Find, in this article, an overview of the Czech business climate and some tips to guide you through the setting up of your company.
2015 has been record year for the Czech Republic in business terms. Indeed, not less than 26,953 new companies have been set up in the country throughout the year. The Czech business climate had not been so dynamic since 2007. To date, the country hosts over 431,000 companies. Note that half of the newly set up companies operate in Prague, the capital city.
If you also wish to set up a company in the Czech Republic, take the time to inquire on relating conditions and formalities. In general, these should not be too difficult.
Types of companies
There are four types of companies in the Czech Republic, namely the private liability company, the public limited company, the general partnership and the limited partnership.
The private liability company involves a maximum of 50 associates whose liabilities are limited according to their amount of contribution. A minimum capital of CZK 200,000 is required.
The public limited company, for its part, involves a single owner and an unlimited number of associates. Each partner's liabilities are limited to their amount of contribution to the capital. Note that a minimum capital of CZK 2 million is required.
In the case of the general partnership, no minimum capital is required. At least two partners can set up this type of company. Their liabilities will be limited to their amount of contribution.
Finally, a minimum capital of CZK 5,000 is required for the setting up of a limited partnership with two associates. One of them will be active while the other will be considered as a passive partner. The active partner's liabilities will be limited while those of the passive partner will depend on his amount of contribution.
Good to know:
You can also set up an offshore company in the Czech Republic by choosing either the limited liability company, a joint-stock company, a general partnership or a branch.
To set up a business in the Czech Republic, you will proceed as follows:
First of all, you are required to gather extracts of the criminal regards of each partner.
You also have to request for documents proving the absence of any associated taxes arrears.
You have to make a sworn statement and provide specimens signatures of prospective managers before a notary.
The company's head office address has to be specified either by producing a lease contract or an extract of the cadastre if you are the owner of the property where the company will be domiciled.
Thereafter, a notary will have to draft the company's statutes and contract.
You are required to open a bank account in the name of the company in which you will deposit the capital. The company's contract will be requested by the bank. A written statement will then be issued regarding the payment of shares.
The company must be registered at the Office of Trade and Crafts where a permit will be issued. Application forms are available online.
You also have to register the company at the Trade Registry within 90 days following its creation date. Application form has to be submitted along with the following documents:
- two copies of the company's contract as registered by the notary
- the manager's confirmation regarding the investment of shares
- the bank's confirmation regarding the investment
- certified copies of the business licenses
- legal documents regarding the use of the premises
- a lease contract or an extract from the cadastre of real estate properties
- sworn statements of managers along with their specimen signatures
- extracts of the managers' criminal records
- a tax stamp of CZK 5,000.
The company must be registered at the Social Insurance Administration and at the and Health Fund within 8 days following its registration at the Trade Registry.
It must also be registered at the Financial Administration within 30 days.
Good to know:
Most forms are available online. However, many websites are available in Czech only. Therefore, it is best to go on the spot for more information from competent authorities.
Business Info – Czech Business Web Portal www.businessinfo.cz
Ministry of Industry and Trade www.mpo.cz
Ministry of Finance www.mfcr.cz
Financial Administration www.financnisprava.cz
The Notarial Chamber of the Czech Republic www.nkcr.cz