While it is true that the upside is best reflected from below, the Czech Republic has a very good starting position for this. This is exactly how you can joke that Czechia is the worst of all twenty-seven countries in the European Union in terms of conditions for starting a business. However, it is such a bitter humor that instead of a smile it causes a grimace on the face.
The unflattering comparison comes from the newly published Czech Prosperity Index. In the overall assessment of all the criteria assessed regarding the business environment, our republic took a slightly more flattering 21st place, but even this is certainly no cause for celebratory uproar.
With the most miserable category behind us, let’s start with the sad situation of setting up a company. According to the World Bank, in this respect we are the worst in the European Union, because it takes up to twenty-five days to start a business in our country, while the European average is not even half, or twelve days.
At the same time, more administrative measures are required to start a business than in other countries, which is also reflected in the fact that there are only an average number of companies in the Czech Republic. There are 3,897 companies with ten or more employees per million inhabitants, the European average is 4,060.
There is also a small number of startups – 131 per million inhabitants, which corresponds to 21st place in the European Union. The low market capitalization also pushes Czechia to the same 21st place in the overall ranking.
“Compared to the economies of the US, Japan or Switzerland, the European capital market, from which companies could draw funds, is underdeveloped. While Germany has the largest share of shares traded relative to the GDP of individual EU countries, or 47%, in the Czech Republic is less than 2% “, Česká spořitelna analyst Tereza Hrtúsová points to another area where the Czech environment is lagging behind.
The best conditions for business are found in the Nordic countries. “Absolutely more favorable in Sweden and Finland. These countries benefit, among other things, from a large number of startups, effective VAT collection and low electricity prices, also caused by a high share of renewable sources “, explains Milan Mařík, analyst of the Europe in Data portal.
The Czech business environment also has positive sides. For example, the corporation tax set at nineteen percent is the lowest tenth in the European Union and national companies are among those in the Brussels community that invest relatively significantly in research and development. These costs in our country correspond to 1.2 percent of GDP, which ranks Czechia in eleventh place.
Despite these partial positives, Mařík’s following observation is unfortunately valid: “The worst level of the business environment belongs to the countries of the former Eastern bloc. From the prosperity index it follows that Czechia falls even more in Eastern Europe than in Western Europe. in this respect “.
