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The Czech Republic at a Glance

Working in the Czech Republic

Working in the Czech Republic holds chances and challenges for expats.

Ever since the fall of the Iron Curtain, the Czech Republic has continued to attract expats. This may be partly due to the charms of its capital Prague, but it’s of course also owing to astute economic management which has overseen the privatization of the economy and its opening up to foreign investment since the early 1990s. With EU accession in 2004, working in the Czech Republic has become an even more realistic options for many expats.

Working in the Czech Republic: Strengths of the Market

Working in the Czech Republic is rendered attractive to foreign employees and international companies through the country’s central location within Europe. The Czech Republic has excellent transport and infrastructure links to both the West and the East, thus providing an excellent base for doing business with Germany and Russia, for example. It’s only natural then that the country with the best infrastructure in Central Europe also attracts the biggest share of direct foreign investment in the region.

Other advantages of working in the Czech Republic include a skilled workforce and an open economy. While the Czech language probably poses one of the biggest obstacles to foreigners working in the Czech Republic, the good news is that English is widely spoken throughout the business world.

Working in the Czech Republic: Main Industries

The Czech Republic proudly looks back on a long and powerful manufacturing tradition. During the 19^th century, Bohemia and Moravia were the industrial powerhouse of the Austro-Hungarian Empire. In the inter-war years, Czechoslovakia (as it was then called) established itself as one of the leading manufacturing economies in the world. With roughly 39% of the total labor force working in the Czech Republic’s industries, the secondary sector is still comparatively strong. This is also reflected in its 38% share of the country’s GDP.

The Czech Republic’s major industries are motor vehicles, machinery and equipment, metallurgy (including iron and steel production) and metalworking, glass, china, ceramics, brewing, armaments, electronics, footwear, wood, paper products, chemicals, and pharmaceuticals. The automotive industry (including its suppliers) accounts for around 20% of manufacturing and is thus the country’s largest single industry. The Czech Republic is also the 16^th largest producer of beer in the world.

Working in the Czech Republic: The Economic Picture

A strong manufacturing industry is usually heavily dependent on export. This is also the case for companies and people working in the Czech Republic. As a result, the economic downturn starting in late 2008 affected industries and employees working in the Czech Republic to no lesser degree than its main trading partners, i.e. Germany and the rest of Western Europe, Slovakia, Poland, Russia, China, and the US.

The financial sector, on the other hand, remained relatively healthy as people working in the Czech Republic’s banks profited from the sector’s relatively conservative orientation. As a result of privatization, most banks in the Czech Republic are now foreign owned.

The tertiary sector in general is on the rise in the Czech Republic, as it is in most other modern economies. Already accounting for roughly 60% of the total labor force working in the Czech Republic, it is predicted to grow as the country moves towards a more high-tech, service-based knowledge economy.

The tourism industry in particular is on the rise, providing a substantial source of income to people working in the Czech Republic. While Prague continues to attract record numbers of tourists every year, the country’s many famous spa towns (such as Karlovy Vary or Mariánske Lázně) as well as its châteaux and castles are also increasingly popular tourist destinations.

Employing only 3% of the people working in the Czech Republic, the agricultural sector is in decline.

Working in the Czech Republic: Challenges

The main challenges which have been identified for foreigners working in the Czech Republic are bureaucracy and corruption, both very typical for post-Communist societies. As awareness of corruption, especially in public procurement, is rising among domestic and foreign businesses working in the Czech Republic, Czech officials will surely take adequate steps to counteract this development.

Another major hurdle foreigners have to tackle when working in the Czech Republic is the Czech language, which is not one of the easier languages to learn. While English is indeed widely spoken and may well be the language of business in many international companies, expats will find it very hard to start working in the Czech Republic for a domestic company without at least a basic knowledge of Czech.