Get free access to
Our legislation updates make it easy for you to keep on top of the latest changes affecting your business. Receive our articles, opinions, tips, industry news, country profiles, regional overviews and studies, latest events and even more, directly into your mailbox.
Check out our Newsroom to see what is included!
We will send you only relevant information we consider may be of your interest and treat your personal data in compliance with our Privacy policy and GDPR statement.
Unable to subscribe? Try this page.
The Czech Republic has great investment potential due to its strategic location, quality workforce and strong industrial tradition. For those entering the Czech market, another significant advantage is the wide range of business real estate available, suitable for production, strategic services or technology centres. Industrial zones and buildings are comprehensively prepared for investors, often already equipped with the necessary infrastructure. Finally, the Czech Republic offers support to investors seeking to enter the Czech market in the form of investment incentives that are fully in line with applicable EU legislation.
Even when investors have good intentions and strong business plans, they often face problems simply because they do not know the local rules and customs. Based on our real experience, here are the most common mistakes we see companies make when entering the Czech market – and how you can avoid them from the beginning.
What mistakes do investors usually make during company formation?
At first glance, forming a company in the Czech Republic appears straightforward. In reality, many investors underestimate the formalities and local specifics, which can cause unnecessary delays or complications right at the start.
Common issues we see include:
Choosing the wrong legal form: Many investors default to a limited liability company (s.r.o.) without considering whether a joint-stock company (a.s.) or a branch of a foreign company might better suit their intended business or financing model. Later restructuring is possible but often costly and disruptive.
Incomplete or unclear founding documents: Founding deeds or shareholder agreements are sometimes prepared using foreign templates that do not reflect Czech legal requirements. Missing mandatory elements, such as clear definition of the company’s business scope or rules for decision-making, can block registration in the Commercial Register.
Failure to secure trade licences: Unlike some jurisdictions, most business activities in the Czech Republic require a trade licence or other form of official authorisation. Investors frequently assume that company registration alone is sufficient, only to discover they cannot legally operate until the licence is granted.
Improper appointment of directors: Directors must meet specific criteria, including having no criminal record and no disqualification in corporate roles. Submitting incomplete affidavits or criminal record extracts from the wrong jurisdiction is a common mistake that prevents registration. In practice, we also see companies setting overly complicated signing mechanisms — for example requiring two directors located in different countries to jointly sign all legal acts. While technically possible, this slows down day-to-day operations significantly, especially where notarised or certified signatures are required.
Overlooking registered office requirements: A company must have a valid registered address with the landlord’s formal consent. Clients sometimes underrate this formality, attempting to use addresses without proper documentation, which leads to rejection by the Commercial Register. Some professional advisors, including us, provide registered address services to ensure compliance and avoid unnecessary delays.
Rushing the process: In the drive to “launch quickly,” investors may skip proper review of founding documents, powers of attorney or translations. This often backfires when registries or notaries refuse filings due to technical errors.
What we wish clients knew beforehand
With proper preparation, company formation in the Czech Republic can be smooth and efficient. However, overlooking key formalities (from trade licences to director eligibility and registered office documentation) can turn what should be a predictable process into a source of repeated delays. Early involvement of local counsel ensures that the company is not only incorporated quickly, but also fully compliant and ready to operate from day one.
What tax-related mistakes do new investors often make?
Foreigners can become founders or co-founders of a Czech company, or they can join an existing one. They may also choose to operate in the Czech Republic through a branch of their foreign company. Depending on the chosen option, the tax planning and the procedures may differ.
From the perspective of CIT registration, it is important to monitor the deadline within which the company should be registered with the locally relevant tax office. The foreign investor should also pay close attention to fiscal year setting of its newly established Czech entity. Non-compliance with registration duties and deadlines could lead to penalties and late decisions related to fiscal year setting could give rise to additional costs in the future.
From a VAT registration perspective, companies often fail to properly assess the flow of goods and services, which can lead to choosing the wrong type of registration or no registration at all. This may result in penalties for late VAT declarations. Certain types of transactions also require mandatory VAT registration within a specific timeframe. Missing this deadline can again trigger penalties. We therefore always recommend discussing the flow of goods and services in advance with the local tax administrator to avoid unnecessary costs and risks arising from incorrect VAT treatment or delayed registration.
What can go wrong when setting up payroll in a new country?
Payroll in the Czech Republic is tightly regulated and overlooking local rules can quickly lead to penalties.
Frequent issues include:
Lack of knowledge of local legislation: Missing minimum wage rates, taxes, vacation entitlements or mandatory deductions. Employment contracts must specify that payroll follows Czech labour law.
Missed registrations: Companies must register with the tax office, social security, health insurers and accident insurance (Kooperativa). A Czech office also triggers registration for TV and radio license fees.
Missed deadlines: New companies and employees must be registered on time. Foreign employees must be reported to the Labor Office on their first day. Late filings or payments can result in fines.
Payroll calculation errors: Wrong net salaries, taxes or contributions. Failing to include benefits, overtime or vacation per Czech law.
Poor document archiving: Payroll documentation must follow strict Czech archiving rules.
Violation of personal data protection rules: Insecure handling of employee data or non-compliance with GDPR and local privacy laws.
Our recommendation is to engage a Czech payroll expert early to ensure compliance and avoid costly mistakes.
What are the most common labour law issues for foreign employers?
New employers on the Czech market may find Czech labour law somewhat tricky. It is characterized by relatively strong regulation. Based on our experience, we would like to draw attention to these most frequent mistakes.
One frequent mistake made by foreign employers is the use of employment contracts prepared for other jurisdictions. While it might be tempting to rely on familiar templates, Czech law imposes strict requirements regarding the structure and content. Failure to adhere can render contracts unenforceable and may result in penalties. It is essential that all employment contracts are concluded in full compliance with local legislation.
Another common issue arises when setting wages and employee benefits. Many foreign employers attempt to implement retroactive wage increases or bonuses, but the Czech Labour Code is explicit: payments must be agreed in advance. Retroactive adjustments are not permitted.
Termination of employment also presents challenges. The legal framework provides strong protection for employees, limiting the reasons for lawful termination. Without specific legal grounds, termination is invalid.
The use of Employees of Record is tightly restricted. Only licensed employment agencies may supply them, and foreign employers must be aware of this to avoid non-compliance.
Finally, when setting employee obligations, some employers rely on unilateral declarations. In the Czech context, rights and obligations must be established by mutual agreement or through internal regulations in accordance with the Labour Code. Unilateral imposition is not permitted and failure to follow proper procedures can lead to legal complications.
What accounting or reporting problems do new companies usually face?
New businesses often underestimate the complexity of accounting and reporting in the Czech Republic. Without proper systems and local expertise, they risk non-compliance and financial penalties.
One of the most common challenges faced by new companies is poor recordkeeping. When businesses delay the establishment of proper accounting systems, they often end up with missing or inconsistent data, which makes tax filings far more complicated.
In addition, missed deadlines are a frequent problem. For example, companies must typically submit their corporate tax returns by 1 July, provided a tax advisor holds power of attorney. Financial statements must be published within 12 months following the balance sheet date.
Not having a local accountant can create further difficulties. Without the support of a Czech-speaking advisor, companies are more likely to misinterpret VAT regulations, audit requirements or tax obligations.
Another issue arises when personal and business finances are mixed. This lack of separation undermines financial clarity and can lead to complications during audits.
Our recommendation is to hire a local accounting partner early. They’ll help ensure compliance, timely reporting and a solid financial foundation.
What practical or legal issues can delay financial setup or operations?
Banking and shareholder structure are two areas where foreign investors often underestimate the practical and legal hurdles. In our experience, these issues can delay the start of operations by weeks or even months.
One of the most common issues encountered is bank account opening delays. Czech banks adhere to stringent AML and KYC procedures. When directors or beneficial owners are based abroad, the banks typically request extensive documentation, which must often be apostilled and translated. They also require detailed mapping of the ownership chain and, in many cases, the personal presence of the client. What investors might assume will be a straightforward process can extend into several weeks or even months.
Another challenge relates to the proof of sufficient funds. Although the statutory minimum share capital for a Czech LLC is merely 1 CZK, in practice, banks and contractual partners expect evidence of adequate resources. Investors who only contribute the legal minimum may find it difficult to open a bank account, secure a lease or conduct larger transactions.
Complicated shareholder structures can also create obstacles. Czech law stipulates that if a legal entity is appointed to a statutory body, it must nominate a specific natural person to act on its behalf, with this individual’s details registered in the Commercial Register. This requirement is often overlooked, resulting in registration delays and queries from authorities.
Unclear ultimate beneficial owner (UBO) documentation is another frequent problem. Banks and registries demand complete transparency. If the UBO is concealed behind nominee structures or offshore entities, incorporation, bank account opening or tax registration can be significantly delayed.
Issues also arise when clients provide missing or non-standard documents. Official extracts, resolutions and powers of attorney from abroad typically need to be notarised, apostilled and translated. Submitting informal or English-language documents without consulting local experts often leads to registration blocks.
Finally, transactions can be frozen by compliance checks even after onboarding. Banks may hold or reject payments if the business purpose is unclear or if a transaction involves a high-risk jurisdiction. The first cross-border transfers are especially likely to be subject to additional scrutiny.
What we wish clients knew beforehand
Company formation in the Czech Republic (especially for an LLC) can be completed in a matter of days if properly managed. It is therefore unfortunate when avoidable issues with bank onboarding, shareholder representation or UBO documentation unnecessarily extend the timeline. With advance preparation of ownership documents, clear designation of representatives and early coordination with local banks and advisors, investors can ensure that administrative obstacles do not block what is otherwise a very efficient incorporation process.
What risks do companies face when trying to manage everything remotely or alone?
The company primarily faces the risk of not fulfilling all its legal, tax and reporting obligations. Tax laws are complex, and their interpretation is not always entirely clear. Each case should always be assessed individually. Most freely available information and resources are of a general nature and may not be applicable to a particular case. Apart from increased costs, non-compliance may result in financial penalties, late payment interest or reputational risks.
Local advisors have not only the necessary deep knowledge, but also the practices, up-to-date procedures and tools for communication with the authorities.
A tax advisor can help identify the correct interpretation of tax regulations, support their practical application, assist with tax filings and represent the company in negotiations with the tax administrator if needed. This helps companies to stay compliant and avoid costly disputes.
It should be borne in mind that all tax registration applications must be submitted electronically, i.e., via a data box or the electronic portal of the Czech tax authority. Moreover, the only official communication language is Czech. If the company’s directors are foreign citizens, they may not have access to the data box, leaving the company unaware of official notices and obligations, which can result in sanctions or enforcement proceedings.
Therefore, the involvement of a Czech administrator can be a very helpful solution for handling this agenda effectively.
Launching your business in the Czech Republic doesn’t need to feel daunting. Through our comprehensive company incorporation services in the Czech Republic, we’ll assist you in selecting the appropriate legal structure, manage all necessary documentation and ensure your setup is smooth and fully compliant from the start.
If you’re still exploring your options or unsure where to begin, book a free market entry consultation with our local experts. We will walk you through the key steps and help you avoid the most common pitfalls of entering the Czech market.
Entering the Slovak market may look simple on paper, but the reality on the ground is often very different. From legal setup to tax, payroll and reporting, even small missteps can turn into costly problems if local specifics are ignored. Drawing on our experts’ hands-on experience, we’ve seen even well-prepared companies run into avoidable issues, simply because they didn’t have the right support from the start.
With the right guidance, Slovakia can be a rewarding place to grow. Especially in industriesseeing strong growth and investment potential, like:
Additionally, businesses entering the Slovak market can benefit from incentives, such as:
State funding
Tax holidays
Supporting employment of foreign or local employees
Even with the best intentions and strong business plans, foreign investors often face challenges simply because they aren’t familiar with local specifics. Based on real cases we’ve handled, here are the most common mistakes we see companies make when entering the Slovak market – and how you can avoid them from the start.
What mistakes do investors usually make during company formation?
Sometimes we see that investors are eager to start business as soon as possible. Therefore, they do not consider establishment of their own company but decide to buy a ready-made one or some small company from a seller that doesn’t want to continue doing business due to whatever reason. While the acquirement of a shelf company can seem easy, in fact the transfer to new owners takes the same time as establishing a new one. By new company the investors can be sure that there are no skeletons in the closet. They appear mainly in situations when the investors bought a company that already functioned for some time and did not undergo proper due diligence. We encountered a case where new owner was charged a fine because of the mistakes the original one made. In such cases it is not easy to gain back the money and the administrative or court proceedings can be pricey and long.
Another common mistake when entering the Slovak market is the establishment of the company via online tools. Yes, it can be really cheap, but the investors don’t know that many rights and obligations of the shareholders can be agreed differently than is the default set-up given by Commercial Code. Good examples are voting rights, entitlement to profit, possibility to exclude inheritance of the share, tag-along and drag-along rights, etc. These are never set without proper consultation with attorney-at-law, but it may be these rights that save your investment in the future.
Last but not least, every company has automatically set up electronic mailbox on the portal www.slovensko.sk which is used for communication with local authorities. The official mail is therefore not sent via post office, but only to this mailbox. When the executive directors of the company are foreign citizens, they may not have access thereto, therefore the situation may occur when the company is not aware of the received notices and resulting obligations therefrom, which may again lead to the imposition of sanctions and possible execution.
What tax-related mistakes do new investors often make?
When entering the Slovak market, new investors frequently make several tax-related mistakes that can have significant financial and operational consequences. One of the most common issues is delaying mandatory VAT registration. The result of the delay is the obligation to file VAT returns, VAT transaction statements and EC Sales list for each tax period for which the investor became a VAT payer. The VAT Act requires VAT documentation to be submitted in chronological order, which is both administratively and financially burdensome because it is subject to sanctions for each delayed submission.
From income tax point of view, foreign investors entering the Slovak market often do not realize that their activities in the territory of Slovak Republic may trigger a permanent establishment (PE). If a foreign investor determines that its business has a PE in the Slovak Republic, it may be required to pay corporate income tax on the profits generated from that presence. Failure to register a PE or comply with local tax laws can result in significant fines and penalties. Consulting with tax experts and legal professionals specializing in international taxation is crucial to assess your potential risk factors and ensure compliance.
Transfer pricing is another area that is frequently overlooked. Many businesses face risks either because they do not have transfer pricing documentation prepared in advance—making it nearly impossible to meet the 15-day deadline when the tax authorities request it—or because their documentation is prepared incorrectly, which can lead to challenges during a tax audit, including the possibility of the Slovak entity being allocated a higher profit margin
We also often encounter situations where many investors seek out a local tax advisor only after completing a transaction, without first analysing its tax implications. To avoid unexpected tax burdens and ensure efficient structuring, we strongly recommend consulting a tax advisor before any transaction is executed. Early planning allows investors to evaluate available options, benefit from potential tax advantages and remain compliant with local tax regulations.
What can go wrong when setting up payroll in a new country?
If you are planning to employ employees, you should keep in mind that you have obligations as an employer.
Every employee, whether working full-time under an employment contract or only a few hours a week as a Work performance agreement, Student Agreement, etc. must be registered with the Social Insurance Agency. The Social Insurance Agency allows a period of 8 calendar days for registration, but in the event of an inspection by the Labor Inspectorate, work without registering with the Social Insurance Agency is considered undeclared work and is subject to significant fines.
Another important point is occupational safety and fire protection. The employer must provide regular training for employees, provide protective equipment at work and depending on the riskiness of the work, may be obliged to provide regular medical examinations.
Among the relatively common mistakes (that can be easily corrected) when entering the Slovak market is the payment of meal allowances “retroactively” based on time worked. Please note that meal allowances must be granted to the employee in advance.
In any case, as an employer, you are obliged to comply with multiple laws and regulations at the same time, from the Labor Code, the Income Tax Act, the Social Insurance Act, the Health Insurance Act and others.
What are the most common labour law issues for foreign employers?
During our praxis we saw tons of different employment contracts, many of them made with the help of Google and later AI. It may seem easy, cheap and fast to write the employment contract in such way, but on the other hand we can guarantee that they will always miss something important. E.g., at the end of 2022 the Slovak Labour Code underwent big changes. However, many employers did not include them in their praxis to this day, thus the templates they use are outdated and erroneous. Since AI cannot think by its own, only makes compilations of documents found online, it cannot provide you with correct solution. Following this, the labour inspectorates impose fines on employers for something that could be done properly from the beginning if only consulted with an attorney-at-law.
Another common mistake is the wrongful termination process. The Slovak Labour Code states strict rules, which must be respected. Otherwise, the employees are entitled to challenge invalid termination in court, which can lead to significant financial damage on the side of the employer. The highest compensation that the company must have paid to the employee after losing a court proceeding to them was above EUR 100,000.
What accounting or reporting problems do new companies usually face?
When entering a new market, it is essential to partner with a reliable local expert. Relying on trusted recommendations rather than making decisions based solely on cost is critical. We often encounter cases where clients prefer to centralize their accounting processes. However, Slovakia is a highly specific market with complex regulations and compliance requirements. To operate in full compliance, companies must invest in local advisory support.
Ultimately, this approach proves more cost-effective than managing everything in-house from the outset. By outsourcing to a capable local firm initially, companies can ensure a smooth launch and gradually build internal systems with expert guidance.
Too often, companies do not treat their accounting provider as a strategic partner. As a result, they delay involving them in planning and only present the final setup once it is already being implemented. At that point, it becomes significantly more difficult to optimize processes and mitigate risks.
What practical or legal issues can delay financial setup or operations?
Slovakia has a strict AML regulation. When opening a bank account, banks usually want to see the whole structure and the official documents cannot be older than 3 months. For foreign companies, mainly joint-stock companies with many shareholders can be therefore difficult to undergo the process alone without local support. Many times, it happens that the documents expire, and the shareholder must ask local authorities to issue new ones. Also, in case when the company intends to cooperate with state institutions, it must be registered in the public sector partner register, where it must provide duly information on its ultimate beneficial owner. However, shareholders often do not know who it is and it is the local advisor who knows what documents must be submitted in order to find it out.
What risks do companies face when trying to manage everything remotely or alone?
Many foreign companies, when expanding to a new market, rely on the experience from their home country. Even if they are EU based and rely on the similarities of EU law, it is rarely the same. It’s those small differences that can one day cause big problems for a company. Neither AI (may it be helpful in day-to-day life) can advise you correctly every time. Therefore, it is always recommended to search for a local advisor. What may seem as a useless investment at the beginning, can in fact save a lot more money in the future, because thanks to local experts the company can avoid possible administrative or court procedures and fines.
Starting your business journey in Slovakia doesn’t have to be overwhelming. With our full-range company incorporation services in Slovakia, we’ll help you choose the right legal form, handle all the paperwork and ensure a smooth and compliant setup from day one.
If you’re still exploring your options or unsure where to begin, book a free market entry consultation with our local experts. We’ll walk you through the key steps and help you avoid the most common pitfalls of entering the Slovak market.
Updated on 13th of February, 2025
On 30 January 2025, an amendment to Act No. 65/2022 Coll. and related acts relating to the conflict in Ukraine was submitted for signature by the President of the Czech Republic. The amendment plays a key role for companies looking to employ refugees from Ukraine in the Czech Republic, as it grants foreigners special protection and free access to the labour market. Thanks to the changes, temporary protection is to be extended again until 31 March 2026.
Persons who have fled from Ukraine before the armed conflict can currently reside in the Czech Republic on the basis of different types of residence permits. In addition to ordinary residence permits, such as an employment card, a large number of Ukrainian citizens reside in the Czech Republic on the basis of:
Please note that, with a few exceptions, it is not possible to apply for another residence permit after the start of the conflict. The only exceptions are applications covered by Government Regulation No. 308/2022 Sb. According to this regulation, it is possible to apply to the embassy in Ukraine for, for example, a blue card or a permit for the purpose of study.
Embassies in Ukraine are also now accepting applications for employment cards, but only for government-approved programmes (e.g. Skilled Worker Programme, Key and Scientific Personnel Programme, etc.).
For more information on the conditions for inclusion in the economic migration programme, please click here.
Temporary protection will be extended again by affixing a new visa. Given that it is not technically possible to extend temporary protection in a single day, the process will again take place in two steps, first by registration and then by visiting the Ministry of the Interior (OAMP).
Online registration will take place on the website of the Ministry of the Interior and will be possible until 15 March 2025.
By registration itself, the temporary protection will be extended until 30 September 2025. Registration must be completed by booking an appointment to visit the Ministry of the Interior.
Data on family relations will also be filled in as part of the registration. Specifically, it will be necessary to fill in information about the spouse and children under 18 years of age, who are also holders of temporary protection.
After online registration, it is necessary to arrive at the booked date at the Ministry of the Interior and collect new visa. The visit to the OAMP must be completed by 30 September 2025. A foreigner needs to bring:
New visa will be valid until 31 March 2026.
Holders of a visa for the purpose of toleration in connection with the conflict in Ukraine will have their visas automatically extended again, until 31 March 2026. They do not have to take any further steps.
However, to avoid inconsistencies and uncertainty when dealing with the authorities, we recommend that you apply for a new visa with an updated validity date. This requires an appointment at OAMP.
We would like to remind you that the employer of a foreigner is obliged, among other things, to keep a copy of the documents proving the employee’s right to reside. The employer should therefore be concerned with whether employees who hold temporary protection have applied for its extension properly and in time.
Employers are advised to ensure that their employees register on time and then attend the appointment for the visa to be affixed. The registration will be supported by a pdf certificate which can be downloaded from the OAMP portal.
Temporary protection holders have free access to the labour market, so they do not have to deal with work permits (unlike, for example, holders of a tolerance visa).
In addition to matters related to the extension of residence titles, please note that the foreigner is obliged to report to the OAMP any significant changes concerning him/her, e.g. change of residence address, change of surname, change of marital status or change of travel document. Find the form on the OAMP’s website for this purpose. The form shall be delivered along with the necessary documents in person, sent by post or by data box.
Foreigners should also note that they may be subject to obligations such as paying utilities or health insurance.
We are ready to help you with the employment of refugees from Ukraine, do not hesitate to contact us or browse through our services in the Czech Republic.
Persons who have fled from Ukraine before the armed conflict can currently reside in the Czech Republic on the basis of different types of residence permits. In addition to ordinary residence permits, such as an employment card, a large number of Ukrainian citizens reside in the Czech Republic on the basis of:
Please note that, with few exceptions, it is not possible to apply for another residence permit. The only exceptions are applications covered by Government Regulation No. 308/2022 Sb. According to this regulation, it is possible to apply to the embassy in Ukraine for, for example, a blue card or a study permit.
Embassies in Ukraine are also now accepting applications for employment cards, but only for government-approved programmes (e.g. Skilled Worker Programme, Key and Scientific Personnel Programme, etc.).
For more information on the conditions for inclusion in the economic migration programme, please click here.
Temporary protection will be extended again by affixing a new visa. As it is not technically possible to extend temporary protection in one single day, the process will be carried out in two steps, first by registration and then by a visit to the Asylum and Migration Policy Department of the Ministry of the Interior (OAMP).
If the holder of temporary protection fails to register by the deadline or fails to present the visa after registration by the end of September 2024, the temporary protection will expire.
Online registration will be open until 15 March 2024. The registration portal will be available on the following website: www.frs.gov.cz/docasna-ochrana/#3.
The registration itself extends the temporary protection until 30 September 2024. However, it is necessary to complete the registration by booking a date to visit the Ministry of the Interior.
If the registration is not done in time and the temporary protection expires, the foreigner has the possibility to reapply for temporary protection. However, there is a risk of not being found to meet the conditions for its granting.
After registering online, it is necessary to arrive at the OAMP on the scheduled date and have a new visa marked. The visit to the OAMP must
be completed by 30 September 2024. The foreigner should submit following documents:
New visa will be valid until 31 March 2025.
For holders of a visa for the purpose of tolerance in connection with the conflict in Ukraine, the visa will be extended again automatically until 31 March 2025. There is no need to take any further steps to do so. The visa for the purpose of tolerating the conflict in Ukraine is coded D/SD/91.
However, to avoid inconsistencies and uncertainty when dealing with the authorities, we recommend applying for a new visa with an updated validity date. This requires an appointment at OAMP.
We would like to kindly remind that the employer of a foreigner is obliged to keep a copy of the documents proving the employee’s right to stay. Therefore, the employer should be concerned with whether employees who hold temporary protection have properly and timely applied for its extension.
Employers are advised to ensure that their employees register on time and then attend the appointment for the visa to be affixed. The registration will be supported by a pdf certificate which can be downloaded from the OAMP portal.
Temporary protection holders have free access to the labour market, so they do not have to deal with work permits (unlike, for example, holders of a tolerance visa).
In addition to matters related to the extension of residence titles, please note that the foreigner is obliged to report to the OAMP any significant changes concerning him/her, e.g. change of residence address, change of surname, change of marital status or change of travel document. Find the form on the OAMP’s website for this purpose. The form shall be delivered along with the necessary documents in person, sent by post or by data box.
Foreigners should also note that they may be subject to obligations such as paying utilities or health insurance.
We are ready to help you with the employment of refugees from Ukraine, do no
Persons who have fled from Ukraine before the armed conflict can currently reside in the Czech Republic on the basis of different types of residence permits. In addition to ordinary residence permits, such as an employment card, a large number of Ukrainian citizens reside in the Czech Republic on the basis of:
This type of residence will generally be given to those who fled Ukraine after the invasion by the Russian Federation. Alternatively, those whose residence permits have expired but cannot return for the time being due to the situation in Ukraine.
Please note that persons who have obtained temporary protection in another Member State cannot obtain temporary protection in the Czech Republic. At present, it is not even possible for persons with temporary protection or a visa for the purpose of toleration to switch to the employment card regime.
The most significant change is the possibility for persons with temporary protection granted in another country to apply for a blue card at the embassy in Ukraine.
We would like to remind you that holders of temporary protection issued by the Czech Republic can only stay in the Schengen area countries in a limited regime according to the so-called 90/180 rule. Thus, within any 180 days they can stay outside the territory of the Czech Republic in another Schengen area country only for 90 days.
Temporary protection was granted until March 31, 2023. Those who wished to continue to reside in the Czech Republic had to register online by March 31, 2023.
If the registration was not carried out, the temporary protection expired. In this case, the person can reapply for temporary protection. If he or she continues to meet the conditions, temporary protection will be granted.
If the registration has been duly and timely carried out, this extends the validity of the temporary protection until September 30, 2023. Until then, the holder of temporary protection is obliged to appear in person at the Asylum and Migration Policy Department of the Ministry of the Interior (OAMP) and have a new visa affixed. This will be valid until March 31, 2024. The date at the OAMP is assigned during online registration.
As part of the in-person visit to OAMP to mark the new visa, you must also provide the necessary documents. These are:
If the deadline for extending temporary protection has been missed, any entitlement to benefits (e.g. humanitarian benefits, housing assistance, free access to the labour market, access to health insurance) has also been lost.
The foreigner has the possibility to reapply for temporary protection if the circumstances that led to the first application continue to exist.
More information can also be found on the website of the Ministry of the Interior of the Czech Republic.
If you do not meet the conditions for temporary protection, you can apply for a tolerance visa. In this case, the person does not automatically have free access to the labour market and must obtain permission from the Labour Office.
Those who already have a tolerance visa in connection with the conflict in Ukraine have their visa extended automatically until 31 March 2024 and do not need to take any further steps. However, in order to avoid inconsistencies and uncertainty when dealing with the authorities, it is recommended to request a new sticker with an updated validity date. This label is marked with the code D/SD/91. A prior order is required for its marking.
There is also an exception for visas issued in connection with the armed conflict in Ukraine in relation to exit from the territory. Persons holding this type of visa for the purpose of toleration do not lose their visa by leaving the territory.
Since the employer is obliged to keep a copy of the documents proving the alien employee’s eligibility to stay, the employer should take a proactive interest in whether employees who hold temporary protection have applied for its extension in a proper and timely manner.
By March 31, 2023, temporary protection holders should have completed online registration. By doing so, they extended their temporary protection until September 30, 2023. They must then appear in person at an OAMP office to have their visa affixed by that date. The visa will be valid until March 31, 2024.
The employer can then verify the validity of the authorisation with the newly affixed visa. Between the online registration of the person with temporary protection and the affixing of the visa, the employer should request a confirmation of registration from the person with temporary protection in order to check his/her residence (see image). The registration number can be read from this confirmation. The employer can use the registration number to check the validity of the registration online.
As of April 1, 2023, employers are obliged to register all employees who have temporary protection with the CSSA. This obligation now also applies to employers who have a work performance agreement or a work activity agreement with a holder of temporary protection. The deadline for registering a person is normally 8 days.
Otherwise, the same rules apply to the employment of persons with temporary protection as to the employment of other foreigners with free access to the labour market, e.g. the employer’s obligation to report the start of employment of the foreigner and other changes to the Labour Office or to keep a register of foreign employees.
It’s possible to only employ Ukrainian refugees with free entry to the Czech labour market.
Free entry to the labour market means, that Ukrainian citizens and their family members which comply with conditions further described may work in the Czech Republic without any formal restrictions, i.e. without having to obtain a work permit in advance or the employer having to submit a job position vacancy form beforehand.
The Ukrainian citizen and his family members may work in an employment relationship, as well as on the basis of some of the agreements of performing work outside the employment relationship. Of course, the standard legal conditions must be adhered to, in particular minimal and guaranteed wage, length and schedule of worktime etc.
The Ukrainian refugee must be granted the temporary protection (or perhaps the special long-term visa, which was issued at the begging of the war conflict).
Temporary protection (special long-term visa) is marked with a sticker or stamp in the passport.
Until the above-mentioned law came into effect, Ukrainian refugees were granted a so-called special long-term visa. Since the effective date of the law, only the so-called visa for the purpose of temporary protection has been granted. According to information from the Ministry of the Interior, however, persons who obtained a special long-term visa before the effective date of the law will be automatically transferred to the temporary protection system, i.e. without having to take any action.
Temporary protection may be granted:
For the grant of temporary protection it’s necessary to file the submission personally at one of the District assistance centres for helping Ukraine – the list of these centres according to individual districts may be found HERE.
It’s advised that the Ukrainian citizens who don’t comply with the above-mentioned conditions to sort out their situation individually at the Department of Asylum and Migration Policy of the Ministry of Interior (contact points HERE).
Necessary documents to submit for the application:
The employer has the following administrative obligations:
The employer must have a record of information regarding the foreign employee in the extent:
In the language that the Ukrainian refugee understands, i.e. ideally a bilingual CZ/UA document.
The same rule applies to any other labour law documents of the employer which the Ukrainian refugee should be acquainted with.
The law nor any other legal regulation doesn’t impose this obligation upon the employer to retrieve the extract from the Criminal Records for this purpose and Ukrainian refugees are perceived as citizens of the EU.
In principle the temporary protection which as well means free entry to the labour market is only applicable in the Czech Republic, i.e. the holder of the temporary protection may not use this permit to work abroad.
Nevertheless, if the foreigner is posted within the framework of the Directive regarding posting of workers by his employer to a different entity for the purpose of performance of provision of services, the necessity to have a permit to perform work doesn’t apply to him in the Czech Republic. Nevertheless, it’s necessary to comply with other conditions according to the Directive regarding posting employees (e.g. information obligation, obligation to ensure certain equal working conditions etc.).
A similar regulation should also be applicable within harmonisation in the whole EU. However, it’s not excluded that some EU countries have made use of the possibility to apply an exception to this rule. Therefore, we recommend that you check the local regulation before sending the holder of the temporary protection to another EU country.
On the territory of the Czech Republic there are no limitations to performing business trips. However, on business trips foreigners should always have the necessary documents (mainly copy of the employment contract and travel document with the sticker/stamp proving temporary protection with them).
Yes, it’s necessary to comply with the registration obligation upon arrival and when the place of residence in the territory of the Czech Republic is changed.
For both cases the deadline is 3 days.
The registration upon arrival is done in person at one of the offices of the Foreign police.
The change of place of residence may be announced via post or at the appropriate office of the Department of the Asylum and Immigration Policy of the Ministry of Interior (territorial jurisdiction according to the new place of residence), when announcing this change the document confirming accommodation at the new address (see the forms above) must be submitted together with the form which is available here.
No, every EU Member State states its own rules for the performance of work of Ukrainian refugees. The temporary protection granted in the Czech Republic applies exclusively to the performance of work in the Czech Republic.
Yes, the entrance medical examination shall be performed before commencement of performance of work. In case there is not a chance to obtain the extract from medical records an extended medical examination must be performed.
Free entry is granted by law only temporarily, currently it’s valid till 31 March 2023. In case Ukrainian citizens will want to reside and work in the Czech Republic even after this date they will have to obtain the necessary permit in due time.
Of course, it can’t be ruled out that the effectiveness of the exemption will be extended as the situation evolves.
The limitation of the validity of the law doesn’t mean that the employment contract / agreements on work performed outside of employment must be concluded for a definite period. In our opinion, they may also be concluded for an indefinite period.
Firstly, it’s the failure to fulfil the duty to inform the Labour office when an employee commences performance of work, when the employee’s reported data changes or when the employee’s employment terminates (for more details, please see the question What are the obligations of the employer when hiring Ukrainian refugees?).
Secondly violation of the condition regarding retention of copies of documents proving the existence of employment relationship at the workplace, i.e. employment contract or agreements on work outside employment. An exception to this obligation is the situation when the employer has fulfilled the obligation to notify the District Social Security Administration of the date of the employee’s commencement of employment, which established the employee’s participation in sickness insurance under the Sickness Insurance Act (and therefore only from the moment of fulfilling this obligation) – the supervisory authority is entitled to obtain the relevant information from the Social Security Administration.
Another frequent violation of conditions which occurs during employment of Ukrainian refugees is enabling illegal work which primarily is
Lastly, the most frequently violated legal condition is the disguised employment placement of holders of temporary protection from Ukraine, when most likely the signs of job placement were fulfilled, but without the appropriate license of the employment agency or without the necessary documentation, typically disguised under a contract for work or a contract for the provision of services.
On June 23, 2022, the leaders of the European Union have formally accepted Ukraine as a candidate to join the EU. It is not clear yet how long will the joining take, but with the largest land mass in the EU and over 44 million population, Ukraine is prepared to work on the necessary reforms to become a member state.
“For Ukraine, it has been a long journey to receive the candidate status to the EU,” says Anna Magdich, the managing director of Accace Ukraine. “A lot of work needs to be done at both governmental and individual level by each Ukrainian citizen to meet the requirements and become an EU member, but there is no doubt it will be done. Granting this status is a great sign that Europe considers Ukraine as an equal and trusted partner for now and for the future.”
For more information about the latest legislation, support measures and adopted aid, visit our dedicated section in our Newsroom
As a result of the war in Ukraine, many citizens and business are forced to flee the country and search for a new place to carry on with their business activities and everyday lives. The Hungarian market in combination with the measures introduced by the local government, offers multiple opportunities and advantages for both entrepreneurs and newly established businesses. In this article, we provide a practical guide for Ukrainian businesses entering the Hungarian market, and outline the key steps and obligations that should be taken into account.
At the moment there are no specific rules for companies relocating from Ukraine. The general incentives in Hungary are responding to the dynamics of the economy.
Cash grants (tenders and VIP Cash Subsidies) and notable tax benefits are available in relation with trainings, R&D&I projects and development investments.
There are special economic zones and projects that are given priority for national economy consideration (due to strategic importance), however these are available in case of significant investments.
HIPA (Hungarian Investment Promotion Agency) is the governmental body directed by Ministry of Foreign Affairs and Trade responsible for investments.
There are no legal provisions directly addressing the transfer of a company from Ukraine to Hungary, however, the company registration process in Hungary is relatively quick. We can support you in the incorporation process.
In Hungary, there is a general rule of freedom of business activity, which means that in most cases you can set up a company and run it in the form you choose.
Some activities require registration in a specific legal form or reserve the form to persons with specific competencies.
Entrepreneurs most often decide to run business in the form of a private limited liability company. We can provide full-range support to Ukrainian companies planning to enter the Hungarian market and help with navigating the country-specific statutory requirements.
The incorporation time in the case of companies is fast. The business operations can be started upon signing the instrument of constitution. After submitting the documents the Court usually registers the company within 1 day and the Tax Authority issues the tax number in 1 day after registration – if there is no legal obstacle of registration or becoming a taxable person.
The entrepreneur is obliged to register:
The entrepreneurs shall also have a Hungarian bank account.
Citizens of the countries outside the European Union and the European Economic Area, like Ukraine, may start and conduct a business activity under the same principles as Hungarian citizens – if they have a permanent residence permit, an EU long-term residence permit or a temporary residence permit, issued for a specific purpose, for instance, in relation to university studies or researches.
Foreigners, who are not citizens of the above-mentioned countries or who do not have a residence permit enabling them to set up a business on the same terms as Hungarian citizens, may operate in the form of a company, join or acquire shares or stocks in such companies without any restriction. Also they may set up a branch of a foreign entrepreneur in Hungary.
The non-Hungarian investors have to have a person or an entity who is responsible for acquiring and forwarding the official letters sent to the foreign member.
In case of Ukrainian investors, no visa is required when entering Hungary for a shorter period of time when travelling for business purposes. Otherwise, the same applies for Ukrainians as for other investors. Also, Ukrainian citizens are eligible for a residence permit in Hungary as a refugee, therefore, they are eligible to start not only companies, but become private entrepreneurs as well.
The act of running a business illegally is subject to fines by the authorities. These illegal activities can cause prohibition of later activities and also, if any financial crime was committed (e.g. budgetary fraud), then restriction of liberty can be posed as a sanction.
The rate of social security contribution is 13% as of 1 January 2022.
The contribution paid by the employee for social security and health insurance is 18.5% of the gross salary.
The Government continuously updates relevant legislative documents in order to decrease the administrative burden for Ukrainian refugees and to assist the entities and organizations who are helping those in need.
Ukrainian citizens are to acquire the status of refugee when entering Hungary from their home as a consequence of the war. The government made several simplifying provisions related to their employment (e.g. grants for employers who employ Ukrainians), status, health care, residency etc.
We have years of experience in supporting businesses to grow in Hungary. Benefit from our free 1-hour long market entry consultancy that includes:
We can provide full-range support to Ukrainian companies planning to enter the Hungarian market and help with navigating the country-specific statutory requirements – starting from advisory on choosing an optimal form of conducting business activity and taxation to a smooth incorporation process.
In the light of the current invasion of Ukraine, we would like to ensure our clients, partners and colleagues that our Ukrainian branch office continues to operate and service customers, prioritising the safety, security, well-being and awareness of all parties involved. We have taken all the necessary precautions and steps to ensure business and service continuity, having implemented a set of systems and processes that allow us to stay committed to our community and activities.
Being present in Ukraine since 2007, we successfully managed to mitigate the potential impact of external factors these past years and what we are facing now is no exception. We coordinate both with our clients and partners to help each other, our employees and the employees of our clients. Backed up by an international team of experts and online solutions available anytime from anywhere, Accace Ukraine is ready to support existing and new customers in the capacity we always had available.“We are positive that Ukrainian businesses will recover as soon as it will be possible based on the circumstances,” says Anna Magdich, Managing director of Accace Ukraine. “Our dedicated team is ready to keep on providing support and facilitate the growth of companies, contributing to and building a thriving future for our country.”
Our professional team closely monitors the evolving government guidance and adopted legislation to understand what changes need to be made to our operations and to be able to swiftly react in the interest of our clients in Ukraine, ensuring full compliance. The experts in our other branch locations are also actively overseeing the local legislative changes implemented to support Ukrainian citizens and businesses, providing the latest information in the surrounding European countries.
For more information about the latest legislation, support measures and adopted aid, visit our dedicated section in our Newsroom
Due to the current ongoing events in Ukraine, many businesses and individuals had no other choice than to leave the country and search for a new place to keep their business activities and everyday life running. The Romanian market uncovers numerous possibilities for both entrepreneurs and newly established companies to focus on their activities, providing multiple opportunities for Ukrainians who are looking to settle in Romania. This publication offers a practical guide for Ukrainian businesses entering the Romanian market, and outlines the necessary steps and obligations that should be considered.
There are certain incentive plans in Romania that can be beneficial for individuals as well as companies from Ukraine.
Individuals working as IT specialists or in the Research & Development field may benefit from an exemption from the standard 10% income tax, under certain conditions expressly mentioned in the Romanian domestic legislation.
Companies doing business in Romania could benefit from the following incentives:
There are no legal provisions directly addressing the transfer of a company from Ukraine to Romania, only the incorporation of a new company is possible.
Recommended company type: Limited Liability Company (SRL)
Minimum registered capital: Minimum 1 RON
The citizens of the EU or EEA who will form the statutory body have to prove their integrity by submitting a notarized affidavit related fiscal record.
For Ukrainian individuals, the same rules apply and no visa is required for entering Romania.
Conducting a business without required registration can result in the revenue (obtained from unregistered / undeclared activities) being confiscated.
Newly incorporated company would be subject, by default, to microenterprises tax until the value of the total revenue per year exceeds the threshold of EUR 1,000,000. In this case, the rates are:
Note: Such rate would apply to the total revenue registered at the level of the entity, on a quarterly basis.
In Romania, the employer pays only the work insurance contribution, which is 2.25%.
The Government Decision 20/2022 set support measures and humanitarian assistance for Ukrainian individuals. More info can be found in our recently published article.
We have years of experience in supporting businesses to grow in Romania. Benefit from our free 1-hour long market entry consultancy that includes:
We can provide full-range support to Ukrainian companies planning to enter the Romanian market and help with navigating the country-specific statutory requirements – starting from advisory on choosing an optimal form of conducting business activity and taxation to a smooth incorporation process.
In response to the arrival of foreigners to Poland because of the war in Ukraine, the Polish government has developed legal solutions to help facilitate legalization of stay and work in Poland for foreigners. The indicated solutions are included in the Act of 12 March 2022 on assistance to citizens of Ukraine in connection with the armed conflict on the territory of that country. This law exists alongside the binding legal acts in the area of migration and asylum.
The provisions of this Act apply to the following persons who have crossed the Polish border since February 24th, 2022:
The Act shall not apply to citizens of Ukraine who have a permanent or temporary residence permit, a residence permit for long-term EU resident, and those who have refugee status, subsidiary protection, or approval for tolerated stay.
Ukrainians who have submitted applications for international protection (or on whose behalf such applications have been filed), or who have declared their intention to submit such applications, or who are concerned by such declarations of intent, are also not covered by the provisions of this Act. However, foreigners may still be covered by the Act if they withdraw the above application / declaration.
According to the Act, if a citizen of Ukraine has legally entered Poland starting on February 24th, 2022, and declares the intention to stay in Poland, his/her stay is considered legal for a period of 18 months with a start date on February 24th, 2022. The above provision also applies to the child born on the territory of Poland to a Ukrainian mother (the child is covered by this Law for the same amount of time as the mother), and to other members of the immediate family of a Ukrainian citizen holding a Card of the Pole.
A Ukrainian citizen’s departure from the territory of Poland for a period exceeding 1 month revokes his or her temporary protection.
The Council of Ministers will determine the date this Act terminates on by means of an ordinance. This termination will be determined by a number of factors including but not limited to: the number of foreigners that have arrived on the territory of Poland; the situation of the civilian population; and the prospect of the conclusion of the conflict on the territory of Ukraine.
During the period of legal stay, both a citizen of Ukraine having temporary protection introduced by this Act, and one not benefiting from this protection, but legally residing in Poland, is entitled to work in the territory of the Republic of Poland. The work is legal if the employer (via the domain: praca.gov.pl) within 14 days from the date of commencement of work, notifies the poviat labor office about this fact.
Moreover, a citizen of Ukraine may register with the employment office and be recognized as an unemployed person or a jobseeker.
Ukrainian citizens residing in Poland legally may undertake and conduct business activity in Poland on the same terms as Polish citizens, provided that they obtain a PESEL number. In the case of Ukrainians who came to Poland before February 24th, 2022, they can set up a sole proprietorship or any commercial company only if they have a residence permit that entitles them to do so.
A Ukrainian citizen who came to Poland before February 24th, 2022 and does not have such a residence permit, cannot establish a sole proprietorship, civil partnership, general partnership or partnership.
Legal basis: The Act of 12 March 2022 on assistance to citizens of Ukraine in connection with the armed conflict on the territory of that country (Journal of Laws of 2022, item 583).
The war in Ukraine has affected the world, and many people have joined forces to help those most affected. In response to these events, the Slovak Republic facilitated both the entry of these persons onto its territory and their involvement in everyday life, such as the employment of Ukrainian citizens in Slovakia. All useful information in Ukrainian language is available on the IOM Migration Information Center website. In this News Flash, we offer you a summary of the most important facts as well as useful information for employers.
Nowadays, all persons fleeing a war conflict are allowed to enter the territory of the Slovak Republic, regardless of whether they have a valid travel document or not.
Citizens of Ukraine with a biometric passport can stay in Slovakia without a visa for a maximum of 90 days in any 180-day period.
If you are not just transiting through Slovakia, but plan to stay here, you must report the start of your stay to the relevant Foreign Police Department in person or by post within 3 working days of entry – download form and more detailed information HERE. All the workplaces of the Foreign Police are currently working around the clock.
Temporary refuge is provided, inter alia, to protect foreigners from war in their country of origin. The Slovak Republic provides temporary refuge to Ukrainian citizens and their family members from 1.3.2022 to 31.12.2022.
A family member of a citizen of Ukraine is:
All necessary information on the provision of temporary refuge is available in Slovak and Ukrainian language here.
If the applicant is provided with temporary refuge, he can work in Slovakia without the need for additional permits. However, he cannot run a business. For business purposes, the applicant first needs to obtain permanent or at least temporary residence in the territory of the Slovak Republic.
The employer is entitled to employ a person who has been issued with a tolerated stay document and thus granted the status of “ODÍDENEC”. In this case, no work permit or confirmation of the possibility of filling a free job position is required.
The employer is obliged to inform the relevant labour office about the recruitment of such a person no later than seven working days from the date of commencement of employment relationship. The same obligation shall apply to him in the event of termination of employment of that person. The employer shall provide a copy of the employment contract or agreement on work performed outside the employment relationship and a copy of the document on tolerated stay in the territory of the Slovak Republic marked “ODÍDENEC” with the information card.
The health contributions and social contributions of such an employee shall be subject to the same rules as by all other employees.
In the Official Gazette no. 231/08.03.2022 of Romania, the Emergency Ordinance was published on amending and supplementing some normative acts, as well as establishing some support and humanitarian assistance measures.
Given the development of the situation in Ukraine, solutions have been established to ensure the rights to education, health, work, child protection and protection of people with disabilities, including the following:
The Emergency Ordinance also includes measures aimed at facilitating and encouraging civil societies, individuals and the private sector to continue making donations for the benefit of Ukrainian refugees. It also encourages international organisations to simplify their collaboration procedures.
About Accace
Accace is a proactive consultancy and outsourcing partner who bridges the gap between needs and solutions. Combining smart and streamlined technology with a holistic approach, we provide an all-round care to clients and consider their matters as our own. With over 800 experts and approximately 2,000 customers, we have vast experience with facilitating the smooth operation and growth of small to large-scale, global businesses.
About Accace Circle
Accace operates internationally as Accace Circle, a co-created business community of like-minded BPO providers and advisors who deliver outstanding services with elevated customer experience and erase the borders of service delivery. Covering over 60 jurisdictions with more than 7,000 professionals, we support over 80,000 customers, mostly mid-size and international Fortune 500 companies from various sectors, and process at least 800,000 pay slips globally.
