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Foreign workers turning into entrepreneurs

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The number of foreigners who stay in the country to get involved in entrepreneurship has been skyrocketing. Gastarbeiters who came to the here with ordinary work permits and visas are now losing jobs in various factories and should consequently leave the country.

Instead, however, they are flocking to get entrepreneur visas and stay on as entrepreneurs and self-employed workers. In the last six months when workers were hit hardest by the lay offs, almost 24,000 foreigners have gained “entrepreneur residence”. They do not head companies. In most cases they are Vietnamese who sew clothes within their community or ensure goods distribution for stores and stalls. Everything is legal. At least on paper.

Numbers presented by the foreigners’ police show that the increase in foreigners involved in business has been immense. At the beginning of the year, 15 800 foreigners living in the country had entrepreneur visa. At the end of June the statistics of foreigners’ police have shown 39,500 people, while no more foreigners were coming to the country at that time. Only a small part of those (over 4,000) are entrepreneurs from EU countries.

“Even for us the number is surprising. But it’s not an illegal practice, the people get the yearly entrepreneur visas according to all rules,” said the foreigners’ police spokeswoman Kateřina Rendlová. She explains that foreigners have to apply for the visa again in a year and besides many documents also a tax form issued by a local tax office is required for residency extension.

However, it is hard for authorities to find out now how many foreigners have really started their business and how many will use the visa only as a means to extend their residency here and continue for example in their illicit work.

“Everything can be arranged,” said Martina Hámová who had been dealing with the gastarbeiters issue at the Plzeň town hall until recently. Here the problem with laid-off workers and grey economy around their illegal employment has been among the most serious in the country.

In her opinion, massive numbers of various “consulting” companies have made lucrative business out of arranging entrepreneur visas for gastarbeiters.

The tactics of changing one’s work permit to an entrepreneur visa helps explain where the thousands of foreigners, whose work permit have expired, have been disappearing to. The number of valid work permits for foreigners from non-EU countries has fallen by almost 30,000 to some 102,000 in the first half of this year, according to the Labour Ministry.

“They switch to entrepreneur visas most often, and quite a lot of them disappear into the illegal sphere within their community or go to other EU countries. Only a minimum have left for their home country,” said Luboš Rajchrt, head of the Association of Personnel Services Providers and a representative of Grafton recruitment agency.

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