Czech Republic

General Information

Area – 78,866 sq. km

Population – 10.52 million people

Capital – Prague

Official language – Czech

Official currency – Koruna (Czech Crown, CZK)

Key Aspects

A special permission is required to perform banking and insurance activity. The Czech Republic signed the treaty for the avoidance of double taxation with the countries as follows: Austria, Albania, Egypt, Estonia, Finland, Hungary, Indonesia, Ireland, Korea, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Russia, Slovakia, Switzerland, Thailand, United Arab Emirates, and USA. Information about the beneficiaries is disclosed only in case of inspection by tax authorities or based on a court decision.

Company Type

In terms of incorporation, a Limited Liability Company (LLC) is the most popular legal structure.

Corporate Legislation

The legal system of the Czech Republic relates to the continental law combined with the contemporary legislation of the EU.

Main Requirements for Company Directors and Shareholders

In Czech LLCs there is no board of directors; instead of them, managers are appointed by the shareholders’ decision. There are no special requirements for the directors with the exception of visa requirements for non-residents of the EU. In each company there must be at least one director and one shareholder. Information about them is kept in public registers.

Authorised Capital

The minimum amount of the authorised capital is stipulated at the level of CZK 25,000 (approx. EUR 1,000).

Accounting

All legal entities working in the Czech Republic and registered in the register, or with the income exceeding CZK 25,000 must maintain and store accounting records. Companies issuing securities in the securities markets of the EU must file financial accounts, and a number of them – to be under audit.

Taxation

All companies must file tax declarations at the end of a tax year; in a number of cases said period may be extended for three or six months.

Value added tax – 21%

Corporate tax – 19%

Questions that need to be answered to prepare incorporation documents

∙ Passport details of the founders

∙ Passport details of the directors

∙ Photocopy of the ID pages of the founders’ and director’s international passports

∙ Utility Bill of the directors and founders, current email addresses and phone numbers

∙ Several proposed firm names