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For More Information Please Call: |
Czech: 420-775-054-107
USA: 562-372-2193 |
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20 Commonly Asked Questions (and Answers)
About Investing in the Czech Republic & Our Services
This special section includes straight-talk with our Key Accounts Manager, David Showalter, about investing, living and doing business in the Czech Republic specifically as a foreigner. If your question isn't answered here, please contact us free of charge.
Reading time for this section is about 15 - 20 minutes.
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Common Questions About Our Services: |
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1) What exactly can your company do for me? |
East Point Consulting is a full-service investment and relocation company for foreign (non-Czech) clients who want to live, work and/or invest in the Czech Republic.
We will help you, your family and/or your company to invest, purchase property, start a business, obtain proper visas, secure transportation and communication, establish personal and corporate tax structures, and much more based on your individual needs.
In short, we will help you relocate to the Czech Republic legally, confidentially, and within a sensible budget that is worked out with you in detail, in advance.
Please note that an integral part of our firm's focus is protecting your project from investment fraud which is commonly directed at foreign investors in this country's poorly-regulated financial environment. We also strive to insure that all your investments meet all Czech legal and tax requirements, and proceed in line with all local business regulations and cultural norms.
Our fees are comparable to (and often better than) all other domestic agencies that offer these services.
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2) Can you give me an example of the kind of work that you do? |
Sure. Let's say you have a thriving business in the USA, and you'd like to relocate it and your family and/or employees to the Czech Republic in order to drastically cut your production, labor and cost of living expenses.
Step One is a thorough consultation free of charge to discuss your goals in the Czech Republic and how we can help you reach them. If you're satisfied with the services we offer, and we can take you as a client, we'll establish a budget and give you an estimate of the full costs of your entire project within 5 working days.
Step Two is to begin the process of establishing a local corporation (SRO) for your company or individual concerns, set up its initial tax structure, apply for visas for you and your family and/or foreign employees, rent a local office space and make living arrangements for you, your family and/or staff, acquire health insurance, set up communications, etc. based upon your specific needs.
We also begin the process of relocation including furnishing apartments and offices, hiring local employees, contracting with local service providers, arranging transportation and meeting all other moving and settling-in needs you may have.
EPC will also search for properties for you to purchase for living and/or investment. We do not charge our clients for these services. The typical fees other agencies charge for a property search varies from 45.000 to 100.000 CZK ($2,000 - $4,500 USD). Our office also handles all contract proceedings including escrow, legal filings and title transfer, furnishings, repair, reconstruction and communication needs, etc.
Step Three includes providing full relocation assistance for all members of your family or business team. We will help you assimilate into the local culture, find good schools for your children, help with the language, money, shopping, banking, buying cars and other challenges so you can enjoy your new home in the Czech Republic with minimal culture shock, downtime and expense.
Please view our Client Testimonials page. |
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3) How will I benefit from choosing East Point Consulting? |
The following 10 benefits to you are what make our firm unique:
#1 - Experience: |
Czech legal and tax requirements are often tedious and hard to understand, fraud is common, and the legal system here is not user-friendly.
East Point Consulting has over eight years experience helping foreign citizens to invest legally and securely in the Czech Republic. Our success rate is 100% - we have never lost our clients money.
We also carry out 100% of our clients' projects according to both Czech tax and legal regulations and the unspoken rules of the local business culture, to insure a dependable long-term relocation and/or investment. |
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#2 - Complete Service: |
Our firm includes a real estate agency, relocation team, an escrow service, two attorneys, a tax professional (CPA), a structural engineer, a full construction team, and an I.T. communications provider - giving you a single trustworthy and English-speaking point of contact for your entire project. |
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#3 - Ease of Contact: |
When you call East Point Consulting, you'll always talk directly to the Key Accounts Manger, in plain English: Mr. Showalter is a native English-speaker from California, whose primary responsibility is working with our foreign clients who have access to him by mobile phone every day of the year. |
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#4 - Personal Attention: |
We are not corporate: our office accepts only a strictly limited number of new clients per year, so you get our undivided attention without the corporate treatment. We often work with a single client exclusively for an extended length of time (generally about 6 months) in order to expedite the completion of their project. |
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#5 - Zero Conflict of Interest: |
None of the partners or employees of East Point Consulting represent any other investment group, real estate firm, property developer or religious organization, which means our loyalty is to you and your project needs alone. |
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#6 - Fraud Protection: |
East Point Consulting operates within a strict legal and operational framework that assures complete confidentiality, and focuses on protecting your project from investment fraud, still the most serious issue facing foreign investors in post-Communist Eastern Europe. |
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#7 - Professional Focus: |
Since the Czech Republic's admission to the European Union investment in this country has dramatically increased, and so has the number of Mormons, Jehovah's Witnesses, students, university teachers and other "experts" offering "investment" and "real estate services" to foreign clients.
East Point Consulting is a professional firm.
All of our employees and partners are full-time members of this firm with professional qualifications and legal credentials. Our local staff are established, experienced and committed to giving your projects the full-time attention they require and deserve. |
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#8 - High Standards, No Games: |
All of our services and terms are stated clearly and are provided under the professional standards of our trade. When you call us with questions, you'll get answers. No games, no runaround, just straight-forward answers in plain English. Call us free and see for yourself. |
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#9 - Competitive Fees, Flexible Terms: |
Our fees are fair and competitive, and we do not pad our bills with unexpected charges. Your fees are always discussed up front and you will receive an accurate quote for services before work begins.
We offer flexible terms of payment in a variety of currencies and payment methods including U.S. check, international wire, local deposit, Visa/MC, PayPal, etc. |
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#10 - Consistency, Tenacity, Reliability: |
We didn't come this far and last this long in such a highly competitive, uncertain and fraud-ridden local environment by letting our clients down.
When you hire East Point Consulting you get a team of experienced, licensed professionals who are totally dedicated to your project's success and to your complete satisfaction with the results.
Our eight-person team is comprised of six Czech professionals and two Americans who have permanent residence in the Czech Republic. We're not passing through, we're here for good. So you can rely on us to do the job right.
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4) How are you qualified to help me? |
As the Key Accounts Manager for East Point Consulting and the writer of our website, I (David Showalter) provide all of our foreign clients with a contact person they can deal with directly, in plain English.
But I am also a foreigner myself who moved here, started a business and bought property in the Czech Republic, and I've been dealing with life, work, family issues and investment challenges here for 9 years, including 4 I spent as a full-time permanent resident married to a Czech.
I've experienced firsthand all the trials and tribulations of investing in a country that is not my home, and which is still adapting to the free market after a very dark period of their history. And my previous years running my own successful business in California did not prepare me for the kinds of challenges I would run into over here. It's a 'new world' in the Czech Republic.
As for my local partners and all the employees who work with me at EPC, all of them are Czech citizens with professional degrees, legal certifications and many years of experience in their fields.
In addition - and this is important - all of them have worked with foreign clients for many years, which is something of a rarity in this country and is one of the reasons our company provides such effective service. This is because my partners and our employees understand and comply with the kind of service our foreign clients expect.
The company owner, who is in charge of all property reconstruction and management services, is the only other foreigner (US) on our team.
Our only goal is to help you achieve your goals, and that includes helping you to decide - free of charge - whether now is the right time for you to invest here.
Please read about our team and why I started this company on our About Us page. |
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5) Do you provide help with obtaining visas for non-investors? |
Unfortunately not. Let me explain why:
Nearly all of our basic services are provided to clients at or near our cost, (including SRO Incorporation, Visa Applications, Corporate Tax Registration, Property Searches, Purchase Contracts and Property Title Registration, Sidlo Provision), or at the lowest legal rate, (Jednatel services). You may notice that we don't charge any fee to our clients for property searches, while the same service can cost $2,000 - 4,500 with other firms.
This is because we are primarily a relocation company, and thus we earn our profits on the hourly charges and commissions earned through the relocation services we provide for our clients. This, experience has shown us, is the best way for both ourselves and our clients to come out on top with fair value for a professional job.
Therefore, we must unfortunately direct everyone looking for visas for any purpose besides investment or relocation to their local Czech Embassy. We regret that we are unable to answer emails or phone calls on visa queries from non-clients. Thank you for your understanding, as I know first-hand that this can be an emotional issue for some, and we wish you the best of luck. |
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Common Questions About Investment Risks in the Czech Republic: |
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6) Why is fraud such a big concern in the Czech Republic? |
When it was an Eastern Bloc country, Czech authorities often looked the other way when local individuals and companies tried to get ahead by defrauding foreigners.
Even after full independence (1992) and the country's recent integration into the European Union (2004), the casual acceptance of fraud against foreign investors and the lack of enforcement is still, unfortunately, alive and well (although the situation has certainly improved with EU membership).
Points to note for the year 2006, are that the Czech Government was fully operational for only 5 out of 12 months of the year, (and is still non-operational at time of this writing), and the Czech Republic was listed as having the "Highest Corruption in the EU". Not notations of distinction, to be sure, so it sure pays to error on the side of caution. A short list of some of the many frauds our office has dealt with include:
- A property is not being sold by the real owner, but by a tenant who has bribed someone at the land register to provide false documentation listing him/her as the registered title owner.
- A property has liens against it which prevent the completion of the sale, but this information is not discovered until after the purchase funds have been transferred to the seller or their agents.
- A property has been sold before, and the original owner is trying to sell it a second time to another buyer.
- A real estate agent has collected multiple deposits on the same property from multiple potential buyers. Whether or not the property is actually ever sold, the money investors have placed as deposits will not be returned.
- A property is owned by the seller, but the land upon which it sits is not, or vice-versa. Again, this information is usually discovered only after the purchase price has already been placed with the seller.
- After completion of sale, the former owner gives the keys and contract rights to another family - not the buyers - to move in and live in the property permanently and rent free. The process of solving tenant issues can take upwards of 3 years or more and cost thousands of dollars in legal fees, and there is no guarantee you will win even if you are clearly the owner of the property.
- After completion of sale, a relative of the seller contests the sale in court and demands the property be returned to the original seller - without return of the purchase funds - until the case can be resolved. (This also can take literally years to solve).
Understand that 'taking it to court' isn't a reliable option here. Czech courts have very little experience settling civil or commercial cases and it can take years for a case to even be heard. Thus investors must be aware that litigation is simply not a viable course of action in this country.
So here is our bottom line on avoiding fraud:
There is a proper procedure for accomplishing your goals in this challenging business environment as a foreigner.
You need experienced people on the ground to help you avoid costly delays, legal snares, and worse. Going it alone, with no prior business and/or legal experience in the Czech Republic is not a prudent or effective option for those wanting to achieve their goals with success, or with minimum delay (or fraud).
The wise foreign investor will hire a trustworthy local consultant firm that has the experience and local contacts necessary to get the job done right the first time, and to protect your interests in every deal.
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7) Can I trust real estate agents in the Czech Republic? |
There are honest and hard-working real estate agents throughout this country, of course, but the fact remains that there is no training or accreditation required to be a real estate agent in the Czech Republic.
Absolutely anyone can (and does!) sell real estate in this country.
Be aware that anyone can represent the buyer, seller, (or both parties without their knowledge!), and/or any investment firm, developer, religious organization or property company to you as the investor without any of the following:
- No accreditation
- No functioning oversight committee to monitor local agents
- No functioning "peer council"
- No education or training in real estate
- No degree or certification
- No standards to meet
- No incorporation required
All that is required under Czech law is a $40 local business license, and even this is typically overlooked.
In addition, it is common for real estate "agents" to team up with "lawyers" who are also not licensed attorneys, but paralegals or law students - or simply a relative looking to cash in on the deal by providing a hammed-up contract.
Now you can see one clear reason why choosing your investment representatives carefully plays such an essential role in your property purchase, and all of your investment goals, in the Czech Republic. It's a minefield out there and you can't depend on local real estate agents or even your local attorney in many cases to help you avoid the biggest risks.
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What are the risks of not using an agency such as yours to assist me with my investment? That is, what does it matter if I simply 'go it alone' on my investment? |
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This will take a bit of time to explain, but is absolutely essential for you to understand. If you read nothing else on this site, please take a moment to read this section.
Even with this country's well-deserved reputation for fraud and investment scams, we see foreign investors still trying to go it alone here without experienced and trustworthy local help. They think they will save money, and that the experience they have in their home country will apply here.
The crucial mistake in this line of thinking is the basic (wrong) assumption that the Czech real estate agent, lawyer, developer, investment firm, etc. one hires will look out for the client's best interests in the deal, and/or actually take the precautions necessary to protect them from faulty deals, scams or fraud.
That can often be assumed in the West, but it is not a reality here, as this is simply not how Czech culture operates.
In point of fact, this common misunderstanding is the single most common reason why foreign investors fail in this country and often lose everything. I explain:
In the Czech Republic, professional service providers earn a profit by providing you with the opportunity to spend your money, not by researching whether or not the opportunities you have chosen - or they have recommended to you - are in fact safe, legal or a good investment.
They assume that's your responsibility, and they act accordingly: simply performing the work you have requested and paid for, regardless of whether they feel it is conducive to your stated goals or is a safe investment for you.
Ask any foreign investor who has done work in this country, and this will likely be the first thing they mention, because it comes as such a surprise to most foreigners from Western countries. Yet this is a critical concept to understand about Czech business.
In the Czech Republic, looking after a client's best interests is simply not an obligation encouraged or commonly expected within the local business culture. I have countless horror stories from foreign investors that prove this rule, and often, it's because the local service provider they used pushed ahead with a deal even when they knew it was not in the client's best interests!
Was this some attempt at client fraud? No. It is simply that the client requested the work, paid for it, and in this culture it is not the responsibility of the service provider to question the client or provide them with information outside the scope of their work - even when it is known that a problem exists that could kill the deal!
Furthermore, these professionals are protected by the ineffectiveness of Czech law. This means that in practice they have zero legal liability for the success or failure of the work you have contracted them to perform, at least which can be effectively enforced.
In their defense, the service providers I mention are not usually trying to rip off their foreign clients, although this does happen.
The point is simply that they are required by the expectations of this culture simply to perform their job and nothing more. They are not responsible for the success of the work performed, nor honestly can they be because of the challenging nature of doing business in a culture where simply: "the buck stops nowhere." In other words, where no one has any legal or cultural accountability in a business deal.
The concept of accountability, which we rely on so heavily in the West, is simply not a common term embraced anywhere in the Czech business, legal, public or private sectors at this time. It just doesn't exist.
(I have heard many critics crying "foul" at this statement, but it is nonetheless a simple fact. Anyone who would tell you otherwise simply has no real experience doing business in the Czech Republic).
The fact is what it is. Therefore, one must act accordingly by researching and defending one's own best interests, not counting on another - even a hired service provider - to do so.
And as such, as you will very quickly learn, it is common practice for many local service providers to be focused primarily on receiving their fees - period - and once paid, many will stop all work altogether and then play the disappearing act, consistently being unavailable when you call and pushing completion of your job to the back-burner.
Again, nothing personal, that is simply the way things operate here. The concept of repeat business is simply not yet widely understood or accepted in this society, and in their defense, local service providers are often burned when they complete a deal before payment has been made because the local clients often don't pay and collection is near impossible.
Add this all together, and you have an environment in which many local service providers will often push you toward properties and business deals on which they make a fat commission but have done zero research, without revealing this conflict of interest to you.
With no legal or cultural accountability for the success of your deals, there is no reason not to simply focus on their own wallet, and ignore the success of your particular deal.
We have found this situation described above to be extremely common. Hence, I started this company and it has been extremely successful. But back to the point:
As previously stated, and as any Czech business person will confirm for you, taking it to court simply isn't an option here if something goes wrong. So you have to get it right the first time, or the money's simply gone.
Finally, it is important to understand that because of the differences in wages between Western and Eastern economies, a foreign investor will often underestimate the lengths to which some people will go to rip you off and the paltry amounts of money that are gained at the expense of an investor's entire deal.
This may not necessarily be the service provider whom you have contracted to perform a task, although that can happen, but it may be their secretary or temporary office assistant. These low-paid workers typically suffer very poor working conditions, for which they earn less than $400 a month (even as little as $300 a month after taxes are paid), and a little 'extra' money from a 'rich foreigner' can go a long, long way.
Example: One British investor lost $160,000 in a land office scam. The crook's gain? About $2,000.
Please take our advice: if careful fraud prevention is not part of your business plan, then being a victim of fraud will be part of your future here - guaranteed.
In addition, if proper local procedures are not followed - with full reverence to the way locals conduct their business deals in this culture - then one can expect lengthy delays, legal screw-ups, sabotage and other costly and frustrating situations that we have often watched sink a project entirely.
Don't go it alone in the Czech Republic thinking that you will save money - you won't. Play it safe with your money and your sanity: get an experienced team to help you keep things safe, smart and legal, and to look out for your best interests in every deal. |
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Common Questions About Our Fees: |
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9) How do you determine your fees? |
During your free consultation, we answer all your questions, determine your needs and decide whether our services are a good fit for your project. Our office will then provide you with a fair estimate of the total costs for your relocation, including basic services, any commission fees and professional services, and other expenses that we estimate your projects may require.
Total costs (provided here in US Dollars) can range from as little as $8,000 for a single incorporation, to $50,000 or more depending on the duties required and the size of the family or business being relocated.
Typical single-family or small business relocations range from $6,000 to $10,000 total cost, including all basic services such as SRO, property search, visas, etc.
If that's out of your budget range because you are an individual or small family in need of relocation information, please note that you may still call our office anytime for free information and a full free consultation.
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10) How do your fees compare with the fees of similar agencies? |
Our fee structure is very different from all other agencies that we are aware of.
Our guiding philosophy is to allow our foreign clients to pay only for the services they need at the time they need them, and to offer "no surprises" on their billing statement - a common problem in this country's business environment.
We also perform most basic services at or very close to our cost, including SRO incorporation, visa applications, corporate tax registration, purchase contracts, property title registration. This method works well for us too because we earn our profits on the hourly fees and commissions we charge for our relocation, tax and legal services once you've decided to make the move.
For example, we perform property searches for our clients at no charge. This can save you between $2,000 - 4,500 USD compared to other firms who want a fistfull of cash up front before they'll even look for a potential property for you.
This user-friendly fee system allows you to pay only for the work you need done, when you need it done. This way, if at some point in the process you decide to cancel your plans and not to invest in the Czech Republc, you risk only a small investment compared to the flat fees that most other companies charge right up front.
We have found that by performing our basic services for you at the lowest possible rate, you get to experience our highly personal, professional service and will want to keep working with us. In fact, nearly all of our clients have become repeat customers over the years for that reason.
Please see our fees page for our current fee chart. |
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If your question isn't answered here, contact us directly at:
GetHelp@EastPointConsulting.com |
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