The tax burden represents a major barrier for 72% of respondents. The most frequently mentioned issues were taxation of labor combined with high social contributions, which is especially challenging for early-stage startups. The second biggest obstacle (64%) is administration and regulation, particularly topics related to insufficient digitalization of public administration, complex accounting, and reporting requirements for the state.
Legislation related to labor law and the lack of qualified specialists form another comprehensive barrier to growth, according to 61% of respondents. Examples include legal uncertainty when working with self-employed individuals (OSVČ), complicated and lengthy visa processing for foreign workers, and a shortage of qualified labor outside Prague and Brno. Another obstacle cited by startup founders is access to capital (59%), where respondents mentioned a weaker VC ecosystem in the Czech Republic, the low risk appetite of Czech investors, and significantly lower investments across various development stages compared to countries such as the USA, the UK, or Germany.
Martin Jiránek, Chairman of the Czech Startup Association, commented:
“The survey results clearly show the areas where startup founders see brakes and obstacles to their business, as well as those where the Czech environment works well. On a broad sample of respondents, we have confirmation of what to focus on with the new government in order to lift the quality of the Czech startup environment from the lower ranks in Europe to among the best-performing countries. The next step is to include these main topics in the Government’s Policy Statement while preparing the details of possible solutions. Together with partners, we are already working to ensure that the new government can start implementing the changes as quickly as possible.”
Markéta Přenosilová, Startup Europe Ambassador of CzechInvest, added: “We see the fact that startups openly identified the barriers to their growth as an opportunity, not a problem. They confirmed our previous assumptions about the areas in which the Czech innovation environment needs change. Thanks to these data, we can systematically remove obstacles hindering innovation growth together with partners in the ecosystem and bring conditions in the Czech Republic closer to the standards of the most advanced European economies. The finding that a third of startups are considering relocating abroad is a clear signal of the need to modernize the tax and legal framework. Proof that change is possible is the recent approval of employee stock option programs. We want to build on this success by removing further barriers through the Startup Act, which will offer modern and competitive conditions for innovation development in the Czech Republic.”
A third of Czech startups are actively considering relocating their headquarters abroad, or have already done so: nearly 6% have already moved, and almost 25% are seriously considering it. Another 42% of startups are open to this option. Only about a quarter of startups (28%) want to keep their base in the Czech Republic. The primary motivations for relocation include the tax burden, the inability to effectively use ESOPs, and foreign investors’ lack of trust in the Czech legal framework.
Conditions for employee stock ownership will improve starting in January 2026, when changes to the Employer’s Unified Monthly Report Act come into effect, allowing Czech startups to better motivate and reward their employees.
The survey clearly shows that Czech startups need more than just partial adjustments – they are calling for systemic changes that will allow them to grow at home rather than seek opportunities elsewhere. Although the ESOP amendment was finalized this year, major challenges remain, especially in the areas of tax burden, cooperation with self-employed individuals, and employing foreign experts.
The survey was part of a broader analysis of the startup environment published by the Ministry of Industry and Trade in September, in cooperation with the Office of the Government, CzechInvest, and the Czech Startup Association. Based on this analysis, a Regulatory Impact Assessment (RIA) is currently being prepared to support the drafting of the Startup Act. At the same time, further negotiations and analyses are underway within the Coordinating Council for Investors and Startups (KRIS), including the introduction of ESNA Startup Standards and the so-called 28th regime at the European level, which could enhance the competitiveness of Czech companies.
Štěpán Hofman, Deputy Minister, Ministry of Industry and Trade, commented: “The survey confirmed the existence of obstacles and barriers in the Czech startup environment that we identified in the overall analysis of this sector. I am therefore very pleased that we have succeeded in launching the process of drafting a new Startup Act, which aims to eliminate the most significant barriers and move the Czech economy toward greater competitiveness and innovation.”
Kamila Zahradníčková, Co-founder and CEO of Lakmoos AI, added: “The issue of startups leaving is close to us. Similar questions are being addressed not only by us, but by most founders around us. Sooner or later, every successful startup reaches a point where it must consider where its growth makes the most sense – and often, that’s outside the Czech Republic. If the environment doesn’t fundamentally change here, it’s a natural step for many companies, not an escape.”
Jitka Paterová, Founder and CEO of Eterny, comments: “The tax and administrative burden takes away space for development and investment, which bring new services and greater competitiveness. Just explaining to the tax authorities what software development entails or how intangible assets work is often very demanding. In fintech, this is multiplied by regulation and slow processes, even though demand for digital services is constantly growing. Innovation needs above all flexibility, pilots, and real support – not more paperwork.”
Karel Havlíček, Deputy Chairman of ANO, says: “For further improvement of the startup environment, exactly this kind of feedback is crucial. Some of the areas mentioned – the need to strengthen venture capital, simplify cooperation with self-employed individuals, reduce bureaucracy, or further improve ESOPs – are already part of our economic strategy. As soon as the government is appointed, we will start working on them. In terms of the size and development of the startup sector, the Czech Republic is far below its potential, and our society is unnecessarily losing talent, innovation, and profit as a result.”
The highest-rated area in the survey was “Network and ecosystem support.” Two-thirds of respondents (66%) stated that these topics do not hinder them or only do so to a small extent. They positively assessed, for example, the sharing of experience among founders, available mentoring, quality IT talent, and a strong foundation in technology. Overall, the Czech startup environment received an average rating of 3.2.
Among the 222 online respondents were startups from various sectors, most commonly AI & Data, Industry and Manufacturing, and Software Infrastructure. Data collection took place from August 27 to September 14, 2025, and focused on six main areas: Administration and Regulation, Taxes and Costs, Access to Capital and Financing, People and Labor Relations, Network and Ecosystem Support, and Expansion Abroad. Startup founders were invited to participate directly by the survey organizers and also through venture capital funds, business accelerators, and innovation centers.
