Company registration in Czech Republic
The state is one of the most attractive locations for doing business in Europe. Here you can buy both a ready-made company and set up a new legal entity. It is available both to citizens and foreign residents. Thanks to a local firm, you can manage your international business in the homeland and anywhere in the world.
There is still some bureaucracy, so it will not be possible to incorporate an establishment quickly, unlike in Western European countries. And if you can enter the Czech Republic business register remotely through our law firm.
Advantages of opening a company in the Czech Republic
Although it may not be easy to enlist a commercial company in the Czech business register, it does provide certain privileges. First, it is a stable economic and political situation and an attractive place to live in general. If you live in this country and manage businesses, you can get a residence permit over time.
The residence permit of the Czech Republic allows you to move freely within the EU, establish your own business, open a bank account, rent or purchase real estate, as well as rent out your property. Moreover, it grants the right to receive education in the country and issues invitations for foreign citizens for up to 90 days. But most importantly, after 5 years of living, you get the right to permanent residence, and after another 5 years, you will be able to apply for a Czech passport.
Also, you should consider the legal framework:
- Shell firms that exist only on paper and do not generate income are prohibited. Previously, such a scheme remained conditionally legal, but the situation has changed. To invite foreigners to work, the company must actually function.
- A company’s director who lacks citizenship is not permitted to work on Czech territory, even if they are listed in the constitutive documents. To achieve this, it is necessary: a) to conclude an employment contract, b) apply for a vacancy, and c) obtain a work visa. In addition, you need to meet other conditions.
- All Czech companies, regardless of the director’s and founders’ citizenship, are required to submit tax returns. And if there are employees in the state (including the director!), you will still have to contribute to pension and other funds.
For company registration in the Czech Republic, it is not necessary to include local citizens on the board of directors or as co-founders. And the size of the authorized capital is only one Czech koruna (CZK). This is the generally accepted amount. Although the law requires a minimum capital of one koruna, the state record-keeper is suspicious of such firms, so it is better to deposit approximately 20 thousand after all.
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Why choose Fintech Harbor Consulting to register a company in the Czech Republic?
If you are looking for a proper jurisdiction for your business, our consultants are always ready to advise and help. We have been supporting entrepreneurs in Europe for several years. Therefore, we will guide you through all stages, from entering the company in the Czech trade register to opening a bank account, obtaining a VAT number, and setting up an office in any city in the country.
We will also advise you on the specifics of local taxation and help you complete all the formalities for a successful business. Our lawyers will draft the complete papers and submit the essential applications. You will receive the statutory documents at your office via courier delivery or at a personal meeting with us. It usually takes 15-20 business days to register a company in the Czech Republic from the date of application.
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Costs for company formation in the Czech Republic
Czech company formation will cost you 1600 euros.
Requirements for Company Registration in Czech Republic
Company registration in the Czech Republic should be carried out after determining the type of activity you plan to engage in.
To open a company in the Czech Republic, the potential owner must do the following steps:
- Check the name of the future company.
- Obtain a certificate of criminal record, and translate it into Czech.
- Obtain a legal address (initial) for 1 year.
- Open a bank account.
Prepare necessary founding documents. - Pay state fees.
- Register the company in the Commercial Court and Finance Department.
- Make the seals of the future company.
Main types of companies
Company formation in Czech Republic can be carried out in the following organizational and legal forms:
- “S.R.O.” (společnost s ručením omezeným) – limited liability company.
- “A.S.” (akciová společnost) – joint stock company.
“Zivnostenský list” – private entrepreneur. - “V.O.S.” (veřejna obchodní společnost) – public business company.
- “K.S.” (komanditní společnost) – limited partnership.
- “Družstvo – cooperative.
S.R.O. registration in the Czech Republic is the most popular, especially for small and medium-sized businesses.
As in many countries, partners are liable for the company’s obligations only to the extent of the contributed capital. The company is liable for breach of its obligations with all its assets.
Critical features of S.R.O. in the Czech Republic:
- The period of existence of the company is not limited.
- The company can be excluded from the register only by court decision.
- The company submits an annual report once a year until March 31 of the following year, and in case of large turnover – quarterly.
- A director of the company may also be the founder.
- By law, a director may not have a work permit in the company but work with the company under a civil contract as a natural person.
- There is no limit on the number of directors. Director can independently decide any issues concerning the company unless otherwise provided by the charter.
- It is necessary to deposit the share capital in the company’s bank account. It is not necessary to be a resident of the Czech Republic to establish an S.R.O.
- A director must not have a criminal record (neither in the Czech Republic nor in any other country) for financial crimes.
- The founder may not be the sole shareholder of more than three S.R.O.s simultaneously.
Corporate taxes in the Czech Republic
The Czech Republic has been a member of the European Union since 2004 and is subject to the jurisdiction of the EU Parent-Subsidiary Directive. No income tax is levied on income from dividends or capital gains from companies affiliated with a Czech parent company in the EU, provided that its ownership share exceeds 10%.
- Income tax – 15%
- Corporate income tax – 19%
- VAT – 21%
How to open a bank account in the Czech Republic
To register a company in the Czech Republic, you need a special bank account. The share capital is deposited into it, which is frozen until the company is registered in the Commercial Register.
To open an account in the Czech Republic, it is necessary to provide proof of commercial activity: trade license, officially certified extract from the commercial register of the country in which the company was established.
Foundation documents are submitted to the Czech bank, translated into the Czech language, and duly certified and legalized.
The time for consideration of the application to open an account varies. It all depends on the workload of staff at different stages. You can wait 3-4 working days or two weeks for the bank’s decision. The process can stretch out for 2-3 months, taking into account the finalization of documents.
Steps to set up a company in the Czech Republic
You first need to choose the right form of doing business. This can be a Limited Liability Company (S.R.O.), a joint-stock company (A.S.), a public company (V.O.S.), or a cooperative (družstvo). Also, a private person can register as an individual entrepreneur (živnostenský list). Typically, small shops and service industries without employees choose this form. Most often, SRO and AS are registered.
At the second stage, you need to check the name of the future establishment in the Czech trade register so that a previously registered business does not duplicate it. The company’s owner must provide a certificate of good conduct, register a legal address for one year, and set up a bank account. All submitted applications must be translated into Czech.
After paying the state fees, it is essential to prepare a notarized memorandum of association, register the company with the Commercial Court and the Financial Department, and produce a seal. Register the organization’s address to receive correspondence from all government agencies. After the end of the process, the record about the company will appear on the official state website of the Czech Trade Register and will be available to the public.
Reviews
My children study in the Czech lands. Therefore, I decided to move my business to this country. The lawyers of Fintech Harbor accompanied the whole process very competently. I recommend them as professionals.
The potential of this Eastern European land is huge and the labor of hired employees is cheaper. Therefore, starting a business here was a great idea. I did not regret applying to Fintech Harbor, and the relocation process went very smoothly.
FAQ
How do I check if a company is incorporated in the Czech Republic?
All data on individual entrepreneurs and large companies in this country are open to public access. Just go to the site of the trade register of Czech Republic to check information about a particular organization.
The website www.rzp.cz is available in Czech and English. To find a counterparty, you need to know either the identification code of the company or its full name. You can also search by legal address. This resource is free. You can find out the contact details of the company, its address, and information about branches and representative offices.
Can I start entrepreneurship in the Czech Republic?
Yes, you can business register Czech Republic. Local legislation allows you to open a business for state citizens and foreigners. A foreign person can reside in the republic or any other country. The process of entering the trade register in the Czech Republic is conducted remotely. However, if you apply for a residence permit, you still have to settle here for at least 5 years and live for a decade to apply for citizenship.
Is the Czech Republic good for business?
Yes, this is a very interesting country in terms of commercial activity. The economy is stable, and the local government stimulates foreign investors. In addition, the local population has a good education, speaks foreign languages, and wages are lower than in Western Europe or the USA. Therefore, moving production or an office here can be cost-effective. The Czech Republic also has good transport links with EU countries and a single time zone, making it easier to work with European clients. The country is not considered offshore, so companies listed in the Czech Republic trade register have a good reputation in the international arena.
Can a foreigner start a business in the Czech Republic?
The Act on Freedom of Economic Activity, based on the participation of foreign entrepreneurs and other foreign persons in trade, gives foreigners the right to open a business in the Czech Republic.
How to register a company in Czech Republic?
Company Registration in the Czech Republic involves the following steps:
- The choice of a unique name.
- Selection of the subject of activity.
- Obtaining a registered office in the Czech Republic.
- Preparation of the list of directors, founders, and shareholders of the company.
- Determination of the amount of the share capital.
- Registration of the articles of incorporation with the notary.
- Registration at the Trades Licensing Office.
- Opening a bank account and the payment of the share capital.
- Registration at the Commercial Registry and with the Tax Office.
What are the terms for registering a company in the Czech Republic?
On average, company formation in Czech Republic takes from 14 to 30 days, including the preparation of the necessary documents.
What licenses and permits are needed for business in the Czech Republic?
Company formation in the Czech Republic involves obtaining a license for almost all types of activities.
To open a store, real estate agency, consulting agency, making export and import, and provide intermediary services requires a license from the list of free and easy. You do not need special education or experience in this field to get it.
Opening a restaurant, cafe, bar, disco, casino, travel agency, hotel, or production requires a complex license. To get it, you need special education and experience.
What are the costs of doing business in the Czech Republic?
Company formation in the Czech Republic can be done with a start-up capital of just 1 crown. The cost of doing business in the Czech Republic is much lower than in neighboring European countries, but the country is quite comfortable to work in.
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