The new Czech Republic first appeared on the map at the beginning of 1993, after the division of former Czechoslovakia. It is a landlocked country, situated in Central Europe, covering an area of 78,864 km square, and borders Germany to the west, Austria to the south, Slovakia to the east, and Poland to the North. The Czech Republic's transformation from a state-run economy to a free market is viewed as one of the most successful in Central and Eastern Europe. The economy is based on free market principles, and most industry has been privatised via voucher privatisation. The traditional industrial base is now being complemented by an ever-growing service industry.

Prague, capital of the Czech Republic, is a city of great charm with a host of medieval, baroque and renaissance buildings dating as far back as 600 years. Prague is known as "The City of Thousand Spires" because of its many churches and towers. There is much to explore: The river Vlatva runs through the heart of the city. It divides the Stare Mesto and Nove Mesto. There are many art galleries, designer shops and museums, as well as more than 20 theatres. Restaurants abound, offering excellent food at very reasonable prices.

Investing in Property

Investment opportunities are many in Prague. There is no shortage of tenants, both local and expatriates; there is also a sizeable market for holiday lets, as Prague is a very popular holiday destination. As with most of the Eastern European countries that have now joined the EU, there is considerable potential for capital growth. A rate of 20% per annum is sometimes forecast. Property prices are still very reasonable. In the most desirable area of Prague, expect to pay £1,500 - £3,000 sq m. depending upon location and condition. This equates with about £120,000 for a single bedroom flat, or up to £250,000 for one with two bedrooms. Away from the centre of the city prices are obviously less.

Buying Property

As in Hungary, a favoured method of purchase for a foreigner buying property in the Czech Republic is via a limited company. Although this does not require Czech residency, one of the directors of the company must be a Czech citizen. Obtaining local advice is recommended. The Czech Republic has a double taxation treaty with many other countries, so liability is appropriately limited. Transfer Tax, and Capital Gains Tax, may apply in certain circumstances, as well as Income Tax and Inheritance Tax.