Working in the Czech Republic?
Working in the Czech Republic
At a Glance:
- Located at the heart of Europe, the Czech Republic is conveniently positioned for business and trade — ideal for expats.
- The Czech economy is heavily dependent on exports, as well as having a growing service sector which makes up approximately 60% of the national GDP.
- Czech is particularly difficult to learn; however, English is widely spoken, so communication should not be an issue.
- Anyone with a permanent home in the Czech Republic where they spend more than 183 days per calendar year is considered a resident for tax purposes.
Since the fall of the Iron Curtain, the Czech Republic has attracted expats. This may be partly due to the charms of its capital city, Prague, but can also be attributed to privatization of the Czech economy and subsequent opening-up to foreign investment during the 1990s. After the country joined the EU in 2004, finding a job in the Czech Republic has become a realistic option for many more expats.
In 2016, the government of the Czech Republic registered a new short-form name, Czechia, intended to make life easier for English speakers and clear up ongoing confusion and unofficial name shortening. The full and short name can be used interchangeably.
The Czech Market — At the Center of Everything
The Czech Republic is a particularly attractive location for both foreign employees and many international businesses due to its central location within Europe. With good transportation and infrastructure links, it’s an excellent base for doing business with Germany and Russia, for example. This infrastructure, combined with its reputation among investors as being a stable westernized market, means the country has succeeded in attracting a large amount of direct foreign investment.
Other advantages of working in the Czech Republic include a skilled workforce and an open economy. While the Czech language poses one of the biggest obstacles to foreign workers, the good news is that English is widely spoken throughout the business world.
The Driving Force behind the Czech Economy
The Czech Republic economy has its roots in manufacturing. During the 19th century, Bohemia and Moravia were the industrial powerhouses 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. Today, roughly 38% of the total labor force remain in the industrial sector, with 60% of the labor force in the secondary sector, which comprises almost 60% of the country’s GDP.
The Czech Republic has several key industries, including motor vehicles, engineering, steel production, pharmaceuticals, and more. The automotive industry accounts for around 28% of the Czech manufacturing output and is the country’s largest single industry. Besides the automobile industry, beer is a cornerstone of the economy; the Czech Republic is Europe’s sixth largest beer producer, but when it comes to beer consumption, the Czech’s outdrink not only the rest of Europe, but the world!
The Up-and-Coming, Stagnating, and Declining Sectors
As in many countries with a strong manufacturing industry, the Czech Republic’s economy is heavily dependent on exports. Consequently, the country was affected by the 2008 global financial crisis due to the decline in foreign demand for their goods. However, in recent years it has successfully recovered, seeing steady GDP growth and a low unemployment rate (4% in June 2017).
The Czech financial sector, on the other hand, managed to remain relatively healthy during the 2008 economic crisis. This was partly because the country had experienced its own banking troubles in the late 1990s, implementing relatively conservative measures to maintain stability as a result.
While the agricultural sector is in decline (employing 3% of the labor force), the service sector is on the rise in the Czech Republic. Although the size of the service sector in relation to its contribution to the national GDP has stagnated over the past couple of years at roughly 60%, it is predicted to grow as the country moves towards a more high-tech, service-based economy.
The tourism industry is also on the rise. While Prague continues to attract record numbers of tourists every year (with just over 7 million visitors in 2016 alone), the country’s many famous spa towns (such as Karlovy Vary or Mariánske Lázně), as well as its castles, are becoming increasingly popular tourist destinations.
Obstacles at Work: Language and Corruption
Bureaucracy and corruption are features of daily life in the Czech Republic; in the 2016 Corruption Perceptions Index, Czech Republic ranked 47 out of 176 countries. Although it is technically against the law, prosecution for corruption is still poorly enforced.
Another major hurdle for expats is the Czech language; the Foreign Service Institute rate it as a level four difficulty language, requiring approximately 44 weeks of learning to become proficient. However, English is becoming more widely spoken, particularly among the younger generation, and international companies generally use English.
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