Open a Startup in Prague - Cost Efficient for Foreigners
Open a Startup in PragueUpdated on Monday 05th July 2021
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The startup ecosystem in the Czech Republic presents lots of benefits, particularly in the IT field. Prague, the capital of Czech Republic hosts an appealing startup community that competes with a wide range of international hubs. Investors interested in opening a company in Prague can talk to one of our Czech lawyers and find out all the legal aspects involved in the process.
Types of companies in Czech Republic
The limited liability company is the most popular business structure that meets most of the needs of a local or foreign investor in Czech Republic. This structure suits most of the business needs of a young entrepreneur interested in forming a startup in Prague, it can be easily registered and can be operational quite fast, within a couple of days if all the requirements are respected. Limited and general partnership or joint stock companies can also be ideal choices for foreigners wanting to start a business in Czech Republic. Here are a few steps to follow when opening an LLC in Prague:
- The Articles of Association with information about the owners and the business must be submitted to the Czech Trade Register.
- A bank account needs to be opened, in order to deposit the minimum share capital of CZK 1 and to serve future financial operations.
- The registration for tax purposes is required.
- If the company will have employees, the registration for social contributions is needed.
Dealing with the registration formalities as a foreign entrepreneur might seem complex, so the legal support of our Czech attorneys is recommended. You can talk to our team of advisors if you want to open a startup in Prague.
Is it hard to open a company in Czech Republic?
No, you can rapidly register a company in Czech Republic, and you can benefit from the legal support of our Czech lawyers. This is a solid advantage in front of foreigners interested in startups in Czech Republic, plus many other benefits.
10 advantages for opening a startup in Prague
The Czech Republic is a preferred business destination from many points of view, and the excellent geographic location plays a major role. The country aligns with important innovation hubs all over the world and presents a series of business advantages:
- CZK 1 or EUR 1 is the minimum share capital for starting a business in Czech Republic.
- Prague is a respected financial hub that hosts a large number of startups with foreign ownership.
- Around 50% of the active population owns companies in the Czech Republic, presenting a huge level of confidence among investors.
- There are favorable business conditions, starting with the simple registration process of a startup.
- There are around 42% innovative companies registered in Czech Republic.
- 18% of the Czech startups are registered in the entertainment, travel, and games sectors, appealing and trustworthy domains for foreigners.
- The lowest unemployment rate of Czech Republic among EU countries is also considered by foreigners.
- The Czech government sustains the startup sector with consistent and appealing programs and encouragements.
- Czech startups can be funded by venture capital, private funds, and crowdfunding.
- The tech sector is quite prolific in the Czech Republic, hosting a large number of local and foreign entrepreneurs, particularly in Prague.
Short conclusion about startups in Czech Republic
The Czech startup ecosystem is known for its fast development in sectors like technology, entertainment, cybersecurity, web services, tourism, among European countries. The government sustains the creation of small businesses in the Czech Republic by any kind of entrepreneur. There are numerous venture funds operating in the country and entrepreneurs can easily list their businesses on different crowdfunding websites. There is also the possibility of participating in programs of local accelerators and incubators to gain investments for startup projects in the Czech Republic. The entire startup ecosystem is excellently created, giving the opportunity of developing the business in a fast and reliable manner.
We also mention that starting a business in Czech Republic is subject to simple formalities and conditions. However, it is required to ask for legal advice from a Czech attorney who can oversee the registration process of your business and who can represent you with a power of attorney.
FAQ about Czech startups
1. What business structure is recommended for Prague startups?
The limited liability company is the most popular business structure available in Czech Republic, suitable for most economic activities. The formation and incorporation of a Czech LLC are relatively simple, yet you can benefit from the support of our advisors.
2. What is the minimum share capital for Prague startups?
CZK 1 is the minimum share capital for a business in Czech Republic that needs to be deposited in a local bank account. The formalities are also simple, and a bank account can be rapidly opened.
3. Do I need to register Prague startups for taxation?
Yes, it is mandatory to register for tax purposes before activating your startup in Czech Republic. We have a dedicated team of Czech lawyers who can help you with this task. If you hire staff for your business, registration for social contributions is also mandatory.
4. Can I open a startup as a foreigner in Czech Republic?
Yes, there are no restrictions for opening Prague startups if having a different nationality. The legislation allows equal rights to both local and foreign entrepreneurs in this country.
5. What are the costs for Prague startups?
Most of the costs refer to the preparation and incorporation of the documents, licenses, and permits if needed, and the ones linked to the services of a representative agent. If you discuss with our Czech lawyers you will find out all you need to know about the costs of a startup in Czech Republic.
6. Can I promote my startup in Czech Republic?
Yes, it is quite simple to benefit from the support offered by all sorts of business communities that relate to startups. You can easily access funds if your business idea is doable and it has strong development potential.
7. What are the sectors in which a Prague startup can be successful?
The IT sector is quite generous and offers plenty of opportunities to both international and local entrepreneurs. The game and entertainment sectors, alongside food and agriculture, are also top fields in which a startup can activate and generate profits.
8. What is the percentage of startup companies in Czech Republic?
The startup sector is quite appealing in Czech Republic and continues to develop at a fast pace. Around 42% of the companies registered in this country are startups.
9. Is it hard to open a startup in Czech Republic?
No, there are no complex formalities linked to a Prague startup. Plus, you can benefit from guidance and support from our Czech lawyers.
10. Do I need legal advice when opening a Prague startup?
Some aspects required legal counseling from a specialized lawyer in Czech Republic. Tax registration and compliance, licenses and permits, contract verifications are a few of the tasks that enter the attention of our Czech attorneys. We have a dedicated team of advisors who can help foreign entrepreneurs form a startup in Prague.
A generous climate for Prague startups
The Czech Republic ranks 27th in the Global Innovation Index report, and the country has more than 50% of the total population in the field of entrepreneurship. These figures show that the country is a great destination for startups, particularly in Prague, the capital of Czech Republic. The advantageous and encouraging business conditions, plus the solid climate are top benefits for international and domestic investors looking for a competitive and appealing market.
Working with our Czech lawyers
It might seem difficult for a foreign businessman to activate on the market and implement the economic operations without completely knowing the environment and the legislation. It is quite advised to have the legal support of an experienced lawyer who can manage the key aspects of investments and businesses in the Czech Republic.
The creation of company documents, tax registration, support for licenses and permits, business planning and consulting, translation and legalization services are part of the support we can offer to entrepreneurs from overseas and the local ones, at affordable costs.
Moreover, one can purchase virtual office packages and also buy a shelf company for a startup in the Czech Republic. A free case evaluation or requesting a call back are important services at the disposal of businessmen in this country.
We kindly invite you to contact our law firm in Czech Republic and to find out more about how you can open a startup in the Czech Republic. Our team is at your disposal with complete legal advice and assistance.