The Czech Republic has emerged as an attractive destination for foreigners looking to establish and expand their businesses. Its strategic location in the heart of Europe offers easy access to the European Union market and neighboring countries, making it an excellent hub for trade and logistics.
Also, thanks to its EU membership, Czech Republic grants access to a market of over 450 million consumers, while supportive investment programs and grants attract foreign direct investment.
Additionally, the Czech Republic fosters innovation and research, which in turns facilitate collaboration between businesses and academia. These factors collectively contribute to making the Czech Republic an attractive destination, offering growth opportunities and supportive business environment.
Types of business and trades for foreigners in the Czech Republic
The Czech Republic has various types of businesses, including:
- Private Entrepreneur (Živnostenský list): this refers to a type of business where an individual operates as a sole proprietor, assuming full responsibility for the business.
- Public Commercial Company (V.O.S.): this is a form of partnership where two or more individuals or legal entities join together to conduct business activities.
- Limited Partnership (K.S.): is a Czech business structure that includes a general partner and a limited partner.
- Joint-Stock Company (a.s.): this is a company with shares held by shareholders.
- Limited Liability Company (s.r.o.): this is a Czech independent legal entity with limited liability, that is separate from its owners.
- Cooperative: this is an association of individuals or legal entities with a shared economic interest.
Types of trades in the Czech Republic
In the Czech Republic, different forms of trade exist, and they are classified based on the necessary qualifications and licenses required. This includes:
- Unqualified trade: this type of trade refers to business activities that do not require specific professional qualifications or licenses.
- Professional trade: this trade includes business activities that require specific professional qualifications or certifications.
- Vocational trade: vocational trade in the Czech Republic refers to occupations that require specific vocational training or apprenticeships.
- Licensed trade: this trade involves business activities that require obtaining a license or permit from the competent authorities. These licenses typically apply to specific industries or professions that have specific regulations.
Note that it is important for individuals or businesses to understand the specific criteria and comply with the necessary qualifications, licenses, or permits based on the type of trade they intend to pursue in the Czech Republic.
Conditions under which foreigner individuals can do business in the Czech Republic
Foreigners can do business in the Czech Republic under the following conditions:
- Legal status: foreigners must have a legal status that allows them to conduct business activities in the country. This generally includes having a long-term residence permit, a work permit, or being a citizen of an EU/EEA member state or Switzerland.
- Company formation: foreigners looking to do business in this country can establish a company, such as a LLC (s.r.o.), Limited partnership or a joint-stock company (a.s.). The Czech company choosen will depend on their requirements. The process involves fulfilling the legal requirements, registering the company with the relevant authorities, and obtaining necessary permits and licenses.
- Business Visa: foreigners who want to engage in business activities in the Czech Republic without establishing a company can apply for a business visa. This gives them the means to engage in negotiations, attend meetings, and take part in exhibitions.
- Commercial representation: foreign nationals can also engage in business by establishing a commercial representation office. This allows them to promote their products or services, conduct market research, and engage in commercial activities, but not directly engage in sales or invoicing.
- Work permits: foreigners employed by a Czech company or self-employed in the Czech Republic may need to obtain a work permit or a business license, depending on the nature and duration of their business activities.
- Tax obligations and compliance: foreigners engaged in business activities in the Czech Republic are required to fulfill their tax obligations. They must comply with tax laws, including registration for tax purposes and filing tax returns.
It is advisable for foreigners looking do business in the Czech Republic to seek professional advice to navigate the specific requirements and procedures based on their business plans circumstances.
Please, contact Damalion now to open your business in the Czech Republic.
