Tax 

Meeting of the Working Group on Economic Migration

On 20 June 2018, Deloitte participated in the meeting of the working group on economic migration along with the representatives of individual ministries as well as economic and business entities involved in formulating migration policy in the Czech Republic. Various topics were debated at the meeting, including an amendment to the Act on the Residency of Foreigners, economic migration projects and possible manners of facilitating immigration processes.

Transposition of the EU directive and an amendment to the Act on the Residency of Foreigners
The amendment to the Residency Act, which is undergoing legislative procedure, and a part of the Act, which is anticipated to take effect already in 2019 (with the other part becoming effective in 2020), shall introduce a number of changes in processes as regards handling requests for the right of residence for third-country nationals.

  • Changes defined by the EU transposition directive should allow foreign university students and scholars to stay in the Czech Republic for up to nine months after having completed their study or research activity.
  • Introducing a special long-term work visa valid for a maximum of one year is a welcome change, facilitating the acquisition of foreign employees in selected professions facing the lack of labour in the long term. The acceptance of applications for this type of visa is expected to commence in line with a special governmental decree, ensuring a flexible response to the situation on the labour market, probably without the possibility of extension.
  • Furthermore, the amendment shall introduce a duty for new foreign nationals residing in the Czech Republic to complete an adaptation and integration course. The foreign national (unless being subject to an exception) will be required to complete the course within the first year after entering the Czech Republic, otherwise a penalty (of up to CZK 10,000) will be imposed. The course will not be completed with any examination. It is considered that the duty to pay a fee for the course will be imposed directly on the foreign national (or their employer). As a consequence, the capacity of integration centres will be expanded, including accreditation to be also granted to private institutions to offer integration courses.

The amendment shall also introduce a quota for the number of applications received at the Czech Republic’s representative offices abroad. On one hand, this may be considered an attempt to control economic migration in the Czech Republic but, on the other hand, it may also serve a basis for increasing the funding provided to representative offices as well as the Department for asylum and migration policy, which handle a constantly increasing number of applications for residence in the Czech Republic. For the time being, the quotas should only apply to the number of applications received abroad rather than to those filed in the Czech Republic.

Economic migration projects
Since 1 July 2018, the Ministry of Industry and Trade has increased the quota for the Fast Track project to 300 applications per year (i.e. 25 applications per month). With regard to the Ukraine Regime, the period between the inclusion in the regime and filing an application for the employee card at a Czech Republic’s representative office abroad has shortened significantly. In June 2018, this period was 52 days.

The Regime for Other Countries intended for applicants from Mongolia and the Philippines, who are a long-term target of Czech employers, will newly include applicants from Serbia from 1 September 2018. The Regime for Other Countries is a combination of the Ukraine Regime in terms of the criteria for including companies and the Ukraine Project as regards the manner of implementation. The annual capacity is 1,000 applicants from Mongolia, 1,000 applicants from the Philippines and 2,000 applicants from Serbia.

Decreasing the administrative burden in immigration processes
The Ministry of the Interior intends to expand the digitalisation of migration projects, including the launch of an online reservation system for making appointments at the Department for Asylum and Migration Policy. The system should be available in additional language versions and enable, in the future, filing applications (especially for EU citizens), finding a reference number, application status etc. Nevertheless, the implementation of this system will take a while (at least five years according to the estimates of the Ministry of the Interior).

Another proposal for improvement relates to either cancelling the disclosure of registered residence address on the foreigner’s residence permits completely or replacing it with a designation in travel documents, or a sticker on the residence card. This would release foreign nationals from a duty to apply for a new residence card after each registration of a new address, which would save the applicant’s time and money while also reducing the administrative burden of the Department for Asylum and Migration Policy. We anticipate that this issue will be further debated and believe that a balance will be struck between maintaining proper foreigner records and a reasonable  administrative burden.

Unfortunately, the Ministry of the Interior stated that a proof of accommodation cannot be excluded from the requirements concerning the first residence permit proceedings as the proof of accommodation is a fundamental security prerequisite protecting the applicant as such and ensuring that the applicant has accommodation immediately after their arrival.

The Ministry further indicated that the possibility of filing the application in the Czech Republic will be available to a limited number employers (no more than 100) and in specific circumstances. The number of employers has not yet been expanded due to the lack of personnel capacities.

The Ministry of Labour and Social Affairs also asserted that testing the labour market does not pose an obstacle in handling employee cards whereby the potential cancellation of the labour market testing would result in modifications of the Employment Act.

Other
In addition, we would like to inform you that on 19 July 2018, the Czech government temporarily discontinued the acceptance of applications for a long-term stay to perform employment and applications for long-term visa to perform business for Vietnamese citizens. According to Jan Hamáček, the Minister of the Interior, this measure was taken for security and administrative reasons.

We will keep you updated on the future developments of the issues discussed above.

The article is part of dReport – September 2018, Tax news; Grants and investment Incentives.

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