IMPACT – MEDIUM

What is the change? The Czech Republic is moving toward adoption of an immigration law that will affect intra-corporate transfers (ICTs), employee card applicants, foreign investors, non-EU nationals applying for permanent residence and seasonal workers, among others.

What does the change mean? The law will introduce new permit categories for ICTs, foreign investors and seasonal workers, as well as clarify processes for some employee card, permanent residence and long-term visa applicants. The benefits of the new ICT and investor categories may be limited because existing options might be preferential. Employers should take note of the changes and make sure that foreign nationals coming to the Czech Republic are applying for the right kind of permit and following proper procedures.

  • Implementation time frame: The Ministry of the Interior expects the law to take effect in June.
  • Visas/permits affected: ICT permits, employee cards, investment-based residence cards, permanent residence, temporary residence and long-term visas, including a new long-term visa category for seasonal workers.
  • Who is affected: Employers and foreign nationals applying for any of the permits or visas listed above.
  • Impact on processing times: In some cases the changes will improve processing times, especially for employers participating in programs such as Fast-Track, Welcome Package or Project Ukraine and for long-term visa and residence permit applicants applying for visa or permits in countries with a high volume of applicants.
  • Next steps: The law has passed a first reading in parliament and is in the process of being finalized.

Background: One of the key purposes for the legislation was to implement the EU’s Intra Corporate Transfer (ICT) Directive 2014/66/EU. However, it touches on a number of other areas as well. Among key changes:

  • The Czech Republic will implement the EU’s ICT directive. ICT Cards will be made available to non-EU national managers, specialists and trainees who have been employed by an employer outside the Czech Republic for at least six months. Assignments cannot exceed three years for managers and specialists or one year for trainees. While officials are introducing ICT Cards in order to move into compliance with the EU directive, the Czech Republic’s existing ICT framework is, in many ways, more favorable to companies and ICTs. Processing times are faster under the existing program, there is no requirement that the ICT be employed by the employer for at least six months and assignments are not limited to three years. The impact of the implementation of this directive, therefore, is likely to be minimal.
  • Change the application process for foreign nationals who are board members or executive directors of a Czech company. In some cases, foreign nationals in these positions have applied for employee cards rather than long-term visas or residence permits in the business category. This is because the employee card process usually involves less scrutiny. Officials are aiming to close this loophole by requiring board members and executive directors to apply for long-term visas or residence permits when appropriate. Current employee card holders will not be affected.
  • “Investment cards” for qualifying company executives will be implemented. In order to be eligible for an investment card, executives must create new jobs for Czech nationals and significantly invest in the Czech economy. Details have not been finalized, but officials have discussed a threshold requirement of creating at least 20 new jobs and investing at least 10 million koruna (about US$390,000). While this option may contain some benefits, the complexity of the application (which could include significant supporting documentation requirements) may make an employee card a better option for qualifying managers.
  • Officials will make clarifications on the permanent residence process for non-EU nationals. The legislation is expected to specify that non-EU nationals who have been in the Czech Republic at the time they apply for permanent residence should be eligible for permanent residence. This means that applicants who lose their residence status while an application is pending will still be eligible, provided they had been in the country for five years as of the date of their application.
  • Some first-time visa and residence card applications will be able to be made in country. Currently, the Czech Republic requires first-time visa or residence card applicants to submit applications abroad at a Czech embassy or consulate. The law will change this, however, such that employers participating in programs such as Fast-Track, Welcome Package or Project Ukraine will be able to submit applications in the Czech Republic on behalf of foreign employees.
  • The law will allow for the outsourcing of long-term visa and residence permit applications. While this is already happening for short-term Schengen Visas, the law will be amended make this option available for long-term visa and residence permit applications as well. This change is expected to improve processing times in countries where embassies and consulates see a high number of applications.
  • Create a long-term visa permit for seasonal workers. This will allow workers to come to the Czech Republic for up to six months, but seasonal workers who want to change jobs will have to apply for an employment card or residence permit.

BAL Analysis: BAL will continue to follow the implementation of the law described above and will alert clients to any significant development, including any announcement on implementation dates.

This alert has been provided by the BAL Global Practice group and our network provider located in the Czech Republic. For additional information, please contact your BAL attorney.

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