Doing Business in Czech Republic
Expats doing business in the Czech Republic will find themselves in one of the most developed, industrialised economies in Central Europe. The Czech Republic has taken strides in developing its economy and has moved closer towards a more Western style of business in recent years. Its ascension to the European Union in 2004, along with its central position in Europe, have made it an attractive destination for international foreign investment and a number of international corporations have their European headquarters in the country.
The automobile industry is the largest single industry in the Czech Republic and the country is one of the largest automotive producers in Central Europe. Prague is the country’s central business hub and has emerged as a centre of technology in the country with many tech start-up companies being founded there.
The Czech Republic is considered to have a good business climate, as reflected in its ranking in the World Bank’s Ease of Doing Business Survey for 2018. The country ranked 30th out of the 190 countries surveyed and came first in trading across borders for the third year in a row. It also scored well in categories such as resolving insolvency (25th) and getting electricity (15th). Despite this, the country did score more lowly with regards to dealing with construction permits (127th) and enforcing contracts (91st).
Czech, with English and German spoken and understood in some business circles
Business attire is generally formal and conservative. Women should wear business suits, modest dresses or formal skirts. Men should wear dark suits with ties. Business casual and other less formal attire may be accepted in some industries.
Hours of business
Business hours are generally from 8am to 4.30pm or 5pm, Monday to Friday
A firm handshake while maintaining direct eye contact.
If invited to a Czech home, flowers, a good quality wine or spirits are acceptable. Give flowers in odd numbers, but not 13, and avoid calla lilies as these are associated with death. A small gift from one's home country is also acceptable. Gifts are usually opened when received.
Women are considered equal and there are no restrictions on women in the workplace, although men still hold the majority of senior positions.
Business culture in the Czech Republic
The business culture in the Czech Republic is generally formal and co-workers will address each other more formally with titles and surnames, although some companies have begun to adopt a more informal approach. It’s best not to address somebody by their first name unless invited to do so, as this may be considered rude and disrespectful.
Expats may initially perceive the reserved Czech manner to be cold and impersonal, but Czechs are actually warm and hospitable people. They are generally private until getting to know someone on a more personal level, although it could take many meetings to reach this stage. Initial greetings may be formal and reserved. Czechs may be somewhat indirect and non-confrontational in their communications during business meetings. It’s not uncommon for a Czech associate to answer with a vague “we will see” or “it is difficult” (neither of which are favourable answers) rather than giving an outright “yes” or “no” response.
Business structures in the Czech Republic are hierarchical and decisions are made from the top down, although the group’s opinion may be valued and considered. Networking is very important in the Czech Republic and it is vital to build and maintain relationships. Business may be conducted slowly with initial meetings scheduled to get to know each other and ascertain the trustworthiness of associates before a deal can be made. Expats must, therefore, exercise patience.
Family is valued highly in Czech culture. Family ties are deeply rooted and family time is important. As such, it is unlikely that work commitments will extend over weekends or public holidays.
Dos and don'ts of doing business in the Czech Republic
Do be on time. Punctuality is important and taken very seriously in Czech business
Don't try to rush things. Business decisions can take time as associates get to know a person and decide whether they are trustworthy
Do shake hands and maintain eye contact when greeting
Don't broach the topic of Czechoslovakia and the politics surrounding the former Soviet state
Don't address somebody by their first name unless invited to do so
Do arrange meetings well ahead of time as Czechs are not fond of impromptu meetings at the last minute
Don't try to schedule meetings on a Friday afternoon as many senior Czech businesspeople finish early on Fridays to go to their country home for the weekend