The Czech Republic attracts emigrants from the CIS with its proximity to its location, EU membership and relatively low prices for basic vital goods and services. However, not everyone has a chance to settle down safely in this country. The main difficulty is finding a job. Usually, with employment, everything is going more or less successfully for the owners of demanded professions and for those who intend to open their own enterprise here. But business immigration to the Czech Republic has a number of features that should be dealt with while still at home.
A little about the Czech economy and business sphere
The Czech Republic is one of the top most industrially developed countries in Europe. Its economy is based on industry, construction, tourism and the service sector.
According to European analysts, the republic's economy is now in a stage of rapid growth of entrepreneurial opportunities. This reason can be called the main one among those for which global corporations are investing significant sums in local business.
The Czech government, for its part, is doing everything possible to attract foreign investors to this sector. For example, at the legislative level, taxes on profits for legal entities are limited: in particular, the maximum tax rate cannot exceed 20%.
Every year the Czech Republic is visited by a huge number of tourists who are ready to leave a lot of money here. It is no coincidence that the highly publicized Prague with its sights is now one of the ten richest European cities.
There is a stable demand for Czech real estate. Moreover, it is actively bought by both companies and individuals. And if you consider that prices for it are constantly growing, we can say that this is one of the most profitable ways to invest money.
What does the Czech legislation on business immigration say?
Foreign entrepreneurs can conduct their own business in the Czech Republic under the same conditions as local residents. For example, low import duties on products open up great prospects for retail and wholesale trade. In addition, small businesses are not required to use cash registers in their work, and it will not be difficult to obtain a license.
Just a couple of years ago, opening your own company guaranteed a long-term Czech visa. Thanks to this, a huge number of companies were registered in the country in the shortest possible time, which in fact did not conduct any activity. The current situation has led to massive checks by local authorities, as well as to toughening requirements for businessmen wishing to start their own business. Now, in order to open a long-term visa, they need to prove that their company is not only functioning, but also brings a stable income.
In January 2021, a law came into force, which reduced the amount of the authorized capital for an LLC from 200 thousand kroons (approximately 7.6 thousand euros) to 1 kroons (0.03 euros). However, in this case, the probability of a long-term visa refusal is almost 100%.
Therefore, so that the local Ministry of Justice does not have any questions, you will still have to invest in the authorized capital. And, as practice shows, the more it is, the better.
The opening of your own company in the Czech territory is regulated by two documents:
- Code of Laws "On Entrepreneurship".
- Immigration Law of the Czech Republic.
Requirements for candidates:
- reaching the age of majority;
- legal capacity;
- absence of tax arrears and convictions;
- availability of qualifications in the chosen direction. For example, if it is planned to open a company in the tourism sector, the applicant must have the appropriate education or work experience in this area.
And one more important condition: to move you will have to rent or purchase housing. Without this, it will be impossible to obtain a visa permit.
Business Immigration Ways
Those who come to the Czech Republic from Russia and other post-Soviet countries have two options for organizing their business:
- purchase of a ready-made enterprise;
- opening a company from scratch.
The first way is faster and easier, but with specific pitfalls. You can make a purchase within 10 days. Most often, a company already has an authorized capital, it is registered with the tax authority, and has a registered legal address.
To reissue, you will have to perform several steps:
- Change address.
- Pick up a new name.
- Change co-owners.
- Re-register a current bank account.
All changes are entered into the Commercial Register.
However, when buying such a company, you need to understand well the reasons that prompted the previous owners to get rid of it: perhaps the business has gone bankrupt or is mired in debts and unfulfilled obligations. To find out all this, you will need a lawyer who is fluent in Czech.
About what you need to consider when choosing an already operating enterprise for the acquisition, and how the procedure goes, read the article "Buying a ready-made business in the Czech Republic".
But opening your own company from scratch involves:
- choice of the form of ownership (joint stock company, public trading company, cooperative, LLC, private enterprise);
- determination of the direction of activity;
- selection of the name of the company, which should not be repeated in the register of the Ministry of Justice;
- opening a bank account;
- certification by a notary of the lease agreement for the premises and the charter of the enterprise.
Since the list of necessary actions is quite extensive, it can take about 20 days to register a business.
What you need to emigrate as an entrepreneur
The initial stage of working at your own enterprise in this country is obtaining a license. For this purpose, an application in the prescribed form is submitted to the Department of Commerce. The state fee will be 30 euros. The term for consideration of the application is about 5 days.
To register a business you will need:
- Diploma of education.
- Labor book confirming work experience in the chosen direction.
- Course certificates.
A license is not required to work in the following areas:
- trade and intermediary services;
- Agriculture;
- tailoring;
- photography services;
- textile industry.
To register a company in these areas, you must provide:
- International passport.
- Medical certificate of health status.
- Certificate of no criminal record.
- Insurance for the next six months.
- Confirmation of experience in these areas at home.
After considering the request, the candidate is issued a Unified Registration Form, which should be entered in the commercial register at the legal address of the company and the place of residence of the entrepreneur. Registration will take about one week. And the cost of the service will cost 200 euros.
The next stage is registration with the tax service. The businessman has only 2 weeks for this after the information about the company is entered in the register. As soon as this is done, your company will add to the list of Czech legal entities, and you can return home to deal with obtaining a long-term business visa.
How to get a residence permit
It is unrealistic to get the possibility of permanent residence in the country only on the basis of opening your own company - first you need a long-term visa. At the same time, first it is issued for 1 year, and only then the candidate gets the right to apply for a residence permit.
The temporary status is subject to renewal - 2 times for 2 years. After that, the applicant can apply for permanent residence, having lived for 5 years, has the right to apply for citizenship.
The package of documents for obtaining a residence permit looks like this:
- Statement.
- Copy of your international passport.
- Photo.
- Extract from the trade register.
- Bank statement.
- Confirmation of housing availability.
- Certificate of good conduct.
- Extract from the tax service on transfers to the state treasury of taxes from the company's profit.
- Receipt for payment of the fee - 4 thousand kroons (154 euros).
In addition, you may be asked for a copy of your license, statute, and civil passport. In most cases, there will be an interview.
The decision to issue a residence permit is made by the country's Ministry of Internal Affairs and the Office for Foreign Citizens' Affairs. The applicant must apply for a residence permit in person. The main advantage of this status is the possibility of permanent residence and running your own business in the Czech territory.
Tax rates
The Czech taxation system is not much different from the European one as a whole, and the calculation of rates in it is fully consistent with the principles of a market economy.
In 2021, all taxes in the country can be divided into several categories:
- income tax - no more than 19%;
- VAT, the formation of which is carried out at the base rate (21%) and reduced (15%);
- income tax for individuals - from 12 to 32% (depending on the amount of income), for legal entities - 24%;
- property ownership tax - 1-4 kroons (0.03-0.15 euros) per 1 sq. m.
Do not forget about social insurance, which is paid in the amount of 8% of the employee's salary, as well as health insurance: 4.5% of the employee's salary and 9% is added by the company.
A Few Tips
If you do not have experience in opening and running your own business abroad, you will definitely need advice on how to do it better in the Czech Republic:
- The choice of the field of activity. It is necessary to pay attention to those areas that are considered the most promising in the state. These include:
- tourism;
- restaurant industry. Those who manage to open even a small cafe in a noisy place with good prices, an original menu and an interesting interior have chances of success;
- construction;
- sale of souvenirs;
- car rental;
- hotel business. Hotels located in tourist areas or large cities will bring a good income;
- export of Czech products. It is most in demand in Slovakia, Germany and Austria;
- import. We will have to offer local consumers excellent quality and attractive prices. Since the domestic market of the country is more or less balanced, it is not so easy to get into it.
- internal business of a small segment. Designed for those who are not chasing big profits. The total income from such a case can be no more than 1700-2000 euros per month.
- Workplaces. In the Czech Republic, there is no requirement as to how many must be created. A private entrepreneur can work for himself. But legal entities in any case will be forced to hire employees. They can be both locals and foreigners. But for this you will have to register with the Pension Fund and the Medical Insurance Board.
- Business location. Depends on the direction of the activity. If it intersects with the tourism sector, then, of course, it is better to choose regions popular with tourists. But for an agricultural enterprise, remote regions of the country are more suitable. Do not forget that the most expensive rental of premises in Prague.
- Business schools. To fill the lack of knowledge in the field of doing business, special schools designed for enterprising people allow:
- Graduate School of Business (Prague) - the tuition fee is about 1700 euros for 1 year. But here you can get education in tourism business management.
- US Business school (Prague) - collaborates with the Rochester University of Technology in the United States. Grants an MBA degree.
- Prague International Business School is one of the most prestigious schools in the country, where you can get education in any of the leading economic areas in the Czech Republic.
Conclusions
Before the decision to move is made, it is necessary to weigh the pros and cons of this process:
| Positive aspects | Negative sides |
|---|---|
| The opportunity to move to the Czech Republic with the whole family. | Complicated process of obtaining a long-term business visa. |
| The company registration process is not too complicated. If you know the Czech language, you can cope with it yourself. | The presence of an obligation to pay taxes, even if the income of the enterprise is zero. |
| The extension of the residence permit occurs every 2 years, which is not too often. | Inability to work on the basis of a business category visa. Even if the project turns out to be unsuccessful, you will have to return home and apply for a work visa in order to be able to work for a Czech employer and receive a salary. |
| Ability to apply for both long-term and short-term visas. | Opening your own enterprise in no way affects the speed of legalization in the country as a whole. |
