trustworthy local agency – not a foreign agency working through an unknown local provider as is very often the case with British investors and investment firms!

Let’s discuss the buy-to-let situation in this country in greater detail:

Czech property, and Prague especially, has experienced an immense amount of hype in recent years, and especially since EU accession in May 2004 foreigners are scrambling to take advantage of “buy to let” deals.

Most of these deals are offered by foreign 'investment firms,' and work like this:

You buy a property through them off-plan, ('off-plan' means that you pay first, and they promise to build the property at a later date, offering you a “discount price” as opposed to the “actual” price in exchange for buying early), then they agree to manage the property for you: collecting rents, doing maintenance, even advertising for tenants, all for a small fee.

In theory, they do the work, you collect the interest and watch your property increase in value.

In the real world, however, the majority of these companies, if not all of them, are brokers. They are not established entities in the Czech Republic, and they have little, if any experience conducting business deals in the Czech Republic.

That means they don't really do anything but collect their fees and arrange the deals, usually through a local representative, and then try to oversee the work performed from a foreign office located in another country.

The bottom line is that IF the broker is honest AND efficient AND experienced AND puts the time and care into hiring the construction companies, management companies, real estate agents, etc., that share the same values and commitment to you, the investor - then and only then can the deal be assured a reasonable success.

You are betting YOUR MONEY on their care, honesty, expertise, etc. in either case!

Realistically however, our combined experience in the Czech Republic has shown – and any local Czech person (not involved in your deal, of course) will clearly substantiate - that the actual scenario is commonly otherwise. That is, that the broker is experienced in other countries and has the best of intentions, BUT - has little if any experience in the Czech Republic itself, and how deals actually proceed here, which always follow a very simple formula, being…

… agents and brokers in the Czech Republic care about their fees, period - they do not care about their clients' financial safety or success rates.

Nor does your broker, in the end, really care either as it is not their job to do so.

Obviously, the burden of the investment's safety and ROI falls on the investor, not the broker. They tell you the story you want to hear, and if you believe it, that's your problem, not theirs. After all, that’s what they were told by their agents.

Thus, putting your money down on the often mistaken belief that an agent or broker or management company has your own best interests in mind, in the Czech Republic, is about as safe as trusting a stranger with your wallet and credit card!

In point of fact, that's exactly what you are doing.

The Bottom Line

There is no 'easy money' to be made in the Czech Republic. Take it from all of us at Czech Point 101: we all live here, we have all invested here, and we are all making a decent return on our investments.

Like anywhere, investing in the Czech Republic – including and especially buying off-plan or buying to let - requires planning, due diligence, and careful weighing of all factors involved. It also requires the assistance of a trustworthy local company like our own to perform all legal work and look out for your best interests in all deals.

Based upon our over 8 years of experience here, we estimate that 50% of the people who follow these buy-to-let plans will be ripped off in some way; be it a total loss of their investment capital in rare but unfortunate cases, or more commonly, the realization after the deal is completed that their expectations, which are based upon their broker’s brochures and verbal commitments, are not going to be met.

One experienced client recently told us: 'Absolutely none of the promises about our development were actually kept, but as the construction itself started 6 months late, at this point we’re simply happy that the properties were built.'

Buying to let or buying off-plan are certainly not investment options which are 'doomed to fail' by any means. But in this country, it is emphatic that the investor does their homework and is very selective about the opportunities they get involved with, and the firms they choose to represent them here. There is far too much risk in this country to do so otherwise.

For more information see the articles: Are Czech Republic real estate agents accredited? and Avoid These Costly Czech Republic Property Investment Mistakes or feel free to write us an email: info@czechpoint101.com.

In a nutshell, it is our professional opinion at this office that fully 10% of those investing in off-plan in the Czech Republic will be victims of fraud, large or small, and that fully 90% of off-plan investors will suffer a disappointing discrepancy between what is promised and what they actually receive. Numbers like these point to a need for extreme care when choosing an off-plan investment opportunity here.

Request our free comprehensive, property buyer's guide which answers this question thoroughly including 5 risks of buying such properties in Czech Republic.

A good rule of thumb is to take the purchase price + 8% (approximately 6% if you use us for your property closing — see fee structure), to cover all commissions, expenses, taxes and fees if you are purchasing in the 1.000.000 to 2.000.000 range.

Thus, on a purchase of a property worth 1.600.000 CZK, your normal total price would be approximately 1.728.000(total fees are 128.000).

If you used our services the total fees would be approximately 96 000 CZK.

Prices and commission fees inside of Prague can be much higher due to the very high competition for attractive properties. It is common even to pay simply for information, or a prospectus, about a viable property.

Once purchased, yearly land and property taxes must be paid, but are extremely minimal. They range from 1Kc to 4Kc per square meter, per year. Maintenance fees also apply, and will be briefly discussed in the next question.

Yearly SRO maintenance costs about 20.000 CZK a year, which covers basic accounting, tax filing and registered office rental.

For more information see the article: Avoid These Costly Czech Republic Property Investment Mistakes or feel free to write us an email: info@czechpoint101.com.

In short, yes.

Mortgages are granted to foreign residents by local banks via an established SRO, (Czech limited liability company) or as an individual if you have a Czech residency. You can read much more about SROs in the next section of this webpage.

For individuals, 85% mortgages are possible for those with good, provable income.

As well, banks can use potential income from a property toward proving necessary funds to cover a mortgage, however, each bank calculates this differently and there is often a interest rate penalty for doing this.

Banks lend more freely to long-time established entities and companies than they do new ones, as can be expected. Otherwise, they do not usually distinguish between foreign and local citizens that heavily.

In case of a newly established business (SRO), it is sometimes necessary to provide the bank with a precise business plan in order to assure the lender that adequate funds are available for consistent payments, (a fairly large concern here).

If the bank approves the business plan the mortgage is normally granted under the following five (5) conditions:

1. The amount lent will not exceed 85% of the maximum value of the property, as valued by the bank’s own property evaluation firm.

2. The borrower must invest their own funds at a minimum level of 15% of the maximum value of the property, et. al.

3. The maximum lending period cannot exceed 25 years.

4. The interest rate is fixed for a maximum of 5 years, after which it is recalculated by the lender.

5. Interest rates currently range from 4-7% per annum.

For more information visit the latest posts on our blog regarding Czech mortgage and refinance questions or feel free to write us an email: info@czechpoint101.com.

This is an extremely important question, because the answer is a 100% 'NO.'

For any individual to sell real estate in the Czech Republic – that is, in order to represent the buyer, seller or both parties - and/or to represent any investment, development or property firm to a foreign or domestic investor:

No accreditation is necessary. No functioning oversight committee exists. No schooling is required or offered. No degree or certificate is required. No official standardization committee exists. Incorporation is not required.

What is required under Czech law is simply a 1000 CZK license, which is often neglected because it forces the agent to register for tax purposes.

There is one association of real estate offices called ARK CR however, we have found the effects of this organization on the actual conduct of its members to be minimal.

In addition, it is sometimes the case that real estate 'agents' to team up with 'lawyers' who are also not licensed attorneys, but paralegals or law students.

Don't think it's THAT bad? Here are some non-client testimonials I have received:

Cyril Fitzgerald (Dublin, Ireland): 'Just to let you know, I read with great interest your article/page regarding property purchase in the Czech Republic. Having no experience whatsoever but knowing what I wanted to purchase, I guessed things would go in a straightforward manner.'

'Let me simply outline the problems I encountered...#3) The reality or property companies simply wanted me to do the deal at all costs, no matter what. Changing their minds seemed commonplace and they will in fact, sell you anything at all. They will simply talk their way out of problems that are perfectly real to you, the buyer. They simply want the deal, and that's that. #4) Hidden costs, for example, charging the buyer fees for the purchase when in fact the seller pays the costs... #6) Finally the bureaucracy was the most daunting element. The less efficient the structures, the more time wasting and draining the whole procedure seemed...'

'The experience may have cost me approx 3,000 euros or so all told, but look what i could have lost. EVERYTHING.'

'My thanks to Czech Point 101 for setting the record straight with their experience and knowledge. Wish I had read their reports first, but knowing me, I had to find out for myself.'

Karl Jeffery (London, UK):

2005 :: 'So far we had a meeting with the estate agent and the solicitor and the seller – it turned out the estate agent hadn’t done any work at all, hadn’t got any of the right documents, and the CZK 55,000 'deposit' they were asking for was actually a finder’s fee which they expected to be paid by the buyer (us) whether or not the flat was eventually sold. '

2006 :: 'We gave up in the end and decided to put the money into a new house in London - I think we tried about 5 places but after spending money on solicitors etc none of them were actually buyable. With the last place we looked at, the vendor was unable to come up with the right documents. My conclusion was that nobody actually manages to buy a property in Brno, but lots of money is being made from deposits paid by gullible German dentists.'

Dan Gendron (USA) with Czech wife:

'I appreciate the follow up. Just to let you know I've referred a few other people to your web site that are considering buying in Czech. We are going to buy a 3 plus 1 flat in Frydlant. It's a co-op and we will just pay cash for it. We were going to buy a house but we will wait until the next visit for what seems to be a more complicated purchase. The process was overwhelming for my wife and I wish I had used your company...If we do end up looking for land or a house I will be sure to do it right next time and call your company first and save myself and my wife a lot of aggravation.'

For more information see the articles: Cesky Krumlov Property Purchase Horror Story and Avoid These Costly Czech Republic Property Investment Mistakes or feel free to write us an email: info@czechpoint101.com.

Yes, as of May 1st 2009, it is possible for a foreign citizen of any country to purchase property in Czech Republic without restriction except in the case of agricultural or forest land. However, banks are usually requiring a Czech residency permit or SRO in order to obtain a mortgage.

For more information see the article: Restrictions on Foreigners Purchasing Property in Czech Republic – Lifted May 1st, 2009 or feel free to write us an email: info@czechpoint101.com.

Request our free comprehensive, property buyer's guide how the different types of property ownership affect you as a buyer or see the article: What is the difference between OV (osobní vlastnictví) and DV (družstevní vlastnictví) ownership in Czech Republic?

Here are some factors as published by CEREAN (Central European Real Estate Associations Network) in their Czech Republic section:

'The Czech legal code gives preference to the real owner of a property instead of that which is written into the public records (in the cadastre of real estate). An extract from the cadastre of real estate does not always reliably reflect the ownership rights to real estate. It can happen that a seller can bring forth documentation of ownership of a lot or piece of land from the cadastre of real estate, an investor buys the land, and the cadastral office registers him as the owner. A few years later, though, legal proceedings are begun to determine the actual ownership of the land, and a court decides that the owner of the land is someone else.'

'An extract from the cadastre of real estate is not, therefore, sufficient documentation for closing a contract. The results of privatization and restitution of real estate do not always correspond to the actual, factual state of affairs. When buying real estate in the Czech Republic, it is of the utmost importance to thoroughly go through all available documentation on the basis of which the ownership rights have been granted to the seller, or as the case may be to any of his family members, either living or deceased. This requires adequate knowledge of local conditions and the legal directives in individual time periods in which the evaluated documentation came about. The goal of this investigative process is to find out whether there was ever an ownership dispute or conflict in the past that could in the future threaten the rights of the investor.'

'Strict rules and regulations are valid for transfer of real estate in the Czech Republic. A purchase contract can be declared invalid for slight errors in how the real estate is named or described, or because certain less than specific wording is used. It is not enough for the cadastral office to agree to register the ownership rights to the cadastre. There have been and continue to be cases when the formal validity of a contract is disputed years after the cadastre office has agreed to an investment or transfer. The actual contract itself, then, by Czech law, is rendered less important. Simple, mechanical inspection of foreign contracts can act to rob an investor of his money and his real estate.'

'During the Communist era, in 1951, there occurred on the territory of what is now the Czech Republic the denial of traditional principles known as 'superficies solo cedit', which up to that time had been valid. This legal principle made it impossible for one person to own a building on land which belonged to another person. Essentially, what the new legal ruling did was make it legal for one person to own a building on another person’s land. This rather inconvenient amendment to ownership law has remained on the books until today.'

'A general problem in the Czech Republic is the slow rate of court proceedings. Like a number of other countries, the Czech Republic has been sanctioned for its slow pace of court proceedings. The European Court of Human Rights has ruled that the country must pay compensation in a court case on the settlement of a real estate dispute in the common name of a married couple. The court case was stuck in the court system for more than 10 years. '

For more information see the articles: Cesky Krumlov Property Purchase Horror Story and Avoid These Costly Czech Republic Property Investment Mistakes or feel free to write us an email: info@czechpoint101.com.

The vast majority of property investors in the Czech Republic are members of the EU. Czech Republic no longer restricts how foreign nationals can purchase property here. However, at the time of this update, many banks are still requiring a residency permit as a mortgage requirement.

The two options for a foreign citizen for purchasing property are through an SRO (Czech limited liability company) or as an individual with or without a Czech residency permit.

Taxation

The main consideration of whether to go the route of one or the other remains taxation.

If you buy as an individual and hold the property for more than 5 years, this property not being your primary residence, you will not pay capital gains on the property in Czech Republic.

This being said, some clients from EU countries have informed me that even if the capital gains is not paid here because of this exemption, their home countries would require payment of taxes on this gain. This would be a good question to pose to your home country accountant. In some cases there can be a tax advantage in your home country to receive the capital gains as dividend payment through a foreign company rather than capital gains.

If you buy as an individual and sell before the 5 years, you will be required to pay capital gains tax as an individual. Since there is no capital gains tax as such in Czech Republic, tax is calculated on it as if it were normal income.

As of 2009, personal income tax is a flat 15%.

Let's work through a scenario then where an individual sells a property before the 5 years with a capital gains of a hypothetical 1 000 000 CZK with no other income. Based on the flat personal income tax of 15% you would pay a total of 150 000 CZK in taxes.

For an SRO, on the other hand, capital gains are always taxed at the corporate tax rate for net profit. As of 2009 this is 20%. This would make the tax on 1 000 000 CZK of capital gains at 210 000 CZK. This leaves you already with more tax on the amount than you would have as an individual.

Another consideration of taxation is that it is generally easier to expense property related costs through an SRO compared to an individual, because it is a stand-alone enterprise.

Costs

Regarding the costs of each, an SRO is definitely more expensive to maintain and requires some added costs because of the higher standard of accounting required. Currently the cost of accounting and tax filing for a one property SRO through our accounting partner is around 10 000 CZK/year.

Also, there can be slightly higher rates for electrical and gas if the owner of a property is a company rather than an individual (don't understand this one...).

Liability

Another consideration is liability.

Czech law stipulates that a company is only liable for the amount of assets it possesses. The individual shareholders are not personally responsible unless there is unpaid initial capital outstanding (200 000 CZK total). If this is paid in full (in 100% of the SROs that Czech Point 101 has setup, this is done at the outset) then there is no additional liabilities. This being said, there is personal liability on the part of the director of the company, should there be found gross negligence.

Although the Czech Republic has not typically been a litigation oriented society, it is increasing moving in this direction, following the trends in Western countries.

Mortgages

Currently at the outset of investment in Czech Republic, it is easier for a person purchasing as an individual to get a better loan to value ratio and slightly better interest rates than purchasing through an SRO.

Banks are looking for a track record on the SRO.

This being said, after two years of good investment history and payment through an SRO, the banks often offer better interest rates and mortgage terms to an SRO as opposed to an individual.

Attainability

The final factor in the discussion, is how difficult it is to obtain either.

A Czech SRO can be owned by any individual and individuals of any citizenship are now able to fulfill all roles within a company, provided they have a clean criminal record, are over 18, have not been subject to bankruptcy, etc.

For an EU citizen obtaining a residence permit (in the case that it is a mortgage prerequisite), it requires two things that can be difficult to obtain.

The first is a valid 'purpose of stay'. This can be any number of things including being registered in a university program, having a work permit or being a licensed professional or business person.

The second requirement is that you need an accommodation address for which you have permission to stay while in Czech Republic.

Meeting these requirements can be the difficult part of obtaining a Czech residency permit for those who are not actually living here at the time of purchasing a property.

Conclusion

Well, hopefully this adds some factors and helps you to make the right decision when it comes to which route you will take when investing in Czech Republic.

At Czech Point 101 we are prepared to assist you with either route in meeting the requirements and, ultimately, help you to achieving a successful investment.

For more information see the article: Avoid These Costly Czech Republic Property Investment Mistakes or feel free to write us an email: info@czechpoint101.com.

An SRO is no longer required for any foreign national citizen to purchase property in the Czech Republic. However, why can an SRO be a good choice?

Because for both EU citizens and non-EU citizens alike, forming an SRO allows you as a foreigner to purchase property - start a business - or relocate an existing company in the Czech Republic safely, legally, and with the appropriate tax and liability shelters to protect your assets both here and at home from legitimate, or fraudulent lawsuits.

The good news, is that with our company forming your SRO is straightforward, affordable and simple. What’s more, you can do it with complete confidence.

We do not manufacture “bulk” SROs, but work with all of our clients one at a time from scratch - assuring that your project large or small receives our personal attention at every step, and that your completed company is free of legal or tax entanglements created by any previous owners.

For more information see the article: Restrictions on Foreigners Purchasing Property in Czech Republic – Lifted May 1st, 2009 or feel free to write us an email: info@czechpoint101.com.

The long-term costs associated with owning an SRO are very simple, and can be broken down into three items:

1. Registered Office Rental, or 'Sidlo'

The Sidlo is the address where your business will be located. Typically this is not the actual physical address, but simply a physical location where you will receive all official mail for your SRO. Our fee (May 2010) for this service is 1.400 CZK per month. If the purpose of your SRO is only for real estate and you purchase a property, it is possible to move the sidlo to your new property.

2. Yearly Business Accounting

For property-only SROs, our charge (May 2010) is a maximum of 8.000 CZK per year (+ VAT). Business SROs can contract with our accountant according to standard agreement.

3. Yearly Tax Filing

Again, for property-only SROs, our charge (May 2010) is a maximum of 8.000 CZK per year. Business SROs can contract with our tax professional according to standard agreement.

For more information see the latest articles on our blog regarding Czech SRO and related tax/accounting questions or feel free to write us an email: info@czechpoint101.com.

Czech law requires that these four requirements are met for every SRO, with the exception of the Z. List (see below), which is not actually required if you will be using the SRO for property purchases only. Czech Point 101 can provide you with any or all of these requirements for a set fee if you wish.

Sidlo - pronounced 'SEED-lo'

The Sidlo is the address where your business will be located. Typically this is not the actual physical address, but simply a physical location where you will receive all official mail for your SRO. If you intend to buy property with your SRO then your new property can become your Sidlo.

Jednatel - pronounced 'YED-na-tel'

The Jednatel is your company executive (CEO) in the Czech Republic. They are responsible for all the basic functions of your business, such as proper accounting, tax reporting, contracts and banking. Who your Jednatel will be is by far the most important consideration you will have when forming your SRO.

The Jednatel can be an individual of any nationality without the requirement of having a Czech visa or residency permit.

Zastupce - pronounced 'ZAS-toop-seh'

The Zastupce is the company representative, who insures that your business meets the requirements of the local Trade Office. This is only in the case of those SROs which would like trade licenses or 'z-lists' which have some prerequisites in order to obtain, such as for handling food or toxic chemicals.

Zivnostensky ('Z') List - pronounced 'ZIV-no-sten-ski'

Use a soft 'z' like the 's' in the English word 'treasure'. List is as the English word 'list.'

The Z. List is the Trade or Business License your company will be provided when you form your SRO. For example, if your company will be performing computer repair, you will receive a Zivnostensky List for computer repair. You can apply for as many Z. Lists as you require. However, as with the Zastupce above, some Z. Lists may require proof of special education or experience.

For more information see the latest articles on our blog regarding Czech SRO and related tax/accounting questions or feel free to write us an email: info@czechpoint101.com.

We provide comprehensive, quality legal work for all of your investment and property needs, but Czech Point 101 is not just an SRO provider.

In exchange for our affordable fees, our team provides personal assistance with the cultural, legal and financial issues involved in planning a sensible investment, and critically, we will minimize your exposure to the fraud commonly directed against foreign investors in this country's financial environment.

The entire SRO process through our company is fairly straightforward, and consists of 6 Steps which are detailed below.

The time until job completion includes about 3 to 6 weeks of filing forms, (depending on your location), then approximately 14 days for the Czech Commercial Register to issue your completed SRO certificate.

However, once the initial paperwork has been filed, (as quickly as 24 hours), you may begin conducting limited business with your company, such as signing lease agreements, almost immediately.

How Our SRO Startup Process Works, in 6 Steps:

Step 1: Call us to discuss your individual needs regarding the formation of your SRO. All phone calls to us are made free of charge with no obligation.

Step 2: Complete our simple 2-page SRO Questionnaire and send it back to us.

Step 3: Pay the required fees for the formation of your SRO. Our flat fee includes all legal, filing and tax costs plus all state fees.

Step 4: Fulfill the four legal requirements of your Sidlo, Jednatel, Zastupce and Z. List (the last two only if you will do business with your SRO. All of these items are discussed briefly right here on this page.

Of course you can call us for free assistance with understanding these requirements at any time.

Step 5: Verify all documents which we will send you and sign them in front of a any Czech notary (if you’re here), or at the Czech Embassy or Consulate nearest you.

Step 6: Czech law requires an initial deposit of 200.000 CZK to complete the SRO process. This money is wired directly to your SRO account, not to us!

Once the deposit is received, the SRO will be registered usually within 14 days. No fees are taken from this deposit; the full amount is useable by your new company.

Within 30 days of the company being registered you will be required to tax register the company with the relevant Financial Office.

For more information see the latest articles on our blog regarding Czech SRO and related tax/accounting questions or feel free to write us an email: info@czechpoint101.com.

SRO (also s.r.o.): 'Spolecnost S Rucenim Omezenim' An SRO is a Czech limited liability company. An SRO requires an initial investment capital of 200 000 CZK.

AS (also a.s.): 'Akciova Spolecnost' An AS is a joint-stock company. Typically used for larger real estate or business ventures where there are numerous investors. An AS requires an initial investment capital of 2 000 000 CZK or 20 000 000 CZK if the company is started through an initial public offering of shares.

For more information see the latest articles on our blog regarding Czech SRO and related tax/accounting questions or feel free to write us an email: info@czechpoint101.com.

It is very true in property management that 95% of the work is getting the right tenant from the start. Our policy is to risk a period of vacancy rather than place a bad tenant who damages a property or becomes non-paying.

Of course, it is impossible for us to guarantee every time that we will source the best tenants, however, we use time proven methods which help us to make a decision.

First of all, our experience has proven that the gut feelings we have about a person often prove right in the long term. Do they seem agreeable? Or are they immediately demanding changes or special treatment? Do they arrive on time or are they late (hey, it happens to all of us) without an explanation or apology?

Secondly but even more important is to check references.

We feel potential tenants should be able to provide you with references to their boss at work and their last landlord at the drop of the hat. A good potential tenant who has good relationships will have no hesitation offering you contact for their boss and previous landlord. Any hesitation is a bad sign and stroke against the applicant. Of course, a potential renter truly may not have the contact information on them but in 95% of the cases, they would.

Once we have the references, we check them! If anything seems out of place we err on the side of caution.

Primarily, our team at Czech Point 101 views your property as if it was their own. This is the greatest factor in a property management company sourcing good tenants.

For more information see the latest articles on our blog regarding Czech property management questions or on our website about what makes our company's property management services special or feel free to write us an email: info@czechpoint101.com.

We strongly believe in the need to get your property out to as many venues as possible. The more interested parties, the more chance of selecting a good tenant.

Of course, nowadays the internet is one of the most effective methods of advertisements and that also goes for the Czech Republic.

A large rental market in Czech Republic is the foreigners. We know where the foreigners look to find rental properties and are always looking for new venues. There are many websites which have forums in different languages which often have a posting section of properties for rent. We have identified a large number of them and regularly post our properties for rent.

However, we don't overlook the local rental market! We know where locals look to find places to rent and we advertise.

In some markets where students are a large target rental market we have placed print advertisements in university faculties and dormitories.

For more information see the latest articles on our blog regarding Czech property management questions or on our website about what makes our company's property management services special or feel free to write us an email: info@czechpoint101.com.