When establishing a Czech legal entity, founders usually opt for a limited liability company.
The registration of limited liability company takes approximately 4-5 weeks. It is also possible to buy a ready-made company, in which case the document execution time would be around 10 days, provided the beneficial owner documentation is submitted promptly.
Limited liability company must have at least one director; the director can only be an individual. If the director is a Czech non-resident, he or she must provide a certificate of no criminal record issued by the country of residence and by the Czech Republic, even if the director has never lived there.
It is also necessary to comply with a number of visa formalities.
The details of directors of Czech companies are filed with the Commercial Register and are publicly available.
The shareholders (members) in Czech companies may be both individuals and legal entities wherever resident or domiciled/incorporated. The details of shareholders must also be filed with the Commercial Register.
The minimum share capital of a Czech limited liability company is CZK 1.
Companies may not issue bearer shares, fractional shares or no par value shares.
1. It is necessary to decide on:
2. Pay fees for services
3. Certify the company’s Articles of Association at the notary
The fee for notarial certification of the Articles depends on the company’s share capital and the number of copies of the notarial deed requested by the company’s founders.
For the articles of association of a simple limited liability company, the cost of notarization is CZK 2 000. In addition, if each founder wants their own original copy, then the cost is CZK 100 per page.
The notary is responsible for ensuring that the company’s Articles comply with Czech law. The notary drafts the Articles according to the wishes of the founders.
Some notaries require the following documents to prepare the Articles:
The founders must comply with the provisions of the Czech Commercial Code. They must confirm their compliance in an affidavit filed with the municipal court.
4. Obtain confirmation from the administrator of the capital contribution of the company and confirmation from the bank that the capital has been deposited into the company’s special bank account
Until the company is registered, the share capital is usually blocked in the special bank account. Opening a special bank account usually costs about CZK 5 000. However, some banks open special accounts free of charge on condition that the company will have a current account with them after the registration.
5. Register with the Trade Licensing Office
The company must register its business activities with the Trade License Office to obtain a trade license. The required documents are as follows:
The Trade License Office must complete the registration process within 5 days from the day when all required documents were submitted. After the completion of the registration process, the Trade License Office issues an extract from the trade license register.
6. Register in the Commercial Register of the Regional Commercial Court
To register a new company in the Commercial Register, an application must be submitted to the relevant court administering the register. This application must be completed on a standard form and signed by all the directors of the company (or their proxy, if applicable) before a notary.
The following documents must be attached to the application:
7. Register for taxes
The deadlines for registering with the Tax Office are:
Upon submitting the application for income tax registration, the company receives a tax identification number (same number for VAT and income tax).
8. Register beneficial owners with the local registry court
The application has to be filed with a specific form. It can either be submitted in electronic form, or it can be printed and sent to the Registry Court in paper form. The court has a time limit of 5 business days for the registration.
9. Register for social security
If a company hires employees, it also needs to register with the social security service.
10. Register for health insurance Agency
Health Insurance companies The company must register for the health insurance registration within 8 days of the date when the first employee starts work. It is possible to do so online.
Czech companies are required to keep accounting records and pay taxes.
Corporate income tax is payable by all resident companies on their worldwide income and capital gains and is assessed on the basis of the company’s annual net profit less deductible expenses. Non-resident companies pay taxes on income from Czech sources.
The standard corporate income tax rate is 21%.
The tax year for companies may coincide with the calendar year, the economic year, a period from the date of merger to the end of the calendar year, or a financial year of longer than 12 months. The tax return must be filed within three months of the tax period end-date. The tax must be paid by the tax return filing deadline. In addition, either 2 or 4 advance payments must be made depending on the tax liability in the previous year.
The following types of companies must submit audited financial statements:
Czech companies that are subject to audit must prepare and submit an financial statements and an annual report to the Commercial Register by 31 March.
Financial statements and an annual report are publicly available and contains the following information:
Account should be taken of VAT matters as well. Czech companies with a turnover of more than CZK 1 000 000 per year (just under EUR 40 000) must register for VAT. Registration is also mandatory if EU purchases in a calendar year exceed CZK 326 000.
Certain transactions, such as the purchase of certain services, also prompt an immediate VAT registration.
A company may register for VAT voluntarily even if its turnover is below the threshold.
VAT must be paid and VAT returns submitted within 25 days of the end of VAT period. The VAT period is either a calendar month or a calendar quarter depending on the taxpayer’s turnover.
VAT is levied on the supply of most goods and services at a standard rate of 21%.
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Services
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Fees (EUR)
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Total cost of registration (including provision of a Czech registered office, preparation of an apostilled set of constitutive documents, and opening a bank account for payment of the share capital).
The cost does NOT include payment of the share capital, preparation and apostille of passport copies of the director/beneficial owner or shareholder documents (if the shareholder is a legal entity), or of powers of attorney for executing constitutive documents before a Czech notary |
6 750
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Annual administration (starting from the second year), including provision of a registered office
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4 160
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Director
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1 930 + quarterly invoice for services charged on a time-spent basis
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Shareholder
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990
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Preparation and submission of the company’s financial statements (the final cost depends on the time spent)
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from 1 700 for holding companies
from 3 500 for trading companies from 4 500 for VAT registered companies |
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Compliance fee
Payable in the cases of: |
350 (standard rate, includes the check of 1 individual)
+ 150 for each additional individual (director, shareholder, or beneficial owner) or legal entity (director or shareholder) if such legal entity is administered by GSL + 200 for each additional legal entity (director or shareholder) if such legal entity is not administered by GSL 450 (rate for high-risk companies, includes the check of 1 individual) 100 (signing of documents) |
* The fees are valid as of February 2025.