In accordance with its European Union membership since May, 1st of 2004, Czech Republic applies the European Union trade policy such as antidumping or anti-subsidy measures, for instance. The European Union import rules, especially concerning the quotas on the textile products sector, is widespread in Czech Republic. If the country has adopted the main part of the community regulations on its accession to the EU, some transitional measures have been granted to the country regarding some EU rules like for example freedom of movement for workers or cabotage inside some countries.
While the European Union has a rather liberal foreign trade policy, some products need import licenses. There are some restrictions, especially on farm products, following the implementation of the CAP (Common Agricultural Policy): the application of compensations on import and export of farm products, aimed at favoring the development of agriculture within the EU, implies a certain number of control and regulation systems for the goods entering the EU territory.
Exchanges within the European Union are free and not charged. Since its accession to the European Union on May, 1st of 2004, the Czech Republic has adopted the EU Common External Tariff. The duties for non-European countries are relatively low, especially for manufactured goods (3% on average for the general rate).
The Combined Nomenclature of the European Community (EC) integrates the HS Nomenclature and comprises additional 8-digit subdivisions and legal notes specifically created to address the needs of the Community.
Since its accession to the European Union on May, 1st of 2004, the Czech Republic has adopted the EU Common External Tariff. Consequently, trade with Czech Republic is totally free from customs duties, provided that the country of origin of the goods is one of the other 24 EU Member States. Nevertheless, when introducing goods into the Czech Republic, exporters shall fill in an intrastat declaration.
In case of non EU countries regular customs procedure must be done so that goods could enter the market. This procedure consists from customs declaration at the customs office. This customs office assesses customs duty. Customs office may claim a money deposit for this “customs debt”. Customs debt must be paid in the given date.
As part of the "SAFE" standards advocated by the World Customs Organization (WCO), the European Union has set up a new system of import controls, the "Import Control System" (ICS), which aims to secure the flow of goods at the time of their entry into the customs territory of the EU. This control system, part of the Community Program eCustomer, has been in effect since January 1, 2011. Since then, operators are required to pass an Entry Summary Declaration (ENS) to the customs of the country of entry, prior to the introduction of goods into the customs territory of the European Union.
The Modernized Customs Code (MCC) of the European Union replaces existing Regulation 2913/92 and simplifies various procedures such as introducing a paperless environment, centralized clearance, and more.
Czech consumers are traditionally sensitive to price. But several other factors are becoming increasingly important: the quality, the technology used. For instance, brands are seen as a sign of high quality, but this is more particularly valid for the young population and the products they buy. And advertising and after sales service are the core of business success. 60 % of consumers use a car for doing shopping and prefer going to the hypermarkets. When groceries are preferred, it is for the quality and the freshness of the products. Credit card use has grown exponentially as bank regulations for the issuance of credit cards have been relaxed to near-Western standards.
Consumer Profile and Purchasing Power
As in most European countries, Czech population is getting older. The average age of the population reaches 40,2 years. Services to old persons will get more and more growth potential. The purchasing power of the Czech consumers, which is increasing over the past few years, is around 21,000 CZK (800 EUR per month) today. But, the purchasing power of the active population is correlated with its education level. This means that the population which has the capacity to buy is composed of well educated persons. This induces some new consumption behaviors that are really specific. This population tends to prefer products it already knows and consumes more environmentally friendly products and bio products.
The principal economic zones of the country are concentrated around the capital Prague and in metropolitan cities like Usti nad Labem and Plzen in the west and Brno and Ostrava in the east. The distribution market is currently booming due to modernization of the sector and the increase of the purchasing power of the population. Czech retail business is still growing more than 4 % per year. Small shops face stiff competition from hypermarkets and shopping malls with a broader selection, lower prices and extended weekend and evening hours. These stores have become increasingly important to the distribution mix over the last decade, attracting customers that used to purchase through traditional retailers. Swedish IKEA, British TESCO, and German OBI, Hornbach and Baumax, among others, operate multiple locations throughout Prague and have expanded throughout the nation.
The distribution structure in the Czech Republic increasingly resembles to western countries, i.e. the dominance of big groups that disadvantages the traditional trade. In fact, until 1989, commercial distribution was under State control, but today it is entirely privatized. In 1997, the hypermarkets represented only 1% of retail business while traditional businesses represented 49%. Today, the trend has completely changed and hypermarkets largely dominate with 44% of retail trade, while the market-share of traditional traders is still falling down. Today, the distribution market in the country is dominated by UK, Austrian, and German companies which were the first ones to enter the Czech market. A majority of Czech companies have gone bankrupt or have been taken over as they lost their competitive edge. The biggest retail operators are: TESCO, METRO(Makro), AHOLD (represented by brand Hypernova and Albert), KAUFLAND, REWE (Billa, penny), LIDL (en checo), PLUS DISKONT. Shopping centers and malls have also had great success: 80% of the population living in big cities visits them. At these centers supermarkets rub shoulders with luxury stores.
Organizing Goods Transport
Main Useful Means of Transport
Natural conditions limit means of transport of goods. The Czech republic have neither direct access to the sea nor river are only a few month navigable. That means the road transport and railway transport are the most important mean of transport for economy. In terms of international transport also air transport becomes more important.
For the moment, cabotage inside the other European countries is still forbidden, because of some transitional measures induced by the accession process into the EU.
Industrial sector’s contribution to the country’s GDP reaches 40 %. 40,2 % of economically active population is working in industrial sector. Most competitive industrial branches are automotive and electronics. Active support of cluster initiatives has existed in the Czech Republic for several years already. Click here to find out the localization of theses clusters in the country.
eSTAV.cz - Website of Czech construction companies, materials, products. Finance, building news, events in the construction sector, housing and civil laws. All.biz - Czech Republic - Directory of companies in Czech Republic. Confederation Industry of the Czech Republic - List of members of the Czech Confederation Industry. Czech Exporters - Database of export companies offering their products and services to the international market. It contains detailed information and advanced searching tools to find companies that own quality certificates, export or achieve certain turnover. Czech Exporters Directory - Official database of CzechTrade provided by the National Trade Promotion Agency. European Databank - Directory of Czech companies. Expats - Prague's business directory. HBI - Directory of companies located in Slovakia and the Czech Republic. Ifirmy Directory - CZ Online business directory Inform.cz - Directory of exporters in the Czech Republic. Inform.cz - Database of Czech companies. Sireh.com - Directory of companies in the Czech Republic. Wer liefert was? - Leading supplier search engine in B2B : manufacturers, service providers and distributors in the Czech Republic. Wer liefert was? Czech Republic - Database of Czech companies. Yellow Pages - Find a business in the Czech Republic. Zlate Stranky - Czech Republic's Yellow Pages.
Manufacturers Associations of the Main Industries
38 professional associations listed for the Czech Republic.