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Featured Language: Czech
Doing Business in the Czech Republic
The Czech Republic is geographically small, with 10 percent of the population and most decision-makers concentrated in the capital city of Prague. It is a market where good personal relationships are crucial, and everyone seems to know everyone else. U.S. firms attempting, from a distance, to build the close network of contacts and relationships needed to penetrate this market will usually find it to be a time-consuming and costly process. What follows is an overview of some of the tips offered by the U.S. Export Assistance Center for companies interested in entering the Czech Republic.
- Consider teaming with Czech partners as a market entry strategy. For example, U.S. firms seeking to market environmental protection or other engineering services will be unable to compete for many Czech government or EU tenders without a local partner.
- Czech consumers and firms are very price-sensitive. In the consumer market, however, increasing incomes and the wealth of products in the market have led to a shift toward prestigious name brands for certain high-end goods. U.S. firms are up against European competitors, who have lower transport costs and (usually) lower import duties, as well as Czech firms that have home field advantage.
- If you wish to establish an office of your own, you must register your company at a local district office. To accomplish this, we suggest you work through a local service provider and attorney. Prague has a well-educated, multilingual population, many of whom have years of experience in working for Western firms. Companies offering attractive salaries can normally secure a talented nucleus of local staff for a new office.
- As in most markets, it is best to consult with local professionals before embarking on major ventures. There are many U.S. law firms, accountants, and consulting firms that specialize in helping with market entry based in Prague. The U.S. Commercial Service maintains lists of these firms, available upon request. U.S. companies new to the Czech market should join the American Chamber of Commerce in Prague.
- The Czech Republic is a small market, and each sector has a few key decision-makers and opinion leaders. One way to reach these leaders quickly is to hold an innovative in-country promotion. Examples of good programs include technical seminars or small receptions at industry trade shows in Brno and Prague, media events and press conferences related to events like launching new lines or opening new offices, or annual holiday receptions for key clients and potential clients. On the retail side, in-store promotions are utilized extensively.
For more information about entering the Czech Republic market, refer to the sources used to develop this article (listed below), or, access this issue’s Useful Links.
Sources:
U.S. Department of Commerce
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