A foreign citizen can buy property in the Czech Republic, but the laws vary according to whether or not you are a citizen of the European Union. (Please keep in mind that Czech property and tax laws can AND DO change several times each year, and these changes are typically substantial changes!).

Non-EU Citizens:

To purchase property in the Czech Republic as a non-EU citizen for either business or residential use, you typically must have a Czech limited liability corporation (called an SRO) setup in your name. Regulations vary, and change often, so be sure to contact me for the latest stipulations.

(I promise I am not trying to be lazy - in 2004 Czech tax law had no less than five major, nationwide changes. In 2006 we didn't have a government for 7 months of the year. Again, just contact me anytime so I can provide you with answers based on the latest changes to Czech law).

In any case, an SRO (limited liability company) is an essential tool for all foreigners living in the Czech Republic, EU citizens and non-EU citizens alike, because it provides a tax and liability shelter to assist you with legal compliance issues and to protect your assets - both here and at home - from litigation and fraud.

The only exception to this requirement is for Permanent Residence holders who are also married to a Czech spouse. Even if this describes you, however, I strongly recommend that all foreign investors and/or those simply relocating to do business in the Czech Republic have an established SRO for their own confidentiality and protection from litigation and fraud.

EU Citizens:

EU citizens may purchase land, except for agricultural or forest land, after acquiring the proper residence permit.

There are laws in process currently, (April 2006), that may also allow non-EU citizens to purchase property with limited paperwork and no SRO incorporation.

However, as stated above, both EU citizens and non-EU citizens with an SRO are exempt from any restrictions on land purchased at this time, and do not require a residence permit to purchase land.

An SRO is a Czech limited-liability corporation, and forming one is the fastest, most convenient, and cost-effective way for foreign citizens to establish themselves as residents in the Czech Republic with all the required visas, a tax base, health insurance, and the many benefits of being a legitimate resident.

An SRO is required for any non-EU citizen to purchase property in the Czech Republic, and highly recommended for all EU and local citizens.

Why?

Because for both EU citizens and non-EU citizens alike, forming an SRO allows you as a foreigner to purchase property, start a business, or relocate an existing company in the Czech Republic safely, legally, and with the appropriate tax and liability shelters to protect your assets both here and at home from both legitimate and fraudulent lawsuits.

Whether a lawsuit against you is legitimate or not - and often it is not - your property is at risk if you are holding it as an individual rather than an SRO shareholder.
In a nutshell, an SRO provides you with the tools you need to operate legally and responsibly as a foreign citizen, whether you reside here or abroad.

Additional benefits of an SRO include:

• You may easily form a company, small business, or perform freelance consulting and/or teaching in the Czech Republic legally and legitimately.

• You may use the Czech Republic as a legal tax base for income earned here or abroad.

• An SRO makes your yearly accounting and tax requirements simple and straightforward.

• You will more easily qualify for a Long Term Visa (non-EU citizens), health and social insurance for yourself, your spouse, children, partners and employees in order to live and work legally and safely in the Czech Republic.

• You may purchase a property in the Czech Republic for business, residence, holiday or investment purposes without restrictions that are otherwise attached to the types of property you can purchase.

Sidlo (registered office) and Jednatel (company representative or CEO) services are also provided by our office under separate contract, as both are required under Czech law for the establishment of your SRO. These services are generally temporary, until you have completed the legal qualifications needed in order to function regarding these services on your own.

Please call me directly for a complete and frank discussion on these two critical subjects: Sidlo and Jednatel.

For a very thorough discussion of these and all other SRO issues in greater detail please see our SRO in Detail page.

The most current examples can be provided, by request via email, free of charge to clients. You can also look online, these days there are about a billion Czech real estate web portals out there, perhaps more.

(Please: This discussion involves all property OUTSIDE of the capitol city, Prague, which include the regions where our office specializes: Beskydy, Brno, and Usti nad Labem. Prague properties specifically are currently some of the most expensive and sought after in the world).

Due to the internal changes happening in advance of the arrival of the Euro common currency (2010 or 2011), property prices are steadily rising in the Czech Republic and will continue to do so over the next 4 to 6 years to more closely match those of neighboring European countries, and in anticipation of the Czech Republic's adoption of the Euro common currency.

The rise is happening at a rapid pace that is gaining momentum on a monthly, not yearly, basis. Therefore, NOW has never been a better time to act if investing in this country is an important business or personal goal.

An investor can still buy businesses, land, and property for a fraction of what it would cost in Western Europe. Some examples of properties purchased recently in the Czech Republic follow (prices in USD):

• A large family house in excellent condition, outside city limits, with 18,000 sq. ft. (2,000 sq. m.) of property for $80,000.

• Large "fixer-upper" home in useable condition, needing some remodeling, outside city limits with large 18,000 sq. ft. (2,000 sq. m.) garden property for $45,000.

• 27,000 sq. ft. (3,000 sq. m.) of commercial property in a smaller town with all utilities, permits and blue prints, pre-zoned for building construction, for $30,000.

• 14,600 sq. ft. (1,800 sq. m.) of garden space near a small village, with a 50-tree fruit orchard and a cozy 3-season cottage, with city water and electricity for $5,500.

• 720 sq. ft. (80 sq. m.) apartment (flat) in Brno, 2-bedroom (2+1) with full kitchen and balcony, remodeled and in a nice area for $90,000.

• An apartment complex in Brno, the country's second-largest city, with 7 apartments, remodeled, for $440,000.

• A fixer-upper home, needing much remodeling but still liveable, on a large piece of property for $25,000.

PLEASE NOTE:

If you've been watching our site, you'll have noticed that property prices have doubled over the past year. This is due to the continued huge foreign and domestic demand for quality housing. And private home prices had already doubled once before, over the 3 years prior to EU accession (May 2001 to May 2004).

In addition, US investors especially should pay particular attention to the continuing slide of the US dollar, which makes investing more costly as well, and points to having some investments outside the US being a prudent idea! A house costing you $80,000 in US Dollars in 2003 will now cost you $160,000 in US Dollars - if the house was still be offerred at the same local price! House prices have in fact doubled in that time period, so a home you purchased in 2003 with US Dollars would be worth FOUR TIMES ITS VALUE today, in US Dollars!

Please download our most current free report on Czech Property Investments for a more thorough discussion of this issue.

Buying "to let" means first putting a down payment on a property in cash and then financing the rest with a mortgage. The owner/investor then rents the property out to a tenant whose rent payments are used to pay the mortgage and make a profit.

This, of course, can be an effective and profitable plan in the USA, Canada, the UK, etc. It can also be done in the Czech Republic if done with extreme caution, but all too often an investor is rushed into what may not be a prudent buy-to-let investment.

In our assessment, the Czech system is simply not set up for such an arrangement at this time, although this is a popular choice of investment with many UK investors especially, in the Prague market. However, we can assist you with this plan at your request, and our office does offer a full range of refurbishment, resale and/or property management services.

Please keep in mind that landlord/tenant laws in the Czech Republic are confusing and ill-enforced so problem tenants can be common, depending on the region you are renting in. Rent control laws are often unfair and not market-based. Foreign landlords are typically targeted for rental scams, including many "off plan" scams (see next question).

For these reasons and more, East Point Consulting prefers to work with investors who plan to buy property solely for investment purposes on an individual basis, and we reserve the right to refuse a project we feel is not extremely well planned according to the local realities.

Keep in mind, the investment procedure you intend to utilize and the work we may assist you with is up to you, and we will certainly help you to make it a highly successful one.

For the same reasons as those stated above in the preceding question, we do not prefer to assist investors in buying property "off plan", in other words, purchasing property before it is built in order to get a break on the price and then using that property as a rental for investment purposes.

The property may never get built, it may not be built to proper standards, property management agreements promised may not be kept, and profits cannot be guaranteed. It's simply too risky and prone to fraud.

Again, however, the investment procedure you intend to utilize and the work we may assist you with is always up to you and we will give it our full attention.

Generally, yes.

Mortgage rules do change all the time.  Here are the most recent:

Mortgages are granted to foreign residents by local banks via an established SRO (Czech limited liability company).

Banks lend more freely to long-term established entities than they do to new ones. Otherwise, they do not usually distinguish too greatly between foreign and local citizens.

In the case of a newly established business (SRO), you need to provide the bank with a precise business plan in order to assure the lender that adequate funds are available for consistent payments, a serious concern here.

If the bank approves the business plan the mortgage is normally granted under the following five conditions:

• The amount loaned will not exceed 70% of the maximum value of the property as determined by the bank's own property evaluation firm.

• Borrowers must invest their own funds at a minimum level of 15-20% of the maximum value of the property.

• The maximum lending period cannot exceed 15 years.

• The interest rate is fixed for a maximum of 5 years, after which it is recalculated by the lender.

• Interest rates currently range from 6-10% per annum.

Be sure to check regulations carefully with your individual bank of choice, and/or with our office which can help arrange these services for you.

Purchasing property in the Czech Republic follows a standard process: property search and review, due diligence, contract negotiation, deposit and payment of fees, escrow, purchase, payment of transfer taxes, obtaining government stamps and filling the deed with the Czech Land Registry.

Here's the 6-Step process we use for all property purchases, both yours and ours:

Step 1:

Call or email me personally with details about the type of property you wish to purchase, including size, location, price range, and all relevant details.

Step 2:

We will quote you a fee for our services as related to your property purchase and/or relocation, and for all additional work you need performed such as escrow services, contract formation, filing for your SRO, obtaining Visas, etc.
 
Step 3:

After doing a property search (free of charge to clients), we'll send you property reports which will be translated into English for you (at no additional cost), as email or in MS Word or PDF format.

It is highly recommended that you visit the Czech Republic to view your potential properties in person before making an offer to purchase, however, we have often purchased property for clients site unseen. It's your choice.

Step 4:

Once you have selected a property, our real estate team will perform extensive due diligence on the owner's title, structural documentation, regional regulations, costs to upgrade, and more as you request to insure that your investment is rock-solid and free of potential fraud.

Step 5:

If the property is proven to be a reliable investment, (our average is about 1 out of 3), our attorney will review and rewrite all purchase contracts as necessary. (Additional fees are not required - all contract provision is included in our standard legal fees for property purchases).

At this time you will make your deposit on the property (normally 10%) which is paid to the seller's agent and is therefore non-refundable regardless of whether you choose to cancel the deal. If a service provider promises you a refundable deposit arrangement, do not believe them!

In addition, at this time you will pay your legal fees for the transfer of sale as previously quoted to you, and pay your commission fee of 4% of the purchase price, to our office.

Step 6:

Once your paperwork has been submitted by our attorney, and all contracts have been approved, you will place the remaining 90% of the purchase funds in our attorney's holding account or the account of your choice for escrow purposes.

Once the title deed has been properly submitted to the Czech Land Registry, (this typically takes less than a week), and all real estate transfer taxes have been paid by the seller, your purchase funds will then be transferred to the seller or their agents.

The completed title is then sent to you and the purchase is complete.

Depending on the location of the property purchased, the completed land title is usually available within 8 - 12 weeks, (typically much longer if the property is located in Prague).

Steps 5 and 6 can often be combined to save time.

Please note: our office does not and will not "shortcut" the property purchase process for anyone, client or otherwise, not at any price. Please do not even ask, thank you.

Yes, as have all my partners and the employees who work for us at East Point Consulting. My personal reason for investing here is that I married a Czech in 1998, and having physical roots in this country was important for our family.

Not only have my partners and I invested here, we all advocate that our clients use the same procedures we did in choosing and purchasing our investments, because they work.

In addition, please be aware that every one of us has learned these procedures the hard way, by becoming victims of fraud at one time or another, before we developed our comprehensive structure that works so well to protect your interests, as it has protected our own.

Having our experience and local connections on your side has tangible benefits: It is a verifiable fact that our clients end up saving more money than they spend on our fees because we ensure the reliability and legality of their deals, and we protect them from costly scams that they might otherwise fall victim to.

If I had to put it in a nutshell, that's what we provide for you and that's the most critical reason to hire us on for your project.

Since I perform all of the consulting for our foreign clients, I am of course asked this question often, and therefore I requested that I could answer it for you here on the website:

It is my opinion, based on 9 years of working with the Czech Republic including 4 years of being based here full-time, that investing, living and especially working here can be quite challenging and stressful for foreigners.

That does not mean that your goals here won't be a fabulous success: it just means that you'll need to step into this new environment with your eyes open, and with a keen understanding of the facts or you leave yourself open to painful and costly disappointment.

This is a very different culture from the one you are used to. The people and their customs are different and very hard to adapt to if you are used to more western ways of conducting daily life and business.

The way business and family (and religious) life are conducted here is uniquely Czech and foreigners are often treated as outsiders. And the other expats living here will often surprise you with their reasons for being here, some legitimate and above board, some not.

You will find that learning the Czech language is a challenge, and as a result many foreigners will gravitate towards the English-speaking expat communities in the larger centers.  This common practice isolates you from the local culture even more, and is frankly not available outside the major cities where I personally do not prefer to live, (as the countryside is cheaper and magnificently beautiful, while the cities are, well, they are cities).

And, as has been mentioned, fraud is such a large concern here that it must be constantly guarded against in business deals and in everyday life. From buying property to having your watch fixed, no activity is exempt.

For parents and the health-minded, I feel it is also critical to mention health issues, as they have been the number one major issue in my own life and experience here. For one, healthy food is difficult to find, expensive, and the variety of fresh produce and healthy products available is simply not what any westerner is used to, or may require.

More importantly by far, all cultural activities in the Czech Republic without exception tend to center around an overuse of alcohol and cigarettes.

Smoking is vigorously practiced nearly everywhere without exception, (non-smoking signs are ignored), and cigarettes and alcohol are freely available even in places where children frequent such as pastry shops, internet cafes and even schools.

It is also common practice to ignore the age limits for the purchase of such items, so smoking tends to begin here at around age 14, and drinking soon after for the average Czech person, male or female.

In a nutshell, while this country is an amazing and wonderful place to visit (see next question), it is not the easiest place to live and work as a foreigner, depending of course on your own habits and/or needs.

I personally like to advise most foreign clients to invest here only if they have a compelling and personal reason to do so, or if they feel that it is simply the finest opportunity available for their investment dollar, which in many cases it truly is: this country has an educated populace, a superior infrastructure and at a price that is less than 1/4th that of many neighboring countries.

It is a very profitable place to conduct business if one has an experienced firm handling initial relocation and all the legal details. It is also a hands-down beautiful place to live and to find a life partner if that is a priority for you. (I mention it because not only myself, but several clients have done so, rather surprisingly).

If you don't have prior experience living here, purchasing property, or starting a business, then I do advise you to carefully consider what lies ahead. And of course be certain to get expert advice and assistance from people you can trust to level with you, and tell it like it is with no icing on top, such as our firm will.

The Bottom Line:

After running this business for so many years and dealing with literally hundreds of investors, we have never lost a client's money. Our success rate for jobs is 100%.

However: nearly 80 - 90% of our clients, once being successfully setup in-country by our firm, have gone on to lose substantial investments due specifically to fraud while dealing with local agencies, firms, and/or individuals on a new investment project and/or large purchase.

Most clients we help to get established here end up leaving within an average of just 2 years. Tragic, but factual nonetheless. I myself have also left the Czech Republic, which I love dearly, for similar reasons.

That is why our firm exists to help people like you make your decision, either way, and then to carry it through legally - affordably - and securely.

As challenging as it may be for foreigners to invest, live and work in the Czech Republic, traveling through this beautiful country is a dream come true, and I would enthusiastically recommend it to everyone.

Let me give you just a handful of the best reasons why:

For one, it's beautiful. Stunning in fact!

Prague has the well-deserved reputation of being absolutely gorgeous, with its many examples of renaissance and Gothic architecture, medieval streets, bridges and the largest castle in the country.

But the Czech countryside, in my opinion, is where the real charm of the country lies. Spectacular settings for hiking, biking, camping, picnics and romantic getaways abound in the lush forested mountainsides throughout the east, and the west boasts some of the loveliest towns I've ever seen such as 14th century Cesky Krumlov.

For two, it's cheap!

The cost of living here is about 1/4 that of California, and about 1/6 that of Western Europe. That translates into great travel deals: $8 train tickets, $15 hotel stays (outside the city of course), and hearty $3 meals.

I've traveled CZ extensively by bicycle on $10 a day and had no problems stuffing my face and finding a good place to camp; a budget of $25 a day should easily cover a night at a local penzion and a few bottles of wine.

For three, the people really can be great when you get to know them.

As hard as Czechs can be to deal with in business, they really open up in the social arena once you get to know them. Czechs put a very high priority on enjoying life and that includes ample time with family and friends.

You'll never feel unwelcome, or that your hosts are in a hurry to end the evening or weekend (or the week, as the case may be!)

Of course I married a Czech, and have found in her the homestyle values and country charm that I longed for but could not find while dating back in California. People often ask me about the possibility of finding a mate in a country that has those 'old-fashioned' family values, and I can honestly say that if this is what you are looking for and you're willing to spend the time here, you will find what you are looking for.

Four, travel is practical, the fares are cheap, and a private getaway is very easy to come by.

The public transportation system in CZ is the best I've ever seen. One can get from anywhere to anywhere using the amazingly comprehensive system of trains and buses, with a taxi ride thrown in here and there for convenience when necessary.

The system runs every day of the year and is incredibly cheap by western standards, running an average of just 50 cents for a local bus ride, $4 for a local taxi ride for up to four people, and $8 for a train trip across the country.

But the very best part of traveling here is that you can enjoy all of this in total privacy, without fear of being hassled by your neighbors or an angry police officer demanding a permit for everything but the color of the shirt you have on.
 
The Czechs put a very high value on personal space, and thus unless you are really trying to call attention to yourself, it is quite easy to slip away into the forest, throw a tent down by a stream, and enjoy a quiet night gazing up at the stars - free of charge and free of permits and parking hassles. You just take a train and then walk a few miles outside of any small town to find great camping spots.

And finally, it's Europe!

Whenever I'm totally stressed out from work, I just take an evening walk through the 700-year-old church and castle in my city, and marvel at the simply magical feeling of it all. This is Europe, after all, and the charms of the 'old world' abound - they are found in the most spectacular buildings and equally in the simplest cobblestone streets where scores of famous people throughout history walked before you.

And of course, never forget that the Czech Republic is located smack in the heart of Europe: Krakow, Vienna, Munich and even London are only hours away by car, train or airplane. And due to its low prices, it makes a fabulous "home base" in which to stay while you explore other towns on weekend trips.

Come see it! Whether or not you invest, you owe it to yourself and your family or friends to take an extended holiday in this magnificent, one-of-a-kind country.