Czechia is politically stable and the threat of an unconstitutional change of government is very low. Changes of power occur smoothly, with all major political parties accepting democratic norms, but political fragmentation means government formation processes can be protracted. It is a member of the EU and NATO, and is closely integrated into regional political and security frameworks. The country has held free and fair elections for the past two decades and the constitution guarantees the stability of the political system. ​​Occasional government instability in the past decade has not significantly derailed the country’s broadly pro-Western and pro-investment outlook. Cooperation between the government and the Communist Party of Bohemia and Moravia (KSCM) in the 2017-21 term is unlikely to fundamentally change the direction of domestic and foreign policy.

The proportional electoral system and multi-party politics means that government coalitions are the norm. ​​​​​In fact, occasional government instability is likely to remain an issue in the coming term, under the minority coalition between ANO and the Social Democratic Party (CSSD). The existence of smaller, more radical parties such as the Communist Party of Bohemia and Moravia (KSCM), which still enjoys stable support at around 10%-15%, and more recently the far-right Eurosceptic Freedom and Direct Democracy (SPD) has further fragmented the political scene and complicates the formation of stable coalitions. This can undermine policy predictability but is unlikely to derail the country from its general pro-business and pro-Western orientation.

The government has a positive attitude to foreign trade and investment, which are key drivers of the economy. Local attitudes to foreign investment are generally positive, though there is some resentment over the dominance of German interests. State intervention in the economy is more pronounced in sectors of strategic interest, especially energy. The government has shown a reluctance to move forward with the planned privatization of major companies. The energy sector, including key projects such as the planned construction of new nuclear reactors, will remain under close government supervision because of considerations regarding the security of energy supply and worries that domestic energy companies would be bought by “unwelcome” companies, such as foreign state-owned companies. 

Czech Republic is considered a Flawed Democracy in the 2020 Democracy Index, developed by The Economist Intelligence Unit (EIU), where the country ranks 32 out of 167 countries scored.

The country ranks 27 at the 2019 Human Development Index developed by the United Nations Development Programme.

The operating environment has improved over the last two decades amid the implementation of EU regulations and efforts to attract foreign investment by cutting red tape and reducing corruption. Czechia's strategic location close to some of Europe's largest markets (particularly Germany), EU membership, low labor costs, strong skill base, and investment-friendly legislative framework benefit the operational environment. However, labor shortages are an increasing concern for companies in several sectors and the government has so far adopted only partial measures to address the issue. Trade unions are generally weak, and long and disruptive labor unrest remains rare, as the labour movement has become more and more dispersed with the privatization of most state-owned companies.

Corruption is a concern, particularly when dealing with the public administration and engaging in public tenders. In fact, corruption during tender processes will continue to pose obstacles, and red tape and arbitrary bureaucracy are likely in dealings with local government officialdom. Influential local business groups and lobbyists are believed to retain some leverage over politics and to be able to occasionally influence decision-making by political actors and other public officials to their benefit. Some local businesspeople made their fortunes during the country’s early transition years and their source of wealth remains questionable. There is an underlying risk that foreign companies may be associated with such individuals, given that few have been prosecuted or convicted. The spread of organized crime during the early transition period and the current trend of such groups entering legal businesses exacerbate these risks.

Successive governments have introduced measures to streamline the bureaucracy. This has led to gradual improvements in the business environment in recent years. However, inefficient and costly bureaucratic procedures remain an obstacle for business.

The judicial system is broadly independent, but courts can be slow and inefficient, and lack IT capabilities. This is a particular problem in bankruptcy and commercial courts, where there are long backlogs. There have also been allegations that certain courts or judges remain under political influence when it comes to cases involving highly influential local businesspeople or politicians.

Transport and business infrastructure are generally accessible and reliable and are likely to continue to gradually improve in the coming years since they were neglected in recent years, and the current government’s plans to improve the motorway network have proven slow to implement. Therefore, businesses in Czechia are unlikely to face serious operational obstacles from infrastructure. EU accession further boosted transport infrastructure and compliance with environmental standards. The road and motorway (highway) network is one of the best in the former communist bloc. However, considerable upgrades are still needed to make travel and transport of goods more efficient and bring them on par with those in Western Europe. The government has taken some measures to reduce regulatory and administrative bottlenecks to accelerate infrastructure modernisation. 

Water and electricity utilities usually provide a good service, especially in urban areas, though occasional problems may be encountered in more remote villages. The telecommunications market is highly developed, and services are extensive and reliable. Internet broadband is widespread and easily accessible.

Restrictions imposed in response to the global coronavirus disease 2019 (COVID-19) pandemic are likely to cause significant operational disruption in the coming months.  Businesses will likely need to comply with renewed restrictions at short notice – including localised lockdowns – in the event of an uptick in case numbers.

Overall, the Czech Republic ranks 41 out of 190 countries scored at the 2020 Doing Business Index by the World Bank and 49 out of 198 at the 2020 Corruption Perception Index by the Transparency International Organization.

Crime is the most significant security risk to assets and personnel. Violent crime is rare but petty and acquisitive crime is a problem, particularly in the capital Prague. The prevalence and sophistication of white-collar crime targeting legitimate companies have increased in the past few years. However, the crime rate has declined steadily in recent years, particularly property and violent crimes. Most crimes are likely to consist of petty property offenses. Domestic and international organised criminal groups are active in the country and engage in illegal production, sale and trafficking of drugs, human trafficking and illegal migration, car theft, racketeering and extortion. However, most organised criminal activity is directed at business partners or rivals within the local community and foreign investors are unlikely to encounter security problems from organised criminal groups. 

Economic crime has been a growing problem in recent years, and fraudsters increasingly target companies. The majority of such crime involves asset appropriation, corruption and insurance-related offenses, but intellectual property crime and money-laundering are also areas of concern. Cybercrime is a problem and is increasingly targeted by law enforcement. The security and law enforcement agencies in Czechia are professional and generally reliable but can be inefficient due to understaffing. Fewer than half of all reported crimes are solved each year.

Until March 2020, when the government imposed restrictions on movement in its response to the coronavirus disease 2019 (COVID-19) virus pandemic, protest risks primarily stemmed from the ‘Million Moments’ civic group, which has organized a series of anti-government and anti-corruption demonstrations. Despite large participation, these protests were peaceful and would likely remain so if they re-emerge more frequently in the future. Far-right groups tend to organize small-scale but frequent rallies against immigration policy, Roma communities, and LGBT+ pride marches. Environmental activism focuses mainly on the nuclear power plants in Temelín and Dukovany.

Interstate military conflict on Czechia's soil is highly unlikely. The country maintains positive relations with its neighbors. Although some bilateral disputes are present (for instance, the country's ties with Austria and Germany tend to flare up over the issue of the Beneš decrees and the nuclear power plant in Temelín), these are highly unlikely to result in an armed conflict. Czechia is an EU and NATO member and belongs to the regional Visegrad Four (V4) organization alongside Poland, Hungary, and Slovakia, mitigating the risk further.

Environmental groups remain relatively marginal, but have grown in number and importance over the past two decades. Greenpeace and other organisations have occasionally organised protests and direct action against various industrial sites. Coal-mining operations and coal-fired power plants, alongside nuclear energy, have been the principal targets of such groups in the past few years. Protest action is designed to raise awareness and publicity, for example through demonstrations, petitions and legal counter-measures. Additionally, Although neo-Nazi groups are illegal, several “skinhead” groups are known to be active, mainly in urban areas. Rallies organised by right-wing extremist groups in Czech cities have also been relatively frequent in recent years, but have remained largely peaceful. 

The risk of terrorist attacks staged by Islamist militants remains lower than in Western Europe. Isolated motivations and works of lone individuals, including Czech nationals converted to Islam, would be more probable. In November 2013, a Czech national was convicted for a bomb threat against then-finance minister Miroslav Kalousek. In November 2019, a Slovak national – a convert to Islam – was sentenced to prison for 6.5 years for propagating terrorism. He was allegedly planning a terrorist attack in the Slovak town of Prešov. Should an attack occur, government premises, foreign embassies, and Jewish quarters in the capital, Prague, would be at the highest risk.

Moreover, Czechia is a member of EU and NATO, and has no unresolved border or territorial disputes with its neighbours that could escalate into full-scale conflict. The security forces are under democratic control and the population is largely homogenous, with no serious communal conflicts.

Overall, the Czech Republic ranks 8 out of 163 within the 2020 Global Peace Index by the Institute for Economics and Peace. 

The Czech Republic is not currently among the most cyber-attacked countries in the world. According to Kaspersky cyber threat map, it is ranked as the 41 most cyber-attacked countries. 

Czechia’s National Cyber and Information Security Agency (NÚKIB) on 13 March said the Brno University Hospital (South Moravian Region) had been hit by a “cybersecurity incident” forcing a complete closure of its IT systems.

Czechia’s organizations are increasingly affected by targeted and costly ransomware attacks.

No vaccinations are required to enter the country.

The Czech Republic ranks 42 out of 195 within the 2019 Global Health Security Index, a project of the Nuclear Threat Initiative (NTI) and the Johns Hopkins Center for Health Security (JHU), developed with The Economist Intelligence Unit (EIU).

The Czech Republic has a continental climate, with hot summers and long, cold, even harsh winters. Temperatures range from 18°C to 26°C in the summer (June to September) and from -3°C to 0°C in the winter (October to March). Temperatures will also vary in mountainous regions where winters are very rainy and snowy. It rains regularly throughout the year.

In August 2002 the Czech Republic was hit by devastating floods, in what was the biggest natural disaster in modern Czech history, although there were others.

If you plan to visit the country, stay informed by the Czech National Committee for Natural Disaster Reduction (CNC-NDR).