International Property News

12th March 2008

The influx of foreigners whom firms in the Czech Republic badly need as unemployment is decreasing has generated a new group of businesspeople who provide accommodation for the foreigners and make billions of crowns on them, daily Hospodarske noviny (HN) wrote Tuesday.

Unemployment in the Czech Republic further dropped to 5.9 percent in February.

HN writes that 241,000 foreigners now work legally in the Czech Republic, which is 60,000 more than last year. Another tens of thousands work in the country illegally.

The volume of money foreigners send home from the Czech Republic increased to 76 billion crowns last year, from 23 billion six years ago, HN writes referring to the CNB central bank data.

It says the sum would easily cover the state budget deficit that reached 66.4 billion crowns last year.

Economists predict that the number of foreign workers, particularly at production lines where Czechs are not too ardent to work, will be growing, the paper writes.

"There is a huge demand for accommodation. But to keep order among the people coming from largely different cultures and having different sanitary habits is rather difficult," HN quotes Vera Kovarikova, from the Angola dormitory in Plzen, west Bohemia, as saying.

The facility accommodates workers coming from Asian as well as European countries.

HN writes that the accommodation business is very lucrative. It gives as an example the town of Tachov, west Bohemia, with 12,000 inhabitants.

It does not have accommodation for tourists and flats for young families, but it has tens of rooms with hundreds of beds occupied by foreign workers, HN writes.

Laidslav Macak, senator and mayor of Tachov, told HN that the business is developing spontaneously and that it is difficult to map who pays taxes.

HN writes that the foreigners pay 3,500 crowns per bed per month and that up to eight people usually use a three-room flat. The owner of a flat who pays maximally 10,000 crowns per month, thus collects up to 28,000 crowns from the foreign workers.

Foreign workers are also a good source of profit for the agencies that import them in the Czech Republic and that also often provide accommodation for them and transport them by buses to factories, HN writes.

It says Ukrainian workers call "mafiosi" the agencies' "coordinators" who "look after" the workers.

"The behaviour of certain bosses from the structures that import foreign workers who are still a very scarce commodity in the Czech Republic corresponds to the label. Many a worker has ended up covered in blood after he started to take interest in transferring to another, competition, agency," HN writes.

It says only very large firms, such as South Korea's Hyundai in Nosovice, north Moravia, can afford to invest in accommodation for hundreds of workers, HN writes.