Sales Representative in the Czech Republic

Overview by

Commercial Intermediaries

Trading Companies
  • Type of Organization
When a foreign company wants to sell a product on the Czech market it is recomanded to find and support a Czech partner, agent, or distributor. An agent or distributor based in Prague or another big city can offer good coverage of the entire country. It is of course possible to deal directly with the retailers.
Professional services firms, educational institutions, and engineering firms should use local partners as their entree into the market.
  • Main Actors
No1- of the czech retail market is Schwarz CR (representing brands Kaufland and Lidl). Its turnover reached in 2007 51,1 billions CZK. Other important retailers are Ahold CR (Hypernova, Albert) with turnover 42 billions CZK and Tesco stores (42 billions CZK).
  • Type of Organization
There are two types of wholesalers:
1. Import-export wholesalers. They are particularly useful for their logistic organization, information processing, product promotion and selection.
2. Wholesalers who mainly offer a logistic service, stocking goods so as to supply retailers as they need them.
  • Main Actors
There are several thousands wholesalers in the czech republic and it is impossible to identify the most important companies.
Useful Resources

Using a Commercial Agent

The Advantages
The Czech Republic is geographically small, with 10 percent of the population and most decision-makers concentrated in the capital city of Prague. It is a market where good personal relationships are crucial, and everyone seems to know everyone else. Therefore, we recommend basing your approach on finding and supporting a Czech partner, agent, or distributor. An agent or distributor based in Prague can offer good coverage of the entire country.
Where to Be Vigilant
In general, agents and distributors expect exclusivity. It is recommended to negotiate an exclusivity agreement based either with a time limitation, or a clause that allows termination for non-performance.
Elements of Motivation
Good support and management of the agent-distributor relationship is crucial. Therefore intensive communication is needed (mail, phone, fax and regular visits of your agent. Many distributors are thinly capitalized and understaffed. Suitable tool of motivation are also minimum sales, and qualitative indicators of sales efforts.
The Average Amount of Commission
  • from 5 to 10% for regular business transactions,
  • from 10 to 20% for occasional transactions,
  • 1 to 3% in the case of bulk materials (iron ore or coal),
  • 20% or even higher in the case of medical, laboratory and scientific analytical instruments
Breach of Contract
It varies with type agreement but in general both sides of agreements may have to pay some compensation to the other.
Finding a Commercial Agent
Czech Chamber of commerce
Find Sales and Distribution Service Providers in the Czech Republic on

Setting Up a Commercial Unit

The Advantages
It is not recommended for most small or medium-sized firms to set up an office in the Czech Republic. Labor force and operational costs of such an office are quite expensive.
Where to Be Vigilant
In the case of decision of setting up a commercial unit it is recommended to hire a local attorney who can take on the burden of corporate registration and other administrative work.
Different Possible Forms of Settlement
  • A Representative Office
Such an office can obtain market data and other information and provide necessary promotional and service support. A representative office is not subject to Japanese taxes and establishing an office does not require special approval. However, a representative office must not involve itself in commercial transactions or generate income, and therefore cannot directly handle commercial orders.
  • A Branch Office
A foreign company may establish a branch in the Czech Republic. The incorporation process is similar to the process of incorporation of a company; the founding document does not need to be executed by a notary public. A branch of a foreign company must be registered with the Commercial Register to come into legal existence. A branch may only engage in activities for which it has an appropriate trade license or similar business authorization (if necessary, depending on the scope of business activity of the branch). Branches are taxed on the portion of company income derived within the Czech Republic. As a branch is not a separate legal entity, the founder of the branch remains the subject of all contractual and other relationships, and assumes the rights and liabilities.
  • A Company
Setting up a wholly-owned corporation will involve more time and expense, but it can offer an effective means of guaranteeing better protection for proprietary information, obtaining credit, and penetrating markets which have subtle but substantial barriers to imports.


Evolution of the Sector
There are approximately 90 franchised brands in the country. From a legal perspective, franchising takes the form of a contract between two entities that is regulated by the Commercial Code pertaining to commercial contracts and sales and licensing agreements. Further growth of franchising is expected in the next few years especially in the field of retail, service and gastronomy.
Some Big Franchises
McDonald's, fast food
Ambiente , restaurant
Yves Rocher, body care
OBI, food
COOP, food
For Further Information
The Czech Franchise Association

Finding Assistance

Export Trading Companies
Find more on about Selling to the Czech Republic.

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