Setting Up a Sole Trader in Czech Republic
Setting Up a Sole Trader in Czech RepublicUpdated on Thursday 18th January 2018
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Numerous investors from abroad consider that the sole proprietorship (the trade license as it is known) is the suitable form for doing business in the Czech Republic. The registration procedure involves the physical person who wants to set up the activities in this country by using his/her own name. In legal terms, a person can establish the operations as a sole trader only starting with the age of 18. Our Czech lawyers can help business persons register as sole traders and can explain the taxation matters which are different for those related to large companies.
Steps involved in a sole proprietorship in Czech Republic
Registering as a sole trader in the Czech Republic may take approximately five days once the documents are drafted with the Commercial Register. One must comply with the provisions stipulated by the Czech Commercial Code for performing business activities as sole proprietorships. Here are the requirements for sole trader incorporation in Czech Republic:
• provide personal information;
• offer details about the business address;
• provide a photo and information about the residency in Czech Republic;
• offer information about the criminal record;
• the list of selected trades;
• submit the necessary forms.
The legal matters of a sole proprietorship must be fully understood, alongside with the conditions imposed. Our attorneys in Czech Republic can offer the necessary legal assistance on request.
Taxes for sole traders in Czech Republic
Sole proprietors in Czech Republic are subject to a different kind of taxation. One should know that sole traders outside the Czech Republic do not need to pay for the public health insurance, but they need to register with the social insurance system and receive the certificate of social security. As for the direct taxes, these are issued from the taxable profits which will be deductible. It is also mandatory to register for VAT if you are having business costs for which you want to claim this tax. To correctly calculate the deductible taxes, it is suggested to hire an accountant and keep the records of the financial operations as a sole trader in the Czech Republic. We mention that the income tax for sole proprietorships in Czech Republic is set at 15%.
Benefits of sole traders in Czech Republic
This form of business can be easily registered, and it is subject to less bureaucracy. Moreover, foreigners who want to activate as sole traders in Czech Republic may do so without having to obtain a work permit in the first place. If the business operates for at least 5 years, the foreign owner can apply for settlement in the Czech Republic. We also mention that the accounting structure comprising the tax reports are streamlined for sole traders in this country.
If you want to know more about the legislation that oversees the sole traders, we invite you to contact our law firm in Czech Republic.
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