Company Formation in the Czech Republic
Foreign entities are permitted to set up companies in the Czech Republic and the country offers several types of registration options each with its own requirements and regulations. Company registration in the Czech Republic is a popular option and attracts many international businesses. The Czech Republic offers foreign companies a highly educated and professional work force; a solid infrastructure; low maintenance costs and many more advantages. The Czech Republic joined the EU in 2004 and since then has developed a solid business community and infrastructure that welcomes foreign companies and investors by making company registration in the Czech Republic a smooth, low-cost process with minimum requirements.
The Czech Republic Company Register authorizes the registration of four different types of company:
- (SRO) Limited Liability Co.
- (AS) Joint Stock Co.
- Branch Office
Czech Limited Liability Company (SRO)
SRO (Czech limited liability Company) is one of the most attractive forms of Czech company available partly because the formation and operation of a limited liability company in Czech is not expensive. It requires only CZK1 (about 5 euro cents) as the registered company’s minimum capital. This kind of company is favored by small to medium companies because the company can be registered by one person or unlimited number of people. However an existing SRO with a sole shareholder cannot set up another SRO or become the only shareholder of another SRO company.
To register a new SRO company in the Czech Republic you must be registered with the Trade License Office. To register with the Czech TLO you will need to provide the statutory document for companies not yet registered with the Commercial Register or the excerpt from the Register showing that your company is an already established business (for example your lease and proof of payment for the administrative fee.)
Features of a Czech-registered Limited Liability Company (SRO)
- The company must hav at least CZK 200,000 (about €6,500) in share capital with a minimum of 50% paid up.
- Each company shareholder must contribute a minimum of at least CZK 20,000 (about €650).
- A person may not be the sole shareholder in more than three SRO companies.
- There must be a reserve fund created from the profits of the SRO and built up to 10% of the SRO’s registered capital.
Advantages of registering a Limited Liability Company (SRO) in the Czech Republic
- A SRO is the easiest Czech company to establish with minimum requirements.
- A SRO company is the most cost-efficient Czech company to establish.
- SRO companies have a transparent ownership structure.
- A Czech SRO company requires only one executive.
Czech Republic Joint Stock Company (AS)
A Czech Republic Joint Stock Company requires a minimum share capital of CZK 2 million (about €65,000) or if the share capital is achieved via a public offering then the minimum share capital is CZK 20 million (about €700,000). With a Czech registered Joint Stock Company 30% of the share capital must be paid up. There is a two-tier system with supervisory and management boards. The company must create a reserve fund from the profits to be built up to 20% of the registered capital.
Czech Registered Branch Office
A Czech registered Branch Office is considered part of a foreign parent company and not as a separate legal entity. The Czech branch must be registered with the Trade License Office prior to its registration with the Czech company register. The branch manager can be of any nationality – Czech, EU or foreign national. However no matter the nationality of the branch management the company’s accounting records must be presented in the Czech language and in accordance with Czech law.
The Czech Public Register
The Czech Public Register holds records of statutory information relating to legal entities governed by private law. The regulations covering the Czech Public Register are set out in Act # 89/2012, Section 120 of the Civil Code.
Take Advantage of all the Opportunities the Czech Republic Offers New Businesses
If you want to take advantage of the amazing business opportunities available in the Czech Republic we can help you with company registration in Czech Republic. We can assist you in finding Czech Republic Shelf Companies and even ready-made Czech companies that are for sale. Alternatively we can also guide you through the entire process of company formation in Czech Republic and establishing a new Czech company.