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Company Registration in the Czech Republic

Company Registration in the Czech Republic

Updated on Sunday 26th January 2020

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Czech law allows foreigners to conduct business activities under the same conditions as the Czech entrepreneurs. In order to register a company in the Czech Republic, entrepreneurs should consider asking our lawyers in the Czech Republic for advice, as they can provide them with assistance and further information on the whole registration process. Business management and tax advice can be offered to investors who want to open companies in Czech Republic.

 

Types of companies in the Czech Republic

 

When registering a company in the Czech Republic, foreign investors should first decide on the type of legal entity they want to establish. The most commonly incorporated type, however, is the limited liability company (LLC); there are various differences between an LLC and the other types in terms of registration steps. Partnerships, joint stock companies or sole proprietorships are available entities for business persons from overseas. More details on the registration of a company in Czech Republic are available in the video below:
 

YouTube Player

 

Our Czech lawyers can guide you through the entire process of registering a company in the Czech Republic as they have expertise in these matters, as well as in other legal issues you may encounter.
 

Steps for registering a company in the Czech Republic

 

When registering a legal entity in the Czech Republic, some steps have to be followed and the ones for an LLC are hereunder:
 
  • the first step of the registration process is to choose a name for your company and then check its uniqueness in a database from the website of the Ministry of Justice;
  • the Articles of Association and the lease agreement must be notarized. The notary has to follow the requirements of the founders;
  • the third step is to obtain the administrator's confirmation of the contributing capital to the company. The bank's confirmation that the capital contribution is being held in the special bank account of the company is also needed;
  • one of the most important steps is the registration with the Trade Licensing Office where you have to acquire an extract of the trade license. Some of the papers that must be submitted are an application for registration, the memorandum of association, proof of paying the administrative fee etc.;
  • entrepreneurs need to register with the Business Registry of the Regional Commercial Court;
  • the registration for taxes with the tax office and also for social security with the Social Security Administration in the next step of registration of a company.

 

Main steps for company formation inCzech Republic.png

 

The structure of a company in Czech Republic

 
The limited liability companies, the partnerships and the joint stock companies are common structures for foreign entrepreneurs in the Czech Republic who want to start their businesses in this country. The following table shows the legal structure of the above-mentioned forms of business available in Czech Republic:
 
 
Business forms 
LLCs
Joint Stock Companies 
Limited&General Partnerships
Stockholders
Legal entities or natural persons
Legal entities or natural persons
At least 2 shareholders or legal
Business Structure
Directors, supervisory board or sole stockholder
Board of directors, general meetings
All general and limited partners which create the statutory body

 

Our Czech lawyers specialized in opening companies are at the disposal of investors who want to register a company and need a legal advice in this direction.

 

How can I open a joint stock company in Czech Republic?

 
Joint stock companies can be set up with a minimum share capital of EUR 75,000 payable in 5 years, a supervisory board and a board of directors. Such business entities have strict rules compared to LLCs for example and are chosen by foreign investors interested in the stock exchange in the Czech Republic.
 

Can I register a branch in Czech Republic?

 
Yes, companies from abroad can establish branches through limited liability companies in Czech Republic and in respect to the rules and regulations of the parent company from the home country. These aren’t separate legal entities and they can be registered with the local Trade Register in compliance with the registration requirements of this institution.
 

How to open a bank account in Czech Republic

 
Each company with establishments in Czech Republic needs to open a bank account by providing the firm’s main documents, like the Articles of Association. First, a provisory bank account is opened for depositing the minimum share capital, and then a permanent bank account will serve to the company’s financial operations. One must observe the banks' fees at the time of registration. Support cn be offered in this matter by our Czech lawyers who can also help you register the company for VAT.
 

What are the documents for tax registration in Czech Republic?

 

The following documents are necessary for tax registration purposes in Czech Republic:
 
  • application form and the notarized lease of the headquarters' premises of the company;
  • the notarized articles of association and contributions' confirmation of each founder from the administrator;
  • data about the company's managers, their liabilities, the voting rights;
  • information about the activities of the company and the date of commencement.

 

Investment incentives for foreign entrepreneurs

 
The Czech government is aware of the importance of investments and the support they can offer for the overall economy. A series of encouragements are at the disposal of foreigners in the form of investment incentives and most of them are directed to the IT sector, manufacturing, research and development. For example, there is no property tax for a period of 5 years for companies established in the industrial zones in the Czech Republic. Also, foreign companies with establishments in the Czech Republic do not need to pay the corporate income tax for 10 years. Granting several job positions and training sessions for the local workforce come with a series of tax exemptions for companies registered with foreign capital. The Czech government also grants financial support of no more than 10% of the costs of fixed assets in the firm. Supplementary details about the investment legislation for foreigners in the Czech Republic can be solicited from our Czech team of lawyers.
 
 
For further details on how to register a company in the Czech Republic, our Czech law firm can be of help and also counsel you through the whole process, so feel free to contact our Czech lawyers.