Rutland Je~ek, law firm based in the Czech Republic on a new important institute of the Czech Immigration law.
The President has recently signed a new amendment to the Czech Immigration law, which substantially changes the current legislation. This law shall become effective 15 days after it has been officially published, which shall occur in the following days.
Among many other changes the new immigration legislation introduces the possibility to obtain a long-term residence permit for investors (hereinafter the "Investment visa"); whereby the term investor (the "Investor") also includes shareholders or directors of a company which fulfills the criteria described below. Such instrument has been missing in the Czech immigration laws so far and it might be of interest to those who seek to obtain a visa within the Czech Republic via an investment.
REQUIREMENTS
There are several conditions, which need to be fulfilled for getting the Investment visa; the most important are the following:
- The Investor has to create at least 20 full-time jobs (for EU-citizens) and keep them operating at least for the duration of the Investment visa;
- The Investor has to make an investment in the amount of at least CZK 75.000.000 (approximately EUR 2.850.000 or USD 3.250.000), whereby the whole amount does not have to be invested in cash, up to 60 % of this amount can be provided through assets (tangible or intangible)– e.g. machinery, real property, know-how etc.
- The Investor has to propose a business plan regarding the investment.
There are some other basic conditions, which the Investor needs to fulfill such as proving indebtedness clearance; have a clean criminal record; provide its financial statements for the last 2 fiscal years and other requirements; mostly formal; in order for it to obtain Investment visa in the Czech Republic.
In case the Investor fulfills the criteria described above, then, regardless of its legal form, its executive directors and shareholders are entitled to receive the Investment visa. However, executive directors of a company which would have more than 5 executive directors; or shareholders of a company who would hold less than 30 % share on such company need to prove that their presence in the Czech Republic shall have a substantial impact on the business of the respective company. This is to prevent the misuse of the Investment visa.
MAIN ADVANTAGES OF THE INVESTMENT VISA
Since the above-mentioned requirements are rather strict, one might ask if the Investment visa is "worth it". The investment visa indeed has many advantages over the usual long- term visa for purposes of business.
First of all, the process of applying for the Investment visa is at least twice shorter than if applying for long-term visa for the purpose of business. It shall take no longer than between 30 to 45 days to get an Investment visa (as opposed to 120 days when applying for a long- term visa for the purpose of business). It also applies to passive shareholders and its validity can last up to 2 years.
Additionally, unlike applicants for long-term residence permit for the purpose of business; the applicant for the Investment visa does not need to reside in the Czech Republic prior to the filing the application (e.g. based on long-term visa for the purpose of business).
Another important advantage is the fact that the family members of the applicant can immediately obtain the long-term residence visa as well (for family reunification purposes). Even though the family members of the holders of employee cards or long-term business visas can also obtain such reunification permits, they are not able to obtain them immediately and need to wait at least 6 or 15 months respectively, before being able to apply for long-term residence permit.
The applications for the long-term residence permits of the family members of the Investment visa holders shall be also issued faster compared to other types of family reunifications. The long-term residence permit for the purpose of family reunification is valid for up to 2 years and shall be issued within only 90 days as opposed to 270 days in cases of family members of holders of long-term residence permits for the purposes of employment or business.
BRIEF COMPARSION WITH OTHER INVESTMENT INCENTIVES ACROSS EUROPE
Many other countries in the EU offer residence via investments, for example Hungary offers residence to those who buy at least EUR 300.000 worth of state-issued bonds. Greece offers residence for an investment in real property exceeding EUR 250,000.
Spain offers a residence called "golden visa" for those who invest over EUR 500,000 (via either state-issued bonds or a real property). Residency in Portugal may be obtained by real estate investment of EUR 500,000.
Unfortunately compared to those options Czech Republic conditions are rather strict and are suited mostly for big investors who have specific reasons to invest here (i.e. buying commercial real estate or industrial enterprise).
In case you do not fulfill the financial criteria to obtain the Investment residence permit, do not give up, you can still obtain business visa for mid-size and small-size entrepreneurs, although be advised that obtaining a business visa in the Czech Republic is not an easy task, but may work for example in case of buying an existing small business with Czech employees.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
