Czechia

Czechia Map

PROPERTIES & RESIDENCE

Pros for obtaining a property in the Czech Republic

Acquiring residence permits in relatively easy in the Czech Republic and it can lead to citizenship in 5 years. There has been a solid GDB growth. GDP per capita is 22,843 EUR. Low interestest rate, low inflation, high growth rates; uneployment rates at very low levels.

Properties in Prague are considered to be heavily overvalued but still constitue an interesting investment direction. Czechia is a property market in a developed economy. Yields are not that high - 3% maybe 4% yield is possible.

Czechia is considered to be a country with good work ethics and many opportunities and Prague is within a strategic location in Europe. Berlin, Vienna and Wroclaw are still within 350 km. Population is growing and the increase is expected, as opposed to other countries.

There are low buy-sell costs when it comes to property purchase. The 4% real estate transfer tax has been abolished.

The real estate prices away from the city center can be found for 3,500 - 4,500 EUR. Every apartment in the city center or the business center is already way above these prices.

Residence permits on the grounds of owning real estate

There are no restrictions on foreign buyers in the real estate markets. You can set up a company dealing with real estate or any other line of business. Once you are there you can simply increase your assets by purchasing a real estate.

Residence permits on the grounds of company formation

Setting up a business is the quickest option. You have to prove that you have around 15,000 EUR on the bank account and you can support yourself and you have to participate in the national healthcare scheme. Proof of a place to stay is necessary; then you get get a residence permit for yourself and your dependants. It is a quick process - takes 3-6 months.

Taxes & Rental income tax

Rental Income Tax is low; it is 15% to 23% and there is a stardard deduction of 30% for expenses, including CGT. Capital Gains Tax is added to gross income in the year. If you keep the property for 10 years after purchase you do not pay CGT. 15% is the general income tax; there is no wealth tax.

Other residence types in Czechia

There is a multitude of other residence types in Czechia; however as an investor you may be interested primarily in the company formation model which is mostly straight-forward and fastest.

Which residence permits offer a path to permanent residency and citizenship?

There is a variety of residence permit types leading to acquiring the passport. It guarantees access to the Schengen Zone, US and Canada.

Restrictions & Challenges

High prices - are a disadvantage. It is a mature market and tourism is not expencted to grow in the future. There has been a development shortage and there aren't that many construction sites.

The Czech Republic is certainly one of the most developed countries in Central and Eastern Europe. Its success is also seen in what foreign investment is concerned. Numerous businesses operating in the Czech Republic are incorporated with foreign capital. Some of the sectors in which investment is flourishing are real estate, strategic services, manufacturing, tourism etc. The country provides a set of advantages which are attractive for foreign investments.

>Growth And Business Advantages

Like all world economies, the Czech economy suffered as a result of the COVID-19 pandemic. Growth that had been sustained through to 2020, suffered a loss of fundamentals in domestic demand, tax revenues, and exports.

“A decline in all three meant that the Czech economy contracted by a projected 5.6% in 2020 (6.6% according to the Czech government), but this was a slower decline than the EU average (7.4% according to EU forecasts).”

A positive GDP is expected in 2021, and 2022, but growth is not expected to be back to pre-COVID levels until 2023.

One of the most affected sectors of the economy was automotive industry exports, which is the largest sector of exports in the country. The high level of integration of the global supply chain in the Czech economy meant that the automotive sector was especially sensitive to disruption. Additionally, the automotive industry was already experiencing stress, as domestic production of cars had been in decline before COVID. Producers, principally Skoda had been looking for lower labor costs in other parts of the “new” European states throughout the last decade. Nevertheless, industry accounts for 32% of GDP and 37% of the labor force, with the automobile industry the largest part of that sector. Skoda, of course, is still king of the hill with its main plant in Mladá Boleslav, accounting for around 10% of all exports, and is a source of national pride. In recent years even Toyota and PSA (Peugeot Citroën) have started to produce cars in the Czech Republic. Czech cars (trucks, buses, tractors, motorcycles etc.) are the backbone of exports, and together the sector accounts for 80% of all exports.

Services contribute to 56.2% of the GDP and employ nearly 60% of the active population. The tourism sector maintains its pace of sustained growth, with the number of guests accommodated in collective accommodation establishments reaching almost 22.0 million in 2019 (+3.5% year-on-year)

Tourism is the number one employer in the Czech Republic. Prague, obviously a beautiful city, with a great historical center, is one of the premier tourist attractions in Europe. There have been significant efforts to spread the tourist wealth out past Prague and into the countryside, as there is an internal argument that all tourist development is targeted to Prague. However, for all practical purposes, this effort has been met with limited success. The tourist money is still essentially in Prague.

Investors who place their investments in the Czech Republic can obtain aid in the form of investment incentives. Czech and foreign legal entities and natural persons engaged in business can apply for investment incentives. Only a legal entity with its registered office in the Czech Republic can be a recipient of investment incentives.
Supported Areas
-- Manufacturing industry
introduction or expansion of production in sectors of the manufacturing industry
-- Technology centres
construction or expansion of R&D centres
-- Business support services centres
start or expansion of the activities of
- shared-services centres
- software-development centres
- high-tech repair centres
- data centres
- customer-support centres (call centres)

You or your company can extend your reach into a higher level. Here are the some opportunities :
• Greenfield, Brownfield and Real Estate Investments
• Joint Ventures, Long-Term Coperations and Suppliers
• Mergers & Acquisitions
• Investment Opportunities in Specific Sectors
- Aerospace;
- Nanotechnology & Materials;
- Automotive;
- Cleantech and Energy;
- EE/Electronics;
- Business Support Services;
- Engineering Technology & Machinery;
- Software & ICT
- Life Sciences

REAL ESTATE TRENDS

The Czech Republic has for many years been the most expensive residential market in Central Europe.
According to Deloitte data, in 2018 an average new apartment on the local market cost EUR 2,525 per 1 sq m, and in Prague the primary market prices have reached as much as EUR 3,200 per sq m. For comparison, in Poland and Hungary it was: EUR 1,370 / sq m. and EUR 1,323 / sq m. In 2018 and 2019, the transaction prices of flats increased by an average of 9.8% and 8.9%. Consequently aApartments in East Germany became attractive to Czechs.
Over the past 5 years, Czech apartments have already increased in price by more than 40 percent. In terms of the prices of new space, the Czech Republic has caught up with neighboring Austria.
It is hardly surprising that Czechs living in the northwest of the country are looking with interest at the German housing market. For example, in Chemnitz (approx. 250,000 inhabitants), the average price of a second-hand apartment fluctuates around EUR 1,000 / sq m.

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Statistics

Capital City
Prague
Currency
CZK
GDP Growth
3.7%
GDP Per Capita
€19,600
Annual Inflation
2.3%
Unemployment
3.5%
Avg net salary
€1,276
Avg salary growth
-0.9%
Area (km²)
79000
Border states
PL, SK, DE, AT
Residence

via Company Formation
via Owning Real Estate

For Sale
Miniature
€566,500
For Sale
Miniature
€155,000
For Sale
Miniature
€223,000
For Sale
Miniature
€240,000
For Sale
Miniature
€170,000
For Sale
Miniature
€357,000
For Sale
Miniature
€273,000
For Sale
Miniature
€100,000
For Sale
Miniature
€600,000

Greece > Halkidiki > Pallini — Villa 150 m²

Greece > Halkidiki > Pallini
For Sale
Miniature
€610,000
For Sale
Miniature
€430,000
For Sale
Miniature
€211,000
For Sale
Miniature
€72,000
For Sale
Miniature
€195,000
For Sale
Miniature
€200,000
For Sale
Miniature
€499,000
For Sale
Miniature
€610,000
For Sale
Miniature
€127,000
For Sale
Miniature
€169,000
For Sale
Miniature
€550,000
For Sale
Miniature
€114,000
For Sale
Miniature
€305,544
For Sale
Miniature
€296,945
For Sale
Miniature
€235,000
For Sale
Miniature
€496,000
For Sale
Miniature
€410,000
For Sale
Miniature
€61,000
For Sale
Miniature
€302,500
For Sale
Miniature
€261,800
For Sale
Miniature
€700,000
For Sale
Miniature
€284,900
For Sale
Miniature
€260,000
For Sale
Miniature
€577,000
For Sale
Miniature
€134,500
For Sale
Miniature
€247,000
For Sale
Miniature
€671,000
For Sale
Miniature
€410,000
For Sale
Miniature
€127,000
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