Establish a Foundation in Czech Republic
Establish a Foundation in Czech RepublicUpdated on Thursday 07th December 2017
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Charities or foundations in the Czech Republic are legal entities which have a precise scope and that is to collect funds and direct them to particular projects that are in most cases public. For example, a foundation in Czech Republic can sustain the research missions in varied fields or other situations of social matters. The Foundation Law and the Civil Code oversee the activities of charities in the country, with the mention that these kinds of entities need to be registered with the word “foundation” in the name. The legal terms and conditions linked to foundation incorporation can be explained by our Czech lawyers.
Types of foundations in Czech Republic
Charities are non-profit organizations registered for a single purpose: the public benefit. Foundations, associations, social co-operatives, registered institutes, religious organizations, trade unions, political parties and professional chambers in the Czech Republic are non-profit institutions, and therefore without business activities. A foundation in Czech Republic can be established by at least three individuals, according to the Civil Code with the purpose of gathering funds and support the related activities in a charity. This kind of entity can be registered with a donation of at least $20,000 (CZK 500,000) or other assets and can be run by a board of directors with at least three members who will be in charge of all the decisions made in a foundation.
According to the Civil Code in the Czech Republic, foundations cannot be established for profit-making or to sustain political views. For a proper understanding of how a foundation can be established, our attorneys in Czech Republic can provide legal support and assistance.
Taxation of Czech charities
Just like any kind of non-profit organization, foundations in Czech Republic are not subject to an income tax due on non-commercial activities. All registered institutes for public benefit are exempt from taxation, as stipulated by the Income Tax Law in Czech Republic. Additionally, charities established here that provide support in the medical sector by offering equipment or social services are not subject to VAT. Even if a foundation is registered with real estate properties, these are not going to be levied any tax.
The activities of a foundation in Czech Republic
As the name says, a foundation is engaged in public benefit activities, with charitable aims and no economic activities. Under special circumstances, foundations registered in the Czech Republic can perform business activities only if the profits generated will be used completely for the purpose of the entity or to support particular administrative expenses.
If you are interested in opening a foundation in Czech Republic, please feel free to contact our law firm in Czech Republic for legal advice.