For the past 15 years, governments throughout Central Europe have dramatically reformed their economies by moving commercial enterprises from state control to private ownership. This has resulted in foreign direct investment of over $100bn throughout the region. A myriad of opportunities and pitfalls have arisen for local entrepreneurs and foreign multinationals, and traversing this new landscape can be difficult.

Foreign investors must realize that besides the benefits that investing in the Czech Republic brings, there are challenges that investors face. Dealing with these can often lead to wasting valuable time and inefficiencies in the initial investment stages. Although we cannot completely resolve these problems, we can help to alleviate them.

Key issues of investing in the Czech Republic

• Rapidly changing tax, legal and regulatory environment
  The Czech Republic still needs to make changes to their tax and legal systems to fulfill their obligations to be in line with EU taxation requirements. Simultaneously, the state is trying to balance the need of attracting foreign investors with their own financial situation.
• Skilled workforce
  The Czech Republic has a highly skilled workforce, particularly in technology and engineering. Educational and literacy levels are high. Companies report few difficulties in recruiting skilled and unskilled workers, particularly in industrial areas where unemployment is highest.
• Bureaucracy and corruption
  There are still issues with the countries of Central Europe with excessive administration, bureaucracy and corruption in spite of their EU membership.
• Administration slowing the project
  It is imperative to have project team members focusing on implementing the investment and not to be distracted by administrative issues, keeping track of tax filing requirements and minor details.
• Recruiting and training people
  Despite the highly skilled workforce and the high unemployment, which suggests availability of staff, there are still problems. There have been difficulties attracting sufficient staff and training them, as well as merging the culture of the local country and the investor and dealing with trade unions and other concerns.