CzechInvest (the Czech investment and business development agency tasked with supporting foreign investors) recently launched a “Welcome Package” in order to speed up the process for key foreign managers and specialists to work in the Czech Republic (CR). The Package promises reduction in the time required to obtain a work permit to ten business days and a long-term visa to 30 days. However, the number and nature of the conditions imposed on participants make the Package useful to only a highly select group of incoming or already locally established investors and their employees. Limiting the pool of potential participants therefore reduces this Package to yet another half-hearted measure to attract foreign investment to the CR.
The Package’s target group are statutory directors (formally appointed and registered in the Commercial Registry) of newly established companies or companies already operating in the CR, upper level management (non-registered) members and key specialists who might be temporarily transferred to the CR by their parent companies in order to develop local business or train local employees. It is limited to nationals of 3rd countries who are exempt from visa obligations (for a period up to the first 90 days, listed below article). Potential participants include both incoming foreign investors taking part in the Czech investment incentives programme as well as companies outside the incentives programme. Businesses outside the incentives programme must plan to employ at least 50 employees (20 in the case of IT/SW development businesses) within three years following their application to participate in the Package and must already be committed to purchase or rent premises in the CR correlating with that staff numbers. Established companies, on the other hand, must have at least 50 employees, be in operation for at least two years, be in good standing with respect to all their local tax / social security / health insurance / labour-related commitments and have assets of at least CZK 50 million cumulative (or, for IT/SW development sector companies, spent in excess of CZK 35 million annually on wage costs within those two years). The main benefit of the Package is obtaining the required work permit / visa documents fast, on average in one quarter the time of the traditional “non-supported” route. The general rationale for the Package and its benefits are sound, but the imposed conditions make it a rather poorly developed product.
To start with, the Package assumes that all transfers under the Package will be short-term postings, as the maximum validity period for the issued work permits / visas is limited to six months, and extensions are a time-consuming and tedious process. So, although one might get the permit /visa issued comparatively quickly, it also expires more quickly. And although the existing “green” or “blue cards” (combined work permit and visa document) take longer – up to 90 days (and, admittedly, sometimes up to almost half a year to bring in a key manager / specialist) – these are issued for at least one year to a maximum of two years, making it a more balanced and durable product in terms of effort on the part of companies and individual applicants alike.
The second shortcoming is the target group. Leaving aside a rather small pool of eligible nationalities (excluding, for instance, India, which supplies a large number of IT professionals so lacking in the EU / Czech Republic), the large multi-nationals for the most part already have procedures / local expertise and budgets in place to deal with immigration issues themselves and thus will make limited use of the Package. The small and mid-size companies still face rather high thresholds in order to participate and will get mired in a sea of documentation (and corresponding costs) in order to benefit from the Package. It is true that the previous (and still functioning) programme for accelerated procedures for intra-corporate transfers of foreign investors’ employees concurrently run by the Ministry of Industry and Trade (MIT) imposes even higher overall financial and headcount thresholds on participants, but the present Package does not represent what we consider a significant improvement in the other direction.
Finally, the amount of documentation involved does little to relieve the administrative burden the government is attempting to reduce. Participation in the Package requires submitting additional corporate documents demonstrating eligibility for the Package, whether in the form of certificates of good standing confirming compliance with local laws (issued by often not-so-speedy government agencies) or affidavits regarding future commitments of the investor, all coming on top of the normal corporate / employee work permit / visa documentation required for a permit / visa alone. The Package does nothing or very little to reduce the extent of the actual work permit / visa documentation required in “traditional” applications.
The combination of a limited target group, eligible nationals, excessive documentary requirements and the short-term nature of the benefits have resulted in a package that will be seldom-used and overall represents only a small improvement in the area. Perhaps that explains why CzechInvest also anticipates only “adequate” participation in the range dozens of applications or “100 maximum” annually.
Nationalities exempt from visa obligation for the first 90 days and eligible for participate in the fast-track procedure:
Albania, Andorra, Antigua and Barbuda, Argentina, Australia, Bahamas, Barbados, Bosnia and Herzegovina, Brazil, Brunei, Canada, Costa Rica, Guatemala, Honduras, Chile, Israel, Japan, Macedonia / Fyrom, Malaysia, Mauritius, Mexico, Monaco, Montenegro, New Zealand, Nicaragua, Panama, Paraguay, Saint Christopher and Nevis, Salvador, San Marino, Serbia, Seychelles, Singapore, South Korea, Taiwan, United States of America, Uruguay, Vatican and Venezuela