The legal structure and environment of Czech Republic is one of the weak points of the country. Compared to the Western Europe, the legal structure and environment in Czech Republic is relatively long, cumbersome and corrupted. “World Bank indicators show the number of procedures to be relatively large and time consuming compared to the OECD average though it is difficult to conclude there are large differences compared with peer countries such as Hungary, Poland and Slovakia.5 Preliminary results of a recent compilation of structural indicators by the OECD broadly confirm the message of the World Bank data.” (‘OECD Economic Survey of the Czech Republic 2004’, 2004)
The problems that make the initiating a business in Czech Republic hectic and cumbersome only relate to the time delays and hassle, and not the costs that are associated with setting up the business. The capital requirements for initiating a business in the region are not high. “Entry onto the Commercial Register is the most widely criticized aspect of setting up a business. All firms, except the self-employed, have to enter the register and the process has a reputation of being demanding and for taking a long time to complete. There are also problems in the consistency of court decisions, uncertainties about the documentation required and there are instances where, reportedly, theRegistry Courtgoes into excessive depth with applications.” (‘OECD Economic Survey Of The Czech Republic 2004’, 2004)
Moreover the country also faces high level of corruption which is brought forward from the communist regimes in the history of the country. This can create hurdles and problems for a foreign business operating in the region.
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