Guide to living and working in Czech Republic

Czech Republic

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Country Overview

 

Population

10.2m

Unemployment Rate

6.0% (12/07)

Average annual unemployment rate 1995 – 2004

6.8%

GDP

Kc 2,978bn / €115bn / $171bn

GDP per head

€8,226 / $12,190

Capital

Prague

Major language

Czech

Life Expectancy (UN)

73 years (men)

80 years (women)

Monetary unit

1 koruna (Kc) = 100 halers

Internet domain

.cz

International dialing code

+420


The Czech Republic is one of the most stable and prosperous of the post-Communist states of Central and Eastern Europe. Growth in 2000-07 was supported by exports to the EU, primarily to Germany, and a strong recovery of foreign and domestic investment. Domestic demand is playing an important role in supporting growth as the availability of credit cards and mortgages increases. The current account deficit has declined to around 3.3% of GDP as demand for automotive and other products from the Czech Republic remains strong in the EU. One risk to balanced economic growth is rising inflation from higher food and energy prices.

 

The Economy

 

Industries include: metallurgy, machinery and equipment, motor vehicles, glass and armaments.


Pay

 

 

 

 

Human development Index

Ranking:  32nd
Index value:  0.891

 


The Human Development Index combines statistics on GDP, adult literacy, average years of schooling and life expectancy to provide an indicator of human development. The HDI shown here gives the ranking of 24 countries among 177. See http://hdr.undp.org/en/ for more information.

 


Getting a job

Overview of the labour market:

The Czech Republic’s labour market varies considerably between different regions. This is particularly evident when comparing the northern and eastern regions of the country with Central Bohemia or the capital. Prague consistently has the lowest level of unemployment (2.7%), thanks to its attractive location for foreign investors and strong provision of services, primarily in the tourist sector. Whereas the Ústí and Silesia-Moravia regions are running unemployment rates of 13.2% and 12.2%, respectively.

As the number of jobs increase and unemployment has fallen, the current state of the Czech labour market is considered to be the best in the last five years. The electrical engineering sector has enjoyed strong growth, together with optical instruments, rubber and wood-processing. There have also been a large number of investors and considerable growth in the automobile industry, represented by the automobile plants: Škoda (Mladá Boleslav, Vrchlabí, Kvasiny), TPCA (Kolín) and the newly built Hyundai plant in Nošovice. Employment in the service sector is also on the rise. However, leatherworking, textiles and garment manufacturing are on the decrease. Employment in agriculture has also been falling; the secondary sector has reported a slight increase, mainly due to continuous growth of employment in the construction industry.

Applying for a job:

The most common way to apply for a job is to send in a CV, accompanied by a cover letter explaining your reasons for applying. If you are looking for manual work, it is better to go and see the employer in person. Most employers require an active knowledge of Czech; therefore, your application should be drafted accordingly. You may also ask in advance about the employer’s language preferences. Your curriculum vitae should contain personal data, education, professional experience, other skills, interests and references. A job applicant who is invited to a selection procedure or to an interview should take with him/her a curriculum vitae and copies of all certificates. Since selection procedures are rather formal occasions in the Czech Republic, appropriate attire is important. In some cases, an interview may be accompanied by a psychological test.


Conditions and rights


Employment law:

An employee is an individual who has agreed to be employed, under a contract of employment, to work for some form of payment. Trade unions have the right to take part in labour relations, including collective bargaining, under the conditions laid down by law. The employer is obliged to inform and consult with competent trade union organisations about important changes in his organisation, economic situation, work standards, etc.

Working hours:

Standard hours: The weekly working time may not exceed 40 hours. Working underground in the extraction of coal, ore or non-ore minerals, in mining construction and at geological exploration mining facilities may not exceed 37.5 hours. Those below the age of 18 may not exceed a limit of 30 hours per week and the length of individual shifts may not exceed 6 hours.

Holidays and leave: 

Standard holiday entitlement is four weeks per year for employees working under an employment contract. Longer holiday entitlements may be agreed in collective agreements. Certain groups of employees (in public administration, autonomous public bodies and contributory organizations) are entitled to 5 weeks, other groups (teachers and academic staff), 8 weeks. Employees can take a holiday after having worked for 60 days; however, if the employee works for a shorter time, he/she can take 1/12 of the total annual vacation entitlement after working for 21 days. Every employee is entitled to take at least two consecutive weeks of holiday.

Maternity leave: entitlement is 28 weeks. A mother with two or more children is entitled to 37 weeks of maternity leave.
Parental leave: may be granted, upon request, to a mother or father after the end of maternity leave, until the child reaches the age of three.
Additional holiday: employees performing extremely hard work or work that is harmful to their health are entitled to an additional week of holiday per year.

Other types of leave: include time off for compulsory military service or to develop or increase qualifications needed for one’s job.
Public holidays: 1 January, Easter Monday, 1 May, 8 May, 5 July, 6 July, 28 September, 28 October, 17 November, 24 December, 25 December and 26 December. An employee working on a holiday is entitled to extra pay under the law.


Contracts

Types of employment:

Any person aged over 15 years old, who has completed their compulsory secondary education, may become an employee. In recent years the use of temporary employment contracts has increased significantly; however these cannot last more than 2 years. The most common type of employment is full-time employment, but there is also seasonal and casual help, voluntary work and employment through agencies. There are also agreements on work performed without an employment contract, namely agreements on performance of work and agreements on work activities.

Self-employed persons:

Under the Trades Licensing Act, independent gainful activities (without employees) may be carried out by a person over the age of 18. Self-employed persons are obliged by law to pay health and social insurance, and taxes.

Employment contracts:

The employment relationship between an employer and employee is established solely by means of an employment contract. Prior to the signing of an employment contract, the employer is obliged to inform the employee of his/her rights and obligations.
The contract must be made in writing and the employee must receive a copy. If the contract does not specify the employee’s rights and obligations, the employee must be informed about them in writing within one month of the start of the employment.
An employment contract may be terminated by: agreement, notice, immediate termination or termination within the probationary period. A contract with a foreigner or a stateless person ends when their residence permit for the Czech Republic expires, if it has not already ended prior to that date.

 

Visas and work permits

Visas:

No visa is required for the following countries to visit the Czech Republic for periods of up to 30 days: Bulgaria, Cyprus, Romania and Singapore.

For periods of up to 90 days: Andorra, Argentina, Australia, Austria, Belgium, Bolivia, Brunei, Canada, Costa Rica, Chile, Croatia, Denmark, Estonia, Finland, France, New Caledonia, Reunion, Guadeloupe, French Guyana and for periods of up to 30 days Wallis, Futuna, French Polynesia, Germany, Greece, Guatemala, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Latvia, Liechtenstein, Lithuania, Luxembourg, Malaysia, Malta, Mexico, Monaco, Netherlands, New Zealand, Nicaragua, Norway, Paraguay, Poland, Portugal, San Marino, Salvador, Slovakia, Slovenia, Spain, Sweden, Switzerland, United States of America, Uruguay, Vatican City and Venezuela.

For periods of up to 180 days: United Kingdom.

Work permits:

EU/EEA citizens: are able to live and work in the Czech Republic without a visa or work permit.
Non-EU citizens: must obtain a work visa or permit to work in the Czech Republic.

A work permit must be obtained before applying for a visa, and both documents should be obtained prior to working or residing in the Czech Republic. An application for a visa must be submitted in person at a Czech diplomatic or consular mission outside the Czech Republic. Once issued, the work permit is valid for one year. Work permits can be extended for repeated 365-day periods, provided that all conditions of the permit remain the same. A work permit is valid only if the foreign national’s position, employer and place of work are stated accurately. If any of these details change, the foreign national must apply for a new (or amended) work permit.

If a foreign national’s spouse or children accompany him/her to the Czech Republic to live in the country but not to work. Family members are not automatically eligible to receive work permits. They must, however, obtain visas to reside legally in the Czech Republic.

 

Tax, social security and healthcare

Taxation system:

The Czech income tax rate for individual's income in 2008 is a flat 15% rate. Corporate tax in 2008 is 21%. The rate of corporation tax has been reduced on various occasions to encourage economic activity (in 1992 it was 45%).

An individual pays tax on his income as a wage earner or as a self-employed person. Tax for an individual who meets the criteria of a "permanent resident" of the Czech Republic is calculated on his income earned inside the Republic and abroad. A foreign resident who is employed in the Czech Republic pays tax only on income earned in the Republic. Employers are obliged to deduct the appropriate taxes directly from salaries on a monthly basis. Self-employed persons prepay taxes that will be offset on making an annual tax return. These advances are determined on the basis of the previous year's tax return. In the case of a new business, the prepayments are calculated on the basis of estimates made by the owner of the business.

Social security system:

Everyone working in the Czech Republic is insured with the Czech Social Security Administration. Every employer is obliged by law to deduct, from their employees’ salaries, social security contributions amounting to 8% of gross salary. Employers also have to pay social insurance for their employees from their own funds amounting to 26% of gross wages.

The social security system in the Czech Republic is built on the following three pillars:

  • compulsory social insurance, which covers sickness benefits, unemployment benefit and pension insurance; 
  • state social support, by which the state participates in covering the cost of subsistence and other basic personal needs of children and families; 
  • social assistance, which is provided to people in need.


Health system:

In the Czech Republic, there are state and non-state health facilities. Nearly all of them have made a contract with health insurance companies for the provision of health care to insured patients without direct payment.

Pharmacies issue prescription drugs to patients either without charge, if the price of the drug is fully reimbursed by the health insurance company, or for a fee, if the insurance company pays only a part of the price. Medical prescriptions are issued free of charge.

Health care in the Czech Republic is provided mainly on the basis of mandatory public health insurance. Private health insurance is complementary. Entitlement to public health insurance covers those who reside permanently in the country or for employees of registered offices in the Czech Republic. Participation in public health insurance is compulsory and does not require a contract with an insurance company. However, you may choose the health insurance company with which you wish to be insured. Individuals who do not meet the conditions for participation in public health insurance may opt for private health insurance.

 

Lifestyle

Since the Velvet Revolution in 1989, The Czech Republic has continued to evolve and change at an inspiring rate. The progressive democracy is focused on improving the standard of living through investment in business and technology whilst protecting the country´s beautiful environment. Education and healthcare match European standards. The progressive tax laws makes this an attractive destination for expats.

 

Report complied: 2008
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