Business in the Czech Republic: opening and registration for an immigrant

general information

For residents of other countries (not members of the European Union), special rules apply for business registration. This is due to the need to obtain a suitable migration card and collect a package of papers to register a company.

About business immigration

The Czech authorities support business, especially for small and medium-sized enterprises. Foreign entrepreneurs note a small number of inspections by regulatory authorities, long-term (10-20 years) loans with a low interest rate, and tax inspectors who are loyal to beginning businessmen. There is no discrimination against visitors.

When planning your business, you should clearly calculate the business plan; success largely depends on this. In Europe, the payback of an enterprise takes a little longer than in Russia. This is due to the high level of competition, tax burden, and in addition, in the Czech Republic, local residents are very frugal.

Business visa and its types

Before moving, it is recommended to apply for a regular tourist visa, get acquainted with the area where you plan to move, and study future competitors. This type of visa allows you to stay in the country for up to three months.

For a long stay you will need a residence permit (RP). This will allow you not only to travel, but also to get a job, create a company, hire employees, and purchase real estate.

Types of migration cards:

A simple residence permit is for those who plan to open a new organization. Available for 1 year with the possibility of extension;
Business card - if you decide to invest in an existing project or buy it out. The peculiarity of the visa is that there is no need to reside permanently in the republic. You can be in any Schengen state;
Permanent residence - can be obtained after 5 years of residence in the Czech Republic, the main requirement is the success of the entrepreneur and the absence of problems with the law.

All types can be issued at the Ministry of Justice of the Czech Republic, for which you will have to collect documents and undergo an interview with an employee of the department.

Optimal types of business in the Czech Republic

When planning a business, you need to take into account that thousands of migrant entrepreneurs work in the Czech Republic.

Most of them are visitors from Eastern European countries, they are engaged mainly in small businesses:

Sale of souvenirs and other small trade;
Providing services for the population (beauty salons, sports clubs);
Car resale and repair.

In medium and large businesses, the competition is somewhat lower, but significant start-up capital will be required.

One of the optimal options (from the point of view of payback and profitability) is the distribution of Czech goods to Russia and other countries.

Documents for business registration

To open a business in the Czech Republic, you must provide the following documents to the registration chamber:

A copy of a foreign passport.
Certificate of no criminal record in the applicant’s country of residence. The document must be translated into Czech and certified by a court translator.
A certified copy of the birth certificate and a translation of this document into Czech, also certified.

Conditions for moving to the Czech Republic for entrepreneurs

A businessman who decides to settle in the republic must determine how business will be conducted at his enterprise. Most often, people who organize small companies run them themselves. And those who participated in the opening of large offices organize their activities, after which they leave for their homeland or other countries.

Choosing the right visa, conditions for obtaining it

You should choose a registration method depending on the type of company and the way it is managed. If you do not plan to reside permanently in the Czech Republic, then it is enough to make a business card. This will allow you to stay in any EU country and come to the republic only if necessary.

If you need to personally manage a company, you will have to obtain a residence permit.

Conditions for obtaining a residence permit, permanent residence, citizenship

Why Czech Republic

Business in the Czech Republic opens doors for Russians to many countries that are part of the European Union. In this country, Russian citizens with in-demand professions, such as programmer, IT specialist, and so on, have excellent business prospects. Knowledge of languages is also welcome - English, German and, of course, Czech. In this case, there are practically no problems with employment and communication. The Czechs themselves are very loyal to citizens of other states who honor their traditions and way of life.

Of course, the global crisis has affected the economy of this country, and now it has become more difficult to find a job. The Czech authorities recommend that their companies hire Czechs first, and only then turn to the services of citizens with permanent residence in this country or an EU passport.

Buying an existing business and starting from scratch

A foreigner who has expressed a desire to buy a ready-made business project must:

Submit a detailed business plan for a period of at least 1 year;
Confirm the availability of open accounts in Czech banks with the necessary assets;
Have no criminal record (certificate from the Ministry of Internal Affairs of the Russian Federation).

Registration of the purchase of a company occurs with the assistance of intermediary lawyers. Then the new owner is registered with the Ministry of Justice.

The opening of a new organization also takes place with the participation of legal firms; specialists will help:

Compile the papers correctly;
Open accounts;
Register with the required departments.

During the operation of the enterprise, officials will monitor the accuracy of financial statements. If necessary, subsidies can be provided for start-up businessmen.

Popular areas of activity among Russian-speaking entrepreneurs

Russian-speaking migrants (Russians, Ukrainians and Belarusians) most often specialize in the following areas:

Russian stores were very common in the 90s, now their popularity has decreased, but there will always be people who want to buy kvass, dumplings or curd cheeses. Income level is low - about 400-1000 dollars per month;
Organizing excursions - this is most often done in Prague, the country's tourism center. It is important that to organize a company you will need a minimum of finance, a fairly good knowledge of historical places and knowledge of 2-3 foreign languages. Often excursion trips are organized in private minibuses. Depending on the presence or absence of regular customers and a good reputation, profitability can vary from $500 per month;
Real estate companies – renting out rooms, apartments or houses. The profit is not very high (with a small client base - no more than $1000 per month), but the costs are also low;
Intermediary services for visitors - this concerns assistance to students when enrolling in local educational institutions, services of a trusted person (for compatriots) when they carry out legal activities, and so on. It is important to understand that you should specialize in only one area. Profit depends on the specifics of the work, on average from 700-800 dollars per month;
Distributor company - it is best to export alcohol, cars, machine equipment, and medications from the Czech Republic. Profit depends on supply volumes;
Restaurant and hotel business - although this area requires significant start-up capital, it is popular among wealthy Russians. For a month, the profit from one hotel will be from $700 (small family boarding houses), large hotels in the capital will bring in several times more money. Small restaurants will also not generate much money.

Business ideas with minimal investment

To start your own business you will need a small amount:

For future tour guides;
For people who decide to engage in small private transportation;
Consultants preparing applicants for university studies.

It is profitable to buy cars in France and Belgium and resell them in the Czech Republic, the Baltic states and other countries. Taking into account the low prices for used cars, the initial amount for starting a business is 2-3 thousand dollars.

Examples

Anton (businessman from Ukraine):

I have been purchasing, pre-sale preparation and sales of used cars in the Czech Republic for about 3 years. We work together with my brother. The only negative is that you often have to drive all over Europe in search of cars. But the income is constant, taxes are high, but you can take out a loan at 4-5% for 20 years. Due to this we plan to expand in the future.

How to apply for a visa

Before contacting the Czech mission, Russians need to collect the relevant papers.

Documents for opening a business visa for up to 90 days:

An invitation from a Czech legal entity, which indicates its contacts, as well as the applicant’s data, and the rationale for entering the country. The invitation is issued on company letterhead and confirmed by a seal.
An extract from the Czech Trade Register confirming the registration of such a company.
International passport with two blank pages.
Application form in English.
Financial documents guaranteeing the applicant’s financial security (letter of guarantee or certificate from the bank).
Certificate from place of employment indicating position and income per month or year.
Medical insurance in the amount of 30 thousand euros or more.

To register a long stay in the country, you will need a certificate stating that the applicant has already registered a business in the Czech Republic and that he has no criminal record in the Czech Republic or at home. It is also important to confirm the availability of housing (rental housing) in the republic.

Legal nuances

Most types of activities will require licenses - for restaurant business, cargo transportation, and so on.

Business registration

Several types of organizations can be organized in the republic:

Private entrepreneur (PE) - will require the acquisition of an appropriate license. This design is suitable for those who do not plan to hire employees;
LLC is popular among organizers of small companies. The size of the authorized capital is from 200 thousand crowns;
JSC - the authorized capital is distributed over a certain number of shares, issued to one person or legal entity;
Rarely used are cooperatives, limited partnerships, and publicly traded companies —these organizations have multiple members who are subject to specific rules.

Sequencing:

Determination of registration data of the future organization (name, type of activity);
Drawing up constituent documentation;
Obtaining a certificate of no problems with the law;
Registration of a license for a certain type of activity;
Transfer of the company's authorized capital to the account;
Registration in the commercial register and tax office.

Taxation

Taxes in the Czech Republic are:

Direct – withheld from legal entities and individuals (from the amount of profit and property):

For profits of legal entities – 19%;
On the income of individual entrepreneurs – 15%;
Sale of real estate – at least 4% of the proceeds;
Road (transport) - depends on engine size, weight, number of axles (for trucks).

Indirect - surcharges to the amount or tariff, the most important tax is VAT, equal to 21%.

Other subtleties

New companies in the Czech Republic register quickly - 2-3 weeks. To create a commercial organization (not an individual entrepreneur), you will have to spend at least 2.5 thousand euros.

It is important to find experienced lawyers who will quickly and competently perform all the necessary actions and advise a novice entrepreneur.

Czech tax system

The taxation system in the Czech Republic controls compliance with the conditions of equal competition and is quite conducive to business development. The income tax in this country is 20%. The Czech tax system is adapted to European standards. It cannot be said that the rates in the republic are the lowest in Eastern Europe, but, nevertheless, there are over 150 investment projects here, thanks to which it was possible to attract 3.6 billion euros into the economy.

The Czech Republic has entered into bilateral agreements with 37 countries to avoid double taxation. That is, business in the Czech Republic for Russians and citizens of other countries is quite a promising and profitable solution. The government is gradually reducing corporate taxes. A single rate has been introduced, and income tax for legal entities has already been reduced by 9%.

Tips, descriptions of common mistakes

The main reason for the closure of business projects is poor development of the development strategy. Very often, entrepreneurs are guided by previous experience that was acquired in other countries. At the same time, the peculiarities of the local sales market are not taken into account.

Czechs are very conservative in terms of consumption and are wary of new goods (services). Therefore, you need to carefully get to know your intended target audience; the wider it is, the greater the chances of success.

It is important to understand that the basis of successful entrepreneurial activity is market research. Or rather, a good introduction to future clients. You will have to spend some time to understand the mentality of the Czechs, their habits and needs.