In many ways, the Czech Republic is still trying to overcome its reputation as a difficult country in which to do business. During the '90s, the notorious bureaucracy, language barrier and restrictive laws made it very difficult for foreigners to start businesses, much less buy real estate and get settled. When Společnosti Online (Companies Online) set up shop in May 2001, it was with the idea that problems relating to foreign investment and property ownership could be overcome if a creative solution-provider stepped in to cut the red tape and clear the way for good business practices. Společnosti Online pioneered the concept of buying a "ready-made" business, one already licensed and registered in the Czech Republic that foreigners can acquire easily and use immediately. More recently, the company moved into post-sale infrastructure services, such as providing office facilities and support services.

Company Director Tomáš Chrobák recently sat down with The Prague Post to talk about his company's success and why it continues to expand year after year, greatly contributing to foreign investment.

The Prague Post: What was the original motivation behind the company and whose brainchild was it?

Tomáš Chrobák: Originally we were part of the Akont Group of companies, and it was while the UK partners and Czech associates were dealing with business solutions that we realized there was a great need for simplifying the buying and selling of companies and real estate, and it would be a great idea to set up Společnosti Online. Once we got the go-ahead from Akont, the company was born and runs autonomously today. The motivation was more to fill a need with an innovative solution.

TPP: How does the average businessman respond to Společnosti Online? Is he suspicious or grateful?

TC: In the first couple years, it was difficult to trust the concept of a business that sold ready-made companies. It took a while for the trust factor to develop; people felt safer taking the long route to form a new company. Even though the amendment to the Commercial Code made in 2005 specified the registration process to be a five-day process, there are still a lot of business complexities to understand, and in reality it ends up taking more time.

So we decided at first to make legal firms our clients. This was a smart move, because if lawyers trusted we were clean, efficient and above-board, they would have no problem convincing their clients that doing business with us would be a great idea. It took a while, but our track record shows how well we are doing each year. Even Czech businessmen have realized that doing business with us means speed and efficiency. In fact, 75 percent of our clients are Czech and the balance are international.

TPP: What is the main reason for helping a businessman buy a ready-made company?

TC: Of course, the main aim was to purchase real estate. But nowadays, we find that purchasing a ready-made company and actually running an office in Prague has also become quite common. So I would say it's a good balance of both. Spreading the risk by buying property through a company is a smart way to operate, and a lot of European Union businessmen are doing that instead of the usual mode of direct acquisition.

TPP: You mentioned that the 2005 amendment to the Commercial Code has not affected your business. Why is that? It would seem to make your function pointless.

TC: People still require expert advice to take them through the steps of company registration, figuring out whether it is a "clean" company or not. And language is still such a barrier. If we maintain good relations with lawyers and accountants, they are naturally going to recommend that we deal with their clients. And we have excellent relations with top law firms like Clifford Chance, Linklaters, BDO and other such trusted organizations. Our business has only grown as a result. In fact, we have just sold our 2,000th ready-made firm. That's a good number since 2001.

TPP: What has been the biggest noticeable change since you started?

TC: We have seen a great influx of clients since we started. At first, the trust was slow to come. But once word-of-mouth established that we were proficient at what we did, there was no stopping the growth. Also, people were hopeful about business in the wake of accession to the EU. Confidence in the Czech market was growing, and consequently our network of services has also had to grow.

In addition to Společnosti Online, we set up another company called Office House, which deals more with infrastructural consultancy once an office has been set up. So I would say the biggest and most pleasant change in the market and in our business has been the number of people and the kind of people who came to us — everyone from law firms to developers. There's been great interest shown in doing business quickly, minus the red tape.

TPP: Aside from the country's economic growth, what has been the secret of your success?

TC: Novelty. It was a new idea when we started it, and even today, we don't really have any significant competitors. It takes a lot to have the kind of in-depth knowledge about offering someone a solution like a ready-made company, so not everyone can get into this game.

Nearly 30 percent of joint-stock companies were registered by Společnosti Online. We extended our services to Bratislava, seeing as business was growing there. There was a lot of interest in this idea, which seemed unique to them as well.

However, we are not sitting on our laurels. To prevent a future saturation point, we are constantly delving into research and looking for new services to offer our clientele. That is exactly why we set up Office House in 2003. We also have very good follow-through procedures, so our clients know we are right there in case of any hiccups, even after they have purchased a company.

TPP: What is the bulk of your services now — selling ready-made companies, or helping create office infrastructure post-sale?

TC: At this point, I would say purchase. Of course, this naturally includes setup; in fact, since the establishment of Office House, infrastructure has become a big part of the business. But primarily, I would say it is still the purchase option of a company. That is the easiest and most logical route to buying real estate, so that you can have your own home to live in while conducting business through the company you've just bought.

TPP: Who are your biggest clients today?

TC: We have a healthy mix of law firms, taxation and audit firms, real estate developers and operators and a mixed bag of other professional firms. In sheer terms of percentage, law firms are our biggest clients. We don't give legal advice to our independent clients, because we are not a law firm, although we are very aware of the legal requirements that go into the purchase of a ready-made company. We find that it is a mutually beneficial relationship for us and the law firm regarding the end purchaser, who is secure in the knowledge that his law firm has led him to the right people. Everyone wins.

TPP: What motivates you personally to continue working at Společnosti Online?

TC: I believe that business can be simple, quick and effective. We should certainly help people with buying companies here, because it helps economic growth in the Czech Republic. And most especially it mitigates the idea that it's impossible to do business in this country.

TPP: Can you sum up the philosophy of your company in one sentence?