How to Open a Bank Account in Czech Republic as a Non-Resident

Many expats, digital nomads, tourists, and small business owners are trying to figure out how to open a bank account in the Czech Republic.

You see, the Czech Republic is a gateway to the European Union for many people (and businesses) who struggle to access EU bank accounts elsewhere.

Similar to opening EU bank accounts, including a bank account in Poland, Hungary, Bulgaria, and other EU members, certain banks in the Czech Republic offer a more relaxed onboarding process than places like Germany or France.

KEY TAKEAWAYS

• Completing the “rodné číslo” registration can expedite the account opening process
• Opening accounts here can be very challenging as a foreigner
• Account opening conditions will varcy from bank to bank, branch to branch, and even banker to banker
• Not banks here will accept foreign applicants
• Banking services and products will vary between banks

But it’s not all sunshine and Koláče… many Czech banks are painfully slow and have language barriers that make it almost impossible to open accounts. Not to mention, depending on where you come from, they can be incredibly frustrating to deal with.

Now, after all that, you might be surprised to find out that Czech banks are actually in high demand for certain people…

In fact, after the country joined the EU in 2004, the foreign population in Prague exploded… driving demand for banking even higher. Today, there are over 500,000 foreigners living in the country and many more visiting regularly for leisure and business.

Fortunately for all of them (and you), it’s possible to navigate the Czech account opening process without all the headaches. You just need a bit of expert guidance, some direction on which banks to choose, and a good banker.

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Feel free to use the table of contents to jump ahead to the sections most relevant to you.

Table of Contents

1. Opening a Bank Account in the Czech Republic 101
2. Why Should I Open a Czech Bank Account?
3. Who Can Open a Bank Account in the Czech Republic
4. Challenges of Opening a Bank Account in the Czech Republic
5. Do You Want Help Opening Bank Accounts?

Opening a Bank Account in the Czech Republic 101

Put simply, the Czech Republic has been through a lot over the last 50 years.

First, communism. Then, the fall of communism. And, a banking crisis in the 1990s…

Several Czech banks went belly up thanks to inexperienced bankers, mismanagement, and loose regulations. And, a slew of criminal schemes and asset stripping designed to plunder the Czech banking system didn’t help either.

So, the Czech Republic experienced all the growing pains and mistakes that most former communist countries made when transitioning to a free-market economy: corruption, asset grabs, bank failures, wild west lending policies, and more.

Plus, the country had zero banking expertise. The labor pool was scary. Czech’s state-run banks rewarded managers for bad decisions, ineptitude, and propping up failing industries. And, there were so few trained bank staff in the country that it was nearly impossible to be fired. Naturally, incompetence spread like wildfire.

Soon, it became clear: one of the biggest threats to the Czech economy in the ’90s was that no one in the country knew how to run a profitable bank. And, since banks didn’t have shareholders, there was zero accountability.

But then the Czech Republic did something interesting…

They let foreign banks from developed Western nations buy up the Czech banking sector.  Overnight, an influx of qualified, western-thinking bank managers and standards were injected into the country. The banking sector stabilized, Czech executives were groomed, and the future started to look promising.

Today, the Czech banks are liquid and profitable. And, the country has an abnormally conservative banking sector when compared to its peers.

And, that’s a good thing for anyone banking here.

Further strengths were gained when the Czech Republic joined the EU in 2004, but the country hasn’t adopted the euro. So, you’ll be using the koruna, or CZK, for all domestic transactions.

And, despite not being an international financial center, if you have the right information, choose the right banks, and have a solid banker going in, there are a few interesting banking opportunities here for certain groups.

Of course, there are other alternative EU banking sectors to consider, including how to open a bank account in the Netherlands, Poland, Denmark, and other jurisdictions.

With that said, let’s take a look at why non-residents are interested in banking in the Czech Republic. This will help to determine whether or not this is a suitable banking jurisdiction for you or if you need to consider other EU jurisdictions, like a Danish bank account, Polish bank account, or an account outside of Europe completely.

Why Should I Open a Czech Bank Account?

The Czech Republic can be a useful option for some foreigners.

The country is already popular with foreigners because of its “developed country” status, low cost of living, and the ability to live a European lifestyle for a fraction of the cost.

But, what makes opening accounts here interesting?

Reasons for Opening Bank Accounts in Czechia:

• More conservative & financially sound than other CEE & European countries
• Deposit insurance up to the equivalent of EUR 100,000
• Majority of Czech banks are foreign-owned or branches of foreign banks
• Certain banks will open accounts for expat individuals
• Higher tolerance for high-risk businesses and transactions
• Some banks will accept foreign EU companies (if there’s a “connection” to the Czech Republic)
• Has over 200 electronic money institutions, which provide alternative banking options and services

Who Can Open a Bank Account in the Czech Republic?

The following groups will find having bank accounts in the Czech Republic most useful:

• Foreigners that want EU bank accounts with low minimums
• Foreign and local companies that want European bank accounts but are struggling to open accounts elsewhere
• Non-EU and offshore companies with ties to the country or willing to create subsidiaries here
• Foreigners living, working, studying or retiring here
• Anyone buying property or acquiring a mortgage in the Czech Republic

Here are a few examples highlighting how bank accounts here can be useful for certain groups:

Anyone who desperately needs an EU bank account but is struggling open elsewhere

Some EU countries sometimes have strict residency and paperwork requirements, which make it difficult for foreign individuals to open bank accounts. Places like Germany, Estonia, Luxembourg, Malta, and others, fall into this category. So, those looking for lenient opening might want to give the Czech Republic a try. Many of the banks are foreign-owned and Prague is loaded with foreigners, so certain banks are used to dealing with expat and foreign individuals.

And while fintech, EMIs, and payment institutions are available to foreigners and companies in several European countries – they can have limitations and hyperactive compliance controls making them unreliable for certain transactions. And if you’re dealing with larger amounts, traditional bank accounts can make more sense.

Foreign companies desperate for an EU corporate account can get one by creating a Czech subsidiary

For those struggling to open accounts in the EU for a foreign or offshore company, creating a Czech subsidiary could be one way to expand your European banking options. For example, creating a local Czech company, opening a local bank account for it, and then having your foreign company own it might be worth exploring for some people.

People who want to buy property in the Czech Republic or get a mortgage

Most people owning property here will need a Czech account to pay for local services and receive payments. In addition, several Czech banks provide mortgages to foreigners who are looking to buy property here. Some Czech banks will even give you lower mortgage rates if you agree to maintain a certain balance and have incoming transfers above a particular amount each month. Certain banks will even give mortgages to temporary residents who don’t even have residency cards.

Interestingly, non-US citizens without credit history domestically can also get a mortgage. The process is more difficult, but if you don’t have a guarantor or co-signer, you can sometimes transfer funds to a CZK fixed-term deposit account and use that as collateral for your mortgage.

Challenges of Opening a Bank Account in the Czech Republic

There are many obstacles and inconveniences to be aware of before you open a bank account here.

However, many of these hurdles are to be expected when you open bank accounts in Central or Eastern Europe, but others can be avoided entirely if you have the right information, connections, and a bit of direction.

Language Barriers

Many foreigners are surprised to find that not all banks here have English-speaking customer service (or support) and not all bankers speak English. And, some are downright clueless with how to open accounts for foreigners, so be prepared to bank hop. Having a list of English-speaking bankers that are reliable and used to dealing with expat individuals is a big advantage.

If you ever have a problem with your accounts in the future, the bank makes a mistake, or you get charged an exorbitant amount and need to be refunded, do you have a banker that can solve the issue in English? Oftentimes, for foreigners, the answer is no. If there’s no customer support and you don’t have a local friend who can translate, you’re stuck going from branch to branch looking for a responsive, English-speaking banker to resolve the issue.

Also, keep in mind that most documents required to open accounts here are in Czech, so be sure to take a local with you to translate if you don’t have a reliable banker.  And, if you’re getting a mortgage, keep in mind that your mortgage contract will be in Czech, so you’ll want to find someone trustworthy to translate for you.

Poor Customer Service

Unmotivated and unhelpful bank employees. If the bank overcharges you for something, getting a refund can sometimes be difficult. If you’ve banked in Central or Eastern Europe, you can expect a similar experience.

The “Rodne Cislo” Factor

Applying for your “rodné číslo,” or national ID number early on is an excellent idea. It’ll increase your banking options, expedite the opening process, and can even give you access to lower mortgage rates. You get your rodne čislo when you register with the foreign police, usually after 1-3 months of staying in the country.

Not All Banks Accept Non-Residents

Bank selection is particularly important for foreigners and non-EU residents. Not all banks accept foreigners. And, Non-EU citizens, by default, are going to have more scrutiny and only certain banks will consider opening an account for you. Some banks will allow a foreign address, while others will refuse and require a local Czech address.

No Joint Accounts

If you want to have a joint account with your significant other, look elsewhere. Surprisingly, joint accounts, as most foreigners know them, don’t exist here. Some banks will let you add someone as an authorized user, but only one person can “own” the account.

Terrible Conversion Rates for CZK, EUR, GBP

Many foreigners find this out the hard way. What usually happens is this:

You need to make a large purchase – a down payment, security deposit or rent, pay business expenses, buy a car, etc. So, you transfer money to or from your foreign bank to a Czech account in CZK. And, you’re hit with a massive conversion fee. The highest fees happen when the bank deposits your incoming EUR or GBP transfer into your CZK account. You’re hit with the bank’s conversion rate, which is usually horrible and the resulting fees are usually shocking for foreigners.

Fintechs & EMIs Don’t Always Work

While Transferwise, Revolut, and other fintech options are great for small purchases and day-to-day currency conversions, they can’t always be used for larger transactions.

Remote Bank Account Opening is Rare

Remote opening here is increasingly rare. While it’s still possible in certain circumstances if you appoint a local representative, for most people this is out of reach and physical presence is almost always required to open a bank account. Plus, since the majority of banks are foreign-owned or are branches of internationally owned banks, remote opening exceptions aren’t as loose as other central and eastern European countries.

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