In recent years Czech Republic simplified the process of company formation. Now the whole process is shorter (it takes about 14-18 working days to form company) and accessible even for non-residents. The costs of assisted company formation are 990 eur.
When talking about company, we mean Limited liability company (in Czech “s.ro.” or “spol. s r.o.). This type of company is very popular, because company´s partners are not responsible for its debts. Formation of other types of companies (Partnerships, Limited Partnerships) is very similar.
All the partners of the company must sign Memorandum of association. If there is only one partner, he/she must sign Deed of establishment. This is company´s main document and it must contain these basic information about company: business name, address of registered seat, identification of partners and executive directors, scope of business and the value of the stock capital. Document must be signed by all partners and their signatures must be officially authenticated.
Partners are legal or natural persons who own a share in a company. The profit of the company is divided between them.
Executive directors are statutory body of the company, which means they act in the name of the company. Normally they are natural persons, but it is allowed for legal person (for example another company) to become an executive director.
EXAMPLE: Company A is an executive director of company B. Company A must designate person to act in the name of the company B. If company A decides to replace the person acting in the name of company B it is sufficient to designate another person to the position of executive director. It is not required to change the Memorandum of association.
It is allowed for one person to be both: an executive director and a partner.
Executive directors must obtain their criminal records extract not older than 3 months.
Executive director – EU citizen must obtain criminal records from his country.
Executive director – citizen of non EU-country must obtain criminal records from his country and from Czech Republic.
Except this, all executive directors must give declaration on oath, that they fulfill all conditions laid down by the law. Declaration must be officially authenticated.
The right of the company to use the property as its registered seat must be proved. The company needs to acquire property ownership title or consent of the owner. Signature of the owner must be officially authenticated and can not be older than three months.
In the Memorandum of association, it is not needed to include the exact address of the property; it is sufficient to include the city. This way company can change its seat within the city without changing the Memorandum of association. In the business register, the exact address must be included.
Company needs to obtain a Trade license (a license to carry out business). There are two kinds of licenses:
The costs of the license registration are 1 000 CZK (about 38 eur) per one registration (irrespective of the number of licenses). Later the costs of the registration are only 500 CZK (19 eur) per registration (irrespective of the number of the new licenses)
Stock capital must be paid. The minimum value of stock capital is only 1 CZK (40 eurocents)
Stock capital must be paid to custodian of contributions (it is allowed for one of the partners to be custodian of contributions). Custodian of contributions opens a separate bank account and partners are obliged to pay their contributions to this account. Custodian of contributions issues a Declaration of paid contribution for each partner.
On the basis of the application signed by all of the executive directors (not partners), competent court shall incorporate the company into business register and issues Declaration of incorporation. After this declaration is submitted to bank, it releases financial resources located on a separate bank account (see previous paragraph).
The application must be submitted on a standard form available at Ministry of Justice´s website (www.justice.cz). It can be submitted online (advanced electronic signature is needed) or by postal service (authentification of signatures is needed).
Finally, all that is left is registration for corporate income tax. The company must apply for such registration at a financial office. After such application is submitted, the financial office will issue Declaration of registration. To simplify the process, this registration can be done together with registration for trade license. At this point, company formation process is over and the company is ready to run.
Registration for value added tax is voluntary in Czech Republic. Registration is obligatory if the turn-over of the company crosses 1 000 000 CZK (about 37 000 eur).
14 - 18 business days.
Optional company formation services in Czech Republic:
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