We describe the difference between the “business visa” extension and the “business residence permit” in our previous article (read it here if you wish: https://movetoprague.com/long-term-visa-extension-vs-long-term-residence-permit/). This article is specifically about the Czech business residence permit and it’s extension.
PLEASE MIND THAT THE MINIMUM REQUIRED INCOME HAS INCREASED FROM 1.7.2022! GET IN TOUCH FOR MORE DETAILS.
What does “business residence permit” mean?
First of all, when we talk about Czech “business residence permit”, we mean a long-term residence permit with the business purpose of stay (freelance or ownership of a llc company). Since freelancing is the most common scenario in our daily practice, we focus on freelancing in this article. If you want to know more about the business residence permit based on owning a limited liability company in the Czech Republic, get it touch with us directly and we’ll be happy to explain everything.
Technically, the business residence permit is a plastic biometric card which allows you to stay in the Czech Republic for up to two years and freelance here.
Who can apply for the business residence permit?
The business residence permit can be applied for in multiple cases:
1. As the next steps after getting the business visa.
If you are moving to the Czech Republic to freelance or as a business owner, the first step is always getting a business visa. Maximum validity of the business visa is one year so, if you want to stay longer than one year, you must apply for the business residence permit before your visa expires.
2. After five years of legally residing in the Czech Republic.
One of the previous changes in the immigration law also brought this “great” change – you can only change the purpose of your stay in the Czech Republic to business after five years of legally residing in the Czech Republic. Honestly, we can not see why would someone do that if, in most cases, you can apply for a permanent residence permit (which gives you way more benefits) after five years of living here. But, we have had such cases so we guess there are reasons. Either way, you can only apply for the business residence permit if you have been living here for at least five years.
3. As the next step after getting the job seeker residence permit.
One of the few exceptions when you can apply for the business residence permit sooner than after five years of your legal stay in Czech Republic is if you are under the “job seeker residence permit“. As explained in the linked article, the “job seeker” residence permit also applies to those who want to start their own business and who are actually not looking for employment.
4. After breaking up with your EU partner and loosing the “partnership visa”.
If you break up with your EU partner while being under the Temporary Residence Permit for family members of EU citizens (“partnership visa”), you have to report this to the MOI. They will eventually cancel your “partnership visa” and give you 60 days to leave the Czech Republic (leaving order). You can actually apply for some other type of residence permit (i.e. the employee card or this business residence permit) within this period and stay in the Czech Republic until the decision is made.
What are the basic requirements for the business residence permit?
If you meet one of the above conditions and have a trade license already, you can technically apply for the business residence permit. If your application is successfully approved or not depends mainly on two things:
– if you are making enough money (and can prove it),
– if you have no debts against the government.
We know, this sounds almost too easy and you should be able to prove this to the MOI easily! Right? Well, real life experience is usually a whole lot different. Let us explain the two main reasons why.
Proving your income for the business residence permit
Honestly speaking, there are two super important things related to proving your income – the timing and/or your tax return. Why these two?
The thing is that proving income in the eyes of the MOI is not as simple as showing them your bank account statement. You need to prove that your income is high enough to meet some law requirements and you need to prove this very credibly.
What is means is different in different timing of your application.
If you have not done your first tax return yet, you will need to show all your invoices, receipts, bank statements, table of income etc. and the MOI still might not find it credible enough.
If you have done your first tax return already, it depend on how good/experienced accountant you used. Many accountants (even if they have some fancy words like “expat” in their company names) have actually no idea how your taxes should be done if you want to use the tax return for your residence permit application.
Honestly speaking, if people do taxes with a different accountant then the one we recommend, their tax return is incorrect in about 50% cases which causes a lot of trouble during the application process and in some cases can lead to the residence permit denial.
As for the timing, that is very much connected to the above. If your taxes are done properly, it is for sure better to apply for the business residence permit after you have done your first tax return to avoid trouble with proving your income through your invoices etc. If you have done your tax return already, the MOI will be basing the decision on the tax return and will not want to see any invoices or bank statements.
No debts against the government
This requirements sounds reasonable and as one no one should have a problem with. From our daily practice though (where we have done hundreds of business residence permits), about 70% of people have debts. The thing is that if you pay the social security or health care late, they start counting a late payment fee. This is usually a small amount but even if you have 10 CZK debt, it is a debt and it will not work for the residence permit.
Another thing is that there is no way you could check your state with the social security online, via e-mail or phone. If you want to know if you owe them anything, you need to go there in person and request this information. Even if they tell you how much you owe on the spot, you can not pay it there. You must send it via bank transfer. That usually takes couple days (to weeks) to actually credit to your social security account.
Only once this is credited, you can request the official proof of no debts from them. What often happens though is that this whole process (going there, asking, paying, crediting etc.) takes so long that you already owe them again (say the next monthly payment) and you star the whole bureaucratic round again.
Well, this is not all if you were hoping 😀 Another thing is that the social security officially has 30 days to issue the proof of no debts which is then only valid for 30 days (often from the moment you applied for it). So, what sometimes happens is that you get the document and it is almost expired so you need to be super quick with delivering it to the MOI. Now imagine that you are doing this based on a letter the MOI sent you requesting this document and they only gave you say 14 days to deliver it to them 😀
Anyway, there are many similar things like this, luckily for you, if you are a client of ours, we deal with most of them on your behalf and in most cases do not even tell you about them (not to stress you out more then you already are anyway).
And now, when I (Jan), started writing this article, I though it would be just a short simple article about the business residence permit. I am now almost at 1 500 words and I have barely scratched the surface. So, I might finish this article later on with the full story, required documents etc. For now though, I need a break! 😀
If you are interested in the required documents, plese refer to the article explaining the difference between the business visa extension and business residence application. Alternatively, get in touch with us through the form below and we’ll be happy to either answer any questions you might have, send you a list of required documents in a shiny pdf or just take care of the whole process based on a Power of Attorney.
Jan on behalf of the whole Move To Prague relocation experts’s team!