By Uglobal Staff
The Czech Republic has launched a new investment visa to investors outside of the European Union. Compared to current visas offered by the country, the new investor visa is making it easier for family members of investors to join in the move and processing time for the visa has also been streamlined to only a month.
However, the renewable two-year visa comes with a hefty price tag. It’s available to investors from non-EU nations who commit 75 million koruna (about $3.4 million) to fund a project that creates and maintains employment for at least 20 citizens of the Czech Republic or other European Union member states. That’s a bigger task than many other investor visas: Germany’s entrepreneurial visa program requires an investment of just 1 million euros ($1.2 million) and the creation of 10 jobs, while Hungary’s program requires just a 250,000-euro ($300,000) investment.
The Czech program does allow a single investment to be used to generate multiple visas for shareholders and directors. Still, companies seeking visas for more than five directors, or for shareholders with less than a 30 percent stake in the business, will be required to show that applicants are directly involved in the funded project.
Some immigration lawyers say they have yet to receive serious inquiries from clients relating to the new visa, and that it would take at least another several months to gauge the degree of interest in the program.
“I do not expect an influx of investors,” says Jan Grozdanovič, managing partner of JGA Legal in Prague.
Besides winning the approval of the Ministry of the Interior, which handles immigration issues, applicants will also need the Ministry of Trade and Industry to sign off on their business plan, to ensure new projects deliver real benefits for the Czech economy.
Preparing investment visa applications might be a challenge, agrees Mirek Mejtsky, a partner with Prague law firm Petyovsky & Partners. The fees involved are nominal, but there’s significant paperwork, with would-be investors expected to provide not just a business plan, but also a detailed risk assessment, clear targets for future growth, past financial statements, and in some cases a detailed accounting of the origins of the funds to be invested.
However, there are a number of potentially easier alternatives open to prospective investors, says Lenka Morávková, who handles immigration issues for Czech law firm Rutland Ježek.
The business visa currently used by many entrepreneurs will remain in place, as will two separate programs, administered by business development agency CzechInvest, that offer larger corporations a quick and relatively easy way to secure visas for foreign workers.
There are advantages to the new visa. The Czech Republic’s standard business visas can be hard to secure, with applicants subject to intense scrutiny by the Interior Ministry, while a recent rule-change has closed a loophole that previously allowed investors to sponsor themselves as employees of newly established companies.
For qualified applicants, the investor visa potentially offers a more streamlined alternative to business or employment visas. Delays are still possible, but officials have promised to process applications in just 30 days, compared with 90 days for business-visa applications.
Investor visa holders can also apply to bring their spouse and dependents with them under a family reunification visa, allowing almost immediate entry into the Czech Republic. That’s a big improvement on the standard business visa, which can force visa-holders to wait more than a year before being joined by their family. “The investor visa is quite advantageous for family members of investors,” Morávková says.
And while the program’s expense and restrictions will likely limit its appeal, that could prove beneficial for investors who do take the plunge. The Czech Republic is one of Europe’s most restrictive immigration jurisdictions, Morávková explains, but officials are now under pressure to demonstrate to Czech voters that the new investor visa was worth implementing.
That could mean ministry staff will be more inclined to wave through potential investors, at least while the new program is finding its feet. “The ministry wants to have good statistics,” Morávková says. “If there are only a few applications, they'll probably all be approved if they meet the basic requirements.”
The bottom line, says Mejtsky, is that investors will need to carefully weigh the pros and cons of the new visa, relative both to the Czech Republic’s other immigration pathways, and to less restrictive programs in other European jurisdictions.
