Register Company in Czech Republic

Register company in Czech Republic

• For investors seeking to register company in Czech Republic, leveraging the nation’s robust trade relationships and commercial ties across global business hubs can be advantageous. The country’s stable economic environment, situated at the heart of Europe, presents an enticing opportunity. With a skilled labor force and competitive labor costs, registering a company in the Czech Republic can yield numerous benefits.

• By setting up a company in the Czech Republic, foreign investors can tap into the nation’s extensive trade networks, facilitating smoother international transactions. Furthermore, the Czech Republic’s membership in prominent organizations such as the Organization for Economic Cooperation and Development (OECD), European Union (EU), World Trade Organization (WTO), and North Atlantic Treaty Organization (NATO) enhances its standing in global trade, making it an attractive destination for business formation.

• Tetra Consultants specializes in facilitating the incorporation of companies in the Czech Republic, harnessing the nation’s robust trade connections and commercial affiliations worldwide. Moreover, we streamline the process of obtaining a Czech crypto license, empowering businesses to navigate the regulatory framework seamlessly while operating in the cryptocurrency sector. We provide comprehensive service packages which includes:

• Register company in Czech Republic

• Accounting and tax obligations

• Nominee director and shareholder services

• Registered agent and office address services

• Corporate bank account opening

• Czech crypto licenses

How long does it take to register company in Czech Republic and open a corporate bank account?

• Tetra Consultants streamline the process to register company in Czech Republic, offering comprehensive services to ensure efficient incorporation. Typically, our process takes 3 weeks, varying based on the application’s complexity. We handle all aspects, from document preparation to obtaining the Certificate of Incorporation, providing clients with seamless experience.

• The registration is facilitated through the Trade License Office, a mandatory step for establishing a company in the Czech Republic. This regulatory body oversees the incorporation process, ensuring adherence to legal procedures.

• After registration, our experts proceed with corporate bank account opening services. Within 4 weeks post-incorporation, clients will have a fully operational business account, enabling them to commence operations swiftly and smoothly.

Can a foreigner register company in Czech Republic?

• Yes, foreigners can own up to 100% of a company in the Czech Republic, as there are no specific residency requirements for company ownership. Tetra Consultants facilitates the establishment of businesses in the Czech Republic for both natural persons and legal entities. Our services guide foreign investors through the legal procedures for company formation, ensuring compliance with all registration requirements. This includes assistance with providing necessary documentation, selecting a distinctive company name, and fulfilling other essential registration criteria. With Tetra Consultants, foreign investors can confidently navigate the process of owning and operating businesses in the Czech Republic.

Types of companies in Czech Republic

There are distinct type of companies available in Czech Republic which are as follows:

Limited Liability Company (S.R.O)

• It is a legal entity separate from its owners that offers limited liability protection, allowing shareholders to conduct business while limiting personal liability for debts and obligations. There are various statutory requirements for such company which are as follows:

• These companies must have a minimum investment of CZK 1.

• A minimum of one shareholder can be a legal person or natural entity without any residency requirements.

• A minimum of one director without residency requirements.

• It is mandatory for businesses incorporated as LLCs to have a name having “S.R.O.”

• It is essential to have a local registered address.

• There is no mandatory requirement to appoint a company secretary.

• LLC does not mention an explicit requirement for a local shareholder and director, but if your company requires it Tetra Consultants can help you by providing nominee director and shareholder services. With Tetra Consultants help you can register LLC in Czech Republic without any difficulty. Our experts are dedicated to serving our clients with the best service. We can help you with all the compliances to form an LLC in Czech Republic.

Limited partnership (KS)

• A limited partnership in the Czech Republic is jointly owned by multiple individuals, consisting of both general partners, fully accountable for the business’s debts, and limited partners, whose liability is confined to their invested capital specified in the articles of association. The company must have a minimum of two partners, with at least one being a general partner. Additionally, each limited partner is required to contribute a share of the fixed capital, typically not less than CZK 1, as outlined in the articles of association. Formalizing a limited partnership entails concluding a memorandum of association between the partners. Tetra Consultants offers document drafting services and seamless company registration guidance, ensuring a hassle-free process for clients, all accessible from their desks.

General commercial partnership (unlimited partnership)

• In the Czech Republic, a general partnership is jointly owned by two or more individuals, each bearing unlimited liability for the company’s debts and obligations. This means every member shares equal responsibility for the partnership’s financial commitments. The formation process for such companies is straightforward, with no specific prerequisites, making setup and management quick and easy.

• While there are no stringent requirements, post-incorporation, certain mandatory compliances must be fulfilled. Tetra Consultants boasts an experienced team capable of assisting with these obligations and handling all necessary filings on behalf of clients within the designated timeframe once engagements commence.

Joint stock company (AS)

• One of the most favored company structures in the nation is the joint stock company (AS), commonly utilized by large corporations. This entity enables shareholders to raise capital and potentially list the company on the Prague Stock Exchange.

• Furthermore, shareholders of these business entities enjoy limited liability, meaning their personal finances are not at risk if the company encounters difficulties or obligations. In an AS, shareholders are only financially responsible for their investments’ value. Consequently, several statutory requirements apply to these companies, including:

• There must be CZK 2,000,000 as the required capital in order to be formed.

• At least one managing director without residency requirements.

• At least one member of the supervisory board without residency requirements.

• Minimum one director without residency requirements.

• Minimum one shareholder without residency requirements.

• A local registered agent is not mandatory.

• Joint Stock Company in the Czech Republic involve having a registered office address within the country.

• There is no requirement for a company secretary.

• While registering a joint stock company can be time-consuming and complex, Tetra Consultants alleviates concerns with a dedicated team of experts poised to assist with offshore company incorporation upon engagement.

• Cooperatives (Družstvo)

• A cooperative is a business entity managed and owned by its shareholders and board of directors. Its primary objective is to promote the social or economic welfare of its members, who are not personally liable for the company’s debts or obligations. There are various statutory requirements which are as follows:

• A cooperative must have a registered capital of at least CZK 1.

• Cooperatives are formed by at least 5 individual members or at least 2 legal entities to undertake business for the economic or social benefit of their members.

• A legal entity can become a member of the management board, but a specific (natural) person who is acting on behalf of this legal entity must be listed in the commercial register.

• Cooperatives are also subject to have Articles of incorporation and Memorandum of Association which can be drafted by Tetra Consultants for you.

• At Tetra Consultants, we offer our clients the comprehensive services they require. Upon engagement, you can focus on other essential tasks while we handle the company registration process on your behalf.

Sole proprietorship

• The simplest and swiftest company structure to establish is sole proprietorship, where one individual manages and owns the business on a self-employed basis. According to the Trade License Act, individuals can officially commence their sole proprietorship once they reach 18 years of age. In Czech companies, there is no distinction between the proprietor’s financial resources and those of the company. Tetra Consultants offers comprehensive compliance services, aiding clients with accounting and tax obligations crucial for their business.

What are the benefits of registering a company in Czech Republic?

Strategic gateway to EU markets:

• Establishing a company in the Czech Republic offers a gateway to accessing lucrative EU markets, leveraging the nation’s prime location in Central Europe. By registering your business here, you position yourself strategically to tap into the vast opportunities available within the European Union. This advantageous geographical positioning enhances your business’s reach and potential for growth in one of the world’s largest economic blocs.

Taxation safeguards:

• Registering a company in the Czech Republic affords protection against double taxation, safeguarding against the imposition of taxes on the same income source twice. This ensures that businesses can operate efficiently and effectively without the burden of redundant tax obligations. With this advantage, companies can optimize their financial strategies and investments, fostering a conducive environment for business growth and prosperity.

Streamlined tax compliance:

• Businesses in the Czech Republic enjoy the benefit of minimal tax audits, streamlining the process of tax compliance. This advantage reduces the administrative burden on companies, allowing them to focus more on core operations and strategic growth initiatives. With fewer tax audits, businesses can allocate resources more efficiently and effectively, enhancing overall productivity and profitability. This favorable environment promotes a conducive atmosphere for businesses to thrive and flourish in the Czech Republic.

Robust economic stability:

• Positioned at the heart of Europe, the Czech Republic offers a robust and enduring economic landscape, rendering it an appealing choice for establishing businesses. With its steadfast economic environment, the country provides a reliable platform for companies to flourish and expand. This stability fosters confidence among investors and entrepreneurs, encouraging investment and innovation. Businesses operating in the Czech Republic can leverage this stability to navigate challenges and capitalize on opportunities for sustained growth and success.

Step 1: Choose the business entity

• Selecting the ideal company structure for registration is an important part of registration in Czech Republic. There are various business entities’ options available which include Limited Liability Company (S.R.O), Joint-Stock Company (A.S), or sole trader company with tailored assistance from Tetra Consultants.

• Our expert guidance ensures optimal decision-making aligned with your business goals and regulatory requirements.

Step 2: Select and reserve the company name

• Select an appropriate company name that meets the criteria outlined by the Czech Business Register guidelines. Tetra Consultants offer name reservation services to ensure compliance and availability.

• Our expertise ensures that your chosen name aligns with legal requirements, enhancing the registration process and positioning your company for success in the Czech market.

Step 3: Comply with pre-requirements

• While registering the company in Czech Republic you will be required to comply with all the pre-requirements which may vary depending on the business entity chosen by you.

• The pre-requirements for joint stock company in Czech Republic includes:

• There must be CZK 2,000,000 as the required capital in order to be formed.

• At least one managing director without residency requirements.

• At least one member of the supervisory board without residency requirements.
• Minimum one director without residency requirements.

• Minimum one shareholder without residency requirements.

• A local registered agent is not mandatory.

• Joint Stock Company in the Czech Republic involve having a registered office address within the country.

• There is no requirement for a company secretary.

• For complying these requirements, you can turn up to Tetra Consultants for seamless support and guidance through experts.

Step 4: Prepare required documents

• Tetra Consultants facilitates the gathering of vital documentation, including Articles of Association and the application for company registration, streamlining the process for our clients.

• Moreover, we offer comprehensive legal drafting services for necessary documents, ensuring adherence to all rules and regulations. This service simplifies the complexities of company registration, allowing our clients to navigate the process seamlessly with confidence.

Step 5: Register your company

• Further, Tetra Consultants manages the submission of your application to the Czech Business Register.

• Our efficient handling of these processes ensures seamless compliance with registration procedures, saving you time and effort while establishing your company in the Czech Republic.

Step 6: Register for taxes

• Following company registration, Tetra Consultants facilitates the tax registration process with the Czech Tax Administration on behalf of our clients. Additionally, we provide comprehensive accounting and tax obligation services to ensure compliance with all tax regulations.

• Our expert team manages the entire tax registration procedure, alleviating the burden on our clients and ensuring smooth compliance with legal requirements.

Step 7: Obtain permits and licenses

• Tailored to your business activities, Tetra Consultants assists in obtaining essential permits or licenses from relevant authorities and industry regulators. Whether it is local permits or specialized licenses, our expert team navigates the regulatory landscape on your behalf, ensuring compliance with all requirements.

• Additionally, we provide assistance with obtaining offshore financial licenses for businesses requiring international financial operations, streamlining the licensing process and facilitating global expansion.

Step 8: Open a corporate bank account

• Establishing a bank account is indispensable for companies to operate seamlessly in the Czech Republic. Tetra Consultants simplifies this process by offering corporate bank account opening services. With our expertise, we ensure our clients obtain a corporate bank account within 4 weeks of incorporation.

Accounting and tax obligations

• In the Czech Republic, navigating accounting and tax obligations is critical for businesses. Outsourcing these activities can prove to be strategic and cost-effective, allowing companies to leverage specialized expertise while focusing on core operations. Tetra Consultants offers comprehensive accounting and tax obligation services tailored to Czech regulations. Our expert team ensures compliance with local laws, minimizes financial risks, and optimizes tax efficiency, enabling businesses to thrive in the Czech market.

Accounting obligations

Comprehensive accounting support:

• Czech businesses rely on comprehensive accounting services, encompassing vital tasks such as bookkeeping, payroll management, preparation of annual financial statements, tax return filing, and debt monitoring. These services extend further to encompass tax advisory, compliance assistance, financial planning, risk assessment, and performance evaluation.

Regulatory compliance framework:

• The Accounting Act of 1991, updated in 2021, lays down the regulatory foundation for financial reporting in the Czech Republic. This legislation delineates the requirements for preparing financial statements, including adherence to specified accounting standards and reporting thresholds. Oversight and enforcement of these standards fall under the purview of the Ministry of Finance.

Adoption of International Financial Reporting Standards (IFRS):

• Listed companies within the Czech Republic are mandated to apply EU-endorsed IFRS for both standalone and consolidated financial statements. While other entities have the flexibility to opt for IFRS adoption for their consolidated statements, adherence to these standards ensures consistency and comparability in financial reporting practices.

Auditing compliance:

• Recent legislative amendments to the Act on auditors align Czech auditing regulations with EU directives, ensuring statutory audits for public interest entities and entities meeting specified size criteria. These measures bolster transparency and accountability in financial reporting practices across the Czech Republic.

Disclosure of beneficial ownership:

• Czech companies are obligated to disclose details regarding their beneficial owners to regulatory authorities. Failure to comply with these disclosure requirements can lead to punitive measures, including the forfeiture of voting rights or profit shares, underscoring the importance of transparency and accountability in corporate governance.

Tax record maintenance:

• Czech businesses must maintain accurate accounting records in accordance with Czech GAAP, ensuring compliance with tax regulations. The Ministry of Finance issues comprehensive guidance on accounting practices through Decrees on Accounting and Czech Accounting Standards, facilitating accurate tax reporting and enhancing transparency in financial disclosures.

Tax obligations

Corporate Income Tax (CIT):

• Beginning January 1, 2024, the Czech Republic imposes a 21% Corporate Income Tax (CIT) rate for taxable periods. This tax applies to various entities, including joint-stock companies and limited liability companies. While entities with a registered office or place of management in the Czech Republic are subject to tax on their global income, non-residents are taxed solely on income sourced from the Czech Republic.

Tax period and filing deadline:

• The tax period for CIT typically aligns with the calendar or business year. Corporate income tax returns must be filed by the end of March, with a possible extension until June.

Windfall tax:

• Introduced as a subset of corporate income tax, the windfall tax targets exceptional profits resulting from factors like energy price hikes or interest rate increases. Applicable to specific sectors like energy, banking, and oil industries, this tax spans from 2023 to 2025. It calculates the tax base as the difference between the current year’s and preceding five years’ average tax bases, plus 20%, subjected to a 60% tax rate.

Documents required to register company in Czech Republic?

The documents required to register a company in the Czech Republic may vary depending on the chosen business entity. Tetra Consultants offers a comprehensive list of required documents tailored to your specific needs. However, a generalized list of documents are listed below. Our expert team ensures all necessary documentation is prepared accurately and in compliance with regulatory requirements, facilitating a smooth and efficient registration process for our clients.

• Company business name

• Address of registered office, along with its proof (lease agreement)

• Details of the activities to be carried out by the company

• Memorandum and Articles of Association (MAA)

• Trade authorization certificate

• Specimen signatures of shareholders and directors

• Proof of deposited bank capital

• Extract from the Criminal Registry for each member of the company

Directors, shareholders and members

• Criminal background extracts for non-Czech citizen directors

• Personal identification documents such as a notarized copy of passport, proof of address, proof of income, etc.

Corporate Shareholders:

• Corporate registration documents including Certificate of Incorporation,

• Memorandum and Articles of Association,

• Company extract

Ultimate Beneficial Owner (UBOs)

• Identification documents proving ownership exceeding 25%.

• Registration of UBO without undue delay, usually within 2 weeks after incorporation.

Supervisory board

• Documentation related to the establishment of the supervisory board, if applicable.

• Notarized documents by a Czech notary

Why to register company in Czech Republic?

Political

• Political factors play a crucial role in the decision to register a company in the Czech Republic. This includes trading policies and regulations that directly impact business operations, as well as administrative divisions that may affect the set-up and management of companies. Moreover, political stability, elections, and prevailing trends significantly influence the overall business environment. Inter-country relationships also have a bearing on trade and investment opportunities available within the Czech Republic.

Economical

• The Czech Republic presents an alluring prospect for business expansion, boasting a stable and thriving market in Central Europe. Renowned for its technologically advanced and flexible economy, it stands as one of the most productive emerging economies. With a GDP per capita of 27,500 in Purchase Power Standard (PPS), the Czech Republic provides an advantageous economic environment for prospective businesses. Furthermore, its membership in the EU facilitates seamless mobility of goods, services, and finance across member states, offering businesses access to a vast and dynamic market. Enhanced by robust trade agreements and economic ties with global markets, the Czech Republic emerges as an optimal location for companies seeking to engage in international trade.

Social

• Social factors play a pivotal role in the decision to register a company in the Czech Republic. This includes demographic trends that shape consumer behavior and market demand, providing valuable insights for businesses seeking to enter the local market. Additionally, cultural aspects influence product acceptance and marketing strategies, highlighting the importance of understanding and aligning with Czech cultural norms and preferences. By considering these social factors, companies can effectively position themselves to cater to the needs and preferences of the Czech population, thereby enhancing their chances of success in the market.

Technological

• Technological factors are crucial considerations for companies looking to register in the Czech Republic. These include the state of energy infrastructure and technological advancements, which significantly impact operational efficiency. Moreover, communication systems play a vital role in connectivity and business interactions, facilitating seamless communication within and outside the country. Additionally, transportation networks are essential, influencing logistics and distribution channels, thereby affecting the overall efficiency of supply chains. By assessing and leveraging these technological factors, companies can position themselves for success and competitiveness in the Czech market.

Environmental

• Environmental considerations are pivotal for companies seeking registration in the Czech Republic. This encompasses sustainability practices and adherence to environmental regulations, which directly impact business operations. By recognizing and addressing these environmental factors, companies can ensure compliance with local regulations and contribute to sustainable development initiatives. Additionally, embracing environmentally friendly practices can enhance brand reputation and appeal to environmentally conscious consumers, thus bolstering competitiveness in the Czech market.

Legal

• Legal factors are paramount for companies considering registration in the Czech Republic. These encompass taxation policies dictating corporate tax rates and financial responsibilities. Furthermore, money laundering regulations significantly influence financial transactions and impose stringent compliance requirements. By understanding and adhering to these legal factors, companies can ensure compliance with Czech laws and regulations, thereby mitigating risks and fostering a conducive environment for business operations.

Looking to register company in Czech Republic

• Contact us to know more on how to register company in Czech Republic and our team will revert within the next 24 hours.

FAQ

What are the key accounting obligations for businesses in the Czech Republic?

What are the requirements for adopting International Financial Reporting Standards (IFRS) in the Czech Republic?

What is the corporate income tax (CIT) obligations for businesses operating in the Czech Republic?

What is the income tax rate in The Bahamas?