In this article, we will mention Doing Business in the Czech Republic. It is a summary of some important points, which are important before making a decision to do business in the Czech Republic.
WHY THE CZECH REPUBLIC?
The Czech Republic has attracted many foreign investors in recent years as one of the most developed countries in Eastern Central Europe. It is one of the most popular European countries among foreigners.
It is cheaper compared to other Central European countries. It has an advantageous and strategic position as a result of being neighbored by:
- Austria, and
Inflation rates are quite low in the Czech Republic. The advantages of establishing a company in the Czech Republic are talented, educated, and cheap labor force. The minimum wage is equivalent to 574 Euros as of 2020.
Gurcan Partners help many foreign investors who would like to establish a company in the Czech Republic, with our office in Prague. Our attorneys who are experts in their field provide comprehensive service.
COMPANY TYPES AND REQUIRED CAPITAL FOR THE ESTABLISHMENT IN THE CZECH REPUBLIC
Joint-stock and limited liability companies are the most common company types in the Czech Republic. The required minimum capital to form a limited company in Czechia is 0.02 Euros, whereas the amount for a joint-stock company is 80.000 Euros.
In some cases, joint-stock companies can offer advantages limited companies can’t. Incorporated company types are more advantageous for larger companies, whereas limited liability company types are more suitable for small to mid-sized companies. In this article, we aim to give more information about the establishment of a limited liability company.
Limited liability company types are named “Spolecnost s Rucenim Omezenym (SRO)” in the Czech Republic. The minimum capital needed to form a company is CZK 5 (approximately 0,2 Euros). Shortly, there is no capital limitation for company establishment.
STARTING A BUSINESS IN THE CZECH REPUBLIC – PROCEDURE, TIME AND COST
- Check the uniqueness of the company’s name: Business founders can verify the uniqueness of their company’s name online. Takes less than 1 day. Click to reach the website of the Ministry of Justice. (justice.cz)
- Notarize Articles of Association and Lease Agreement: This procedure takes 1 day. The cost of notarization depends on several factors.
- Obtain confirmation of the administrator of the capital contribution of the company, along with the confirmation of the bank that the capital contribution is held in the company’s special bank account: This procedure can be done in the bank and takes up to 2 days.
- Register with the Trade Licensing Office and obtain an extract of the trade license: Can be done in the office in person or can be done online via this address: http://www.rzp.cz/elpod.html. This procedure takes 2 days.
- Register in the Business Registry of the Regional Commercial Court through a notary: This procedure takes 1 day and the court verdict is received in 5-7 working days.
- Register for income tax and VAT: Can be done from tax offices and this process takes 2-3 weeks.
- Register beneficial owners with the local registry court: Takes 1 day
- Register for social security: Takes 1 day.
- Register for health insurance: Takes 1 day.
As seen above, there is a procedure of 9 steps to complete SRO formation in the Czech Republic. Gurcan Partners has an international team that is able to perform all steps required to establish a company with ease due to their accumulated experience.
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DOING BUSINESS SCORES OF CZECH REPUBLIC
According to World Bank Group’s Doing Business 2020 Czech Republic report, the Czech Republic has scores of;
- Starting a business 82.1/100
- Getting credit 70/100
- Protecting minority investors 62/100
- Trading across borders 100/100
TAX RATES IN THE CZECH REPUBLIC
Some tax ratings in the Czech Republic:
- Corporate income tax: %19
- Profit tax: %15
- Value-added tax (VAT): %21
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INFLATION RATES IN THE CZECH REPUBLIC
As of April 2020, inflation rates in the Czech Republic have been calculated as 3.2%.
MAIN INDUSTRIES IN THE CZECH REPUBLIC
- Agriculture: Organic agriculture is very developed. The Czech Republic is one of the world leaders in hash production.
- Industry: Industrial sector labor force makes up 40% of all labor force.
- Tourism: The Czech Republic is one of the biggest tourist attractions in Europe. 35% of service revenues are obtained from tourism.
- Energy: In the Czech Republic, coal is the most produced energy material. Nuclear energy use has doubled in the last 5 years.
- Retail Sector
Doing Business in Czech Republic
Att. Bedrettin Gürcan
Feride Zülal San LLB
All rights reserved. All rights of the Doing Business in Czech Republic article belong to Gurcan Partners International Law Firm. The author has no responsibility for the information in this article. This article is prepared just to inform.
Gurcan Partners Czech Republic
Prague Office: + 420 2 347 17 540 (English)
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As Gurcan Partners International Law Firm, we provide services with our office in five EU and five non-EU countries. Please find our articles below.
Company Formation in the Czech Republic
Buying Property in Czechia
Taxation in the Czech Republic
Invest in Czech Republic
Company Registration in the Czech Republic
Mergers and Acquisition in Czech Republic
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