Like other former Soviet bloc nations, the Czech Republic economy is a transitional one which is moving from a state-controlled economy in the wake of the “Velvet Revolution” which brought an end to Czechoslovakia’s Communist dictatorship and paved the way for The Czech Republic to gain full independence from Slovakia in 1993. This process brought in the dawn of a more Anglo-style capitalist approach. This transition has both presented advantages and posed challenges for those intent on doing business in the Czech Republic.
Arguably the Czech Republic economy has performed well since the transition began, with the country excelling in automobile exports, enjoying one of the EU’s lowest unemployment levels, highest GDP growth rates and scoring highly in terms of economic freedom, ‘work-life balance’ and the ease of doing business. Geographically well-positioned, trade is vital to the Czech economy and generally governments ensure policies do not significantly restrict foreign investment. What’s more, setting up a business in the Czech Republic was made quicker, cheaper and easier in 2016 with entrepreneurs able to register their companies online.
Although bribery can still be commonplace, particularly in the public sector, the main issues people doing business in the Czech Republic often face is the innate mistrust harboured by many Czech professionals towards new contacts. This is one of the most distinct legacies of the old Soviet-style system. Patience and subtle persistence are needed to overcome the suspicion and doubt of Czech colleagues.
For professionals seeking to be successful when doing business in the Czech Republic carrying out research is essential. Find out what the background is of the Czech company you wish to work with and what their structure is. Discover who you are doing business with in order to anticipate how they will react when certain business issues arise. As the Czech business environment is relatively new and constantly developing, business structures vary from ex-state monopoly enterprises beset with the remnant bureaucracy of the former Soviet system to local start-up enterprises hampered by their short-termist approach. Meanwhile, depending on the age of your Czech colleagues, some may be advocates of the old Soviet-style systems, whilst younger co-workers are likely to favour, open approaches and western business models.
The World Business Culture website is a supportive source of advice, such as the fact that Czech professionals value punctuality and prefer time to plan ahead of meetings, to aid professionals aspiring to do business in the Czech Republic. Put the insights this site has to offer into practice and be on your way to business success in the Czech Republic!