Updated 2 days ago

The Czech Republic may not be the first country that comes to mind when you think of an economic powerhouse. However, the country boasts a rapidly developing economy and provides fruitful ground for small businesses in various fields thanks to the relatively low cost of labour, rent, and a favourable tax environment compared to most other countries in Europe. 

Nonetheless, if you wish to set up a company in the Czech Republic, take the time to enquire on related conditions and formalities.

Types of companies

There are four main 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 (a bit over 7,750 euros) 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 (over 77,500 euros) is required and at least 30% of this amount must be available at the time of incorporation.

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 (a bit under 200 euros) 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.

Procedures

To set up a business in the Czech Republic, you will need to produce the following documents:

  • criminal record of all involved in company incorporation
  • documents proving the absence of any associated taxes arrears
  • sworn statement and 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. The 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 (less than 200 euros).

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.

 Useful links:

Business Info – Czech Business Web Portal
Ministry of Industry and Trade
Ministry of Finance
Financial Administration
The Notarial Chamber of the Czech Republic

We do our best to provide accurate and up to date information. However, if you have noticed any inaccuracies in this article, please let us know in the comments section below.