The Czech Business Landscape in Transition: More Companies, but Fewer Employers
Between 2010 and 2023, only around half of newly founded companies survived the first five years
Foto: Austin Distel | Unsplash
The business landscape in the Czech Republic is changing: while the number of start-ups is increasing, the number of enterprises with employees is falling to its lowest level since 2014. New businesses create jobs, yet many companies disappear from the market within just a few years.
The number of companies in the Czech Republic rose significantly between 2010 and 2023. According to the latest data from the Czech Statistical Office (ČSÚ), their total number increased by almost 22 per cent during this period. At the same time, however, the number of enterprises with employees is declining – in 2023, it reached its lowest level since 2014.
In total, around 1.3 million active companies were operating in the Czech Republic in 2023. They provided jobs for nearly 4.3 million people. The wholesale and retail sector, including the repair and maintenance of motor vehicles, was particularly well represented with 223,500 companies. This was followed by professional, scientific and technical services (213,800) and the construction sector (201,500). Despite the overall positive development, the number of enterprises with employees stood at around 237,000, the lowest level for almost a decade.
In 2023, more than 120,000 new companies were established, creating jobs for over 100,000 people. The share of start-ups among all active companies was around nine per cent, slightly below the EU average of 10.4 per cent. Most new businesses emerged in trade (19,000), construction (18,400) and manufacturing (18,400).
Data on company closures are currently available for 2022. That year, 104,500 enterprises ceased operations, resulting in the loss of more than 82,000 jobs. The closure rate of 8.1 per cent was close to the EU-wide average of 8.4 per cent.
A look at company longevity shows that the market remains both dynamic and risky. Between 2010 and 2023, only around half of newly founded companies survived the first five years. The situation was particularly challenging in trade and the services sector, where more than 55 per cent of businesses disappeared from the market within five years.
Overall, the picture is clear: the number of companies in the Czech Republic is growing, yet the market remains dynamic and challenging. New start-ups create opportunities, while the high number of closures highlights the risks facing businesses in their early years.
