Record number of self-employed foreigners in the Czech Republic

The Czech Republic now counts a record number of self-employed foreigners. Vietnamese top the list as the largest nationality, followed by Ukrainians. Despite EU integration making conditions easier for citizens from member states, the large majority of foreigners with business licenses are still from non-EU countries. This, however, shouldn't be taken as a sign that the application process has gotten any easier. Jason Hovet reports.

Illustrative photo: archive of Radio Prague
The Czech Statistical Office updated its numbers on foreigners last week, with figures for 2004. Among the more interesting news was a record number of foreigners holding a trade license, or a zivnostensky list, as it's known in Czech. Through the 31st of December 2004, the statistical office counted 65,219 foreigners doing business in the Czech Republic. That gain erases the drop recorded in 2002, after an amendment to the law made conditions tougher for foreigners to receive a license.

Vietnamese are by far the biggest group of foreigners holding business licenses. They also are the most entrepreneurial, with the highest proportion of self-employed. More than 99 percent of Vietnamese with permission to work in the country hold business licenses, rather than working for an employer. According to Marcel Winter, chairman of the Czech-Vietnamese Friendship Association, this is no surprise, as a strong work ethic is something learned from their home country, where the term unemployment benefits isn't in the vocabulary.

"In Vietnam independent business is quite common, and for Vietnamese it's completely natural to earn a living in business—by selling something or offering a service. And they are brought up and educated this way, and if there is a need, a willingness, as well as a smile and a readiness to help, which Vietnamese have, it makes perfect sense to go into business. There are very few who are employed in some firms, rather they mainly make a living in business by selling different goods and being their own boss. And they pay their taxes and are not looking for government handouts."

Winter says it is still most common for Vietnamese to be selling clothes and shoes in markets, but that this is changing. For one, more and more stall sellers, after saving many years, are now renting or even buying shops in buildings. Another change, Winter says, is that Vietnamese children are becoming better educated and looking to other professions. In fact the number of Vietnamese employed in firms, although still small, actually trebled between 2003 and 2004, according to the statistical office.

Besides Vietnamese, the office registered more than 19,000 Ukrainians as self-employed in the country, followed by almost 9,000 Slovaks. For EU citizens, it is now much easier to obtain a zivnostensky list, but for the rest, the process can still be long and confusing. Brett Ira, an American, who, with a friend last year, started Art Brokers Prague, a fine art exporting company, took a faster route by asking for help from one of the many firms that assist foreigners in establishing a Czech company, or s.r.o.

"After deciding to establish an s.r.o.... that I hired a company for, called Spolecnosti Online, and they went through the whole process of going through the court and filing my s.r.o. name and these sort of things, so it took a lot less of time. Normally, if you do it on your own, from experiences of friends, they said it could last up to eight months because of the courts. But if you hire a company, which it will run you maybe 2,000 dollars—65,000 crowns or so—but it speeds up the process and only lasted about three-and-a-half weeks."

Ira says one of the biggest hassles was the lack of communication between different offices, which often left him making multiple trips to various offices around the city in search of answers or advice. His advice to potential applicants:

"Before you start the initial process with the zivnostensky urad—the business office—to go there and speak with someone and ask exactly what you need—write it down, a list of what you need and where you need to go for this. For the most part, they are pretty helpful with this. You sometimes get lucky with who you work with; you sometimes don't because they're older people so they're more held down with the bureaucratic system, but the younger ones are always more willing to help. So, go make an appointment and ask them every time what you need to start out with, because if you don't, then you're going to be going back and forth there four or five times, and it's going to be a waste of time."