The Czech Republic
The Czech Republic is located in Eastern Europe and is bordered by Poland, Germany, Austria and Slovakia. Until 1993 the Czech Republic was unified with Slovakia however since separation the country has undergone major political, social and financial reforms. The Czech Republic is a democracy and a member of the EU, NATO, the OECD and the Council of Europe. The capital city is Prague.
The Czech Republic has made significant progress with regards to liberalization of the business environment; 85% of the country’s GDP is derived from private businesses and corporate taxation has been cut from 26% to the current rate of 20% resulting in a significant increase in foreign investment. The Czech Republic has also introduced a range of financial incentives to stimulate foreign investment including ten years corporate tax relief for new manufacturing investment, payment of 50% of costs for new technology and business investment and numerous substantial job creation and training grants.
In 2009 this period of stable and robust economic expansion halted as a result of the global downturn however the Czech Republic has weathered the turmoil relatively well with a GDP Growth of 1.7% in 2011.
Key benefits of the Czech Republic:
- Stable political environment with EU and NATO membership
- The Heritage Foundation ranked the Czech Republic 15th out of 43 countries in the region of Europe with regards to economic freedom. The Czech Republic ranks higher than the regional and global average.
- The Czech Republic is one of Europe’s most industrialized nations with a highly skilled workforce.
- Liberal, western business culture with English widely spoken
- Developed and stable banking system with most a number of international banks located in the Czech Republic
- Low corporate tax rate of 20%
There are numerous international banks operating in the Czech Republic however setting up a corporate bank account can be challenging. Eltoma can assist you in bank account opening using our local contacts and knowledge.
For additional information on company incorporation and bank account opening in the Czech Republic please contact us.
Tax and accounting regulations
Summary of Requirements for an S.r.o Limited Liability Company:
|Type of Company||S.r.o – Limited Liability Company|
|Timescale to incorporate||2 weeks|
|Double Tax Treaty Access:||Yes|
|Minimum No. Required||1|
|Local Director Required||No|
|Publicly accessible information||Yes, the names of the directors do appear on public record|
|Location of Meetings||Anywhere|
|Minimum No. Required||1, can be a corporate shareholder|
|Publicly accessible information||No, the names of shareholders do not appear on public record|
|Location of Meetings||Anywhere|
|Local Secretary Required||N/A|
|Registered Office Required||Yes|
|Additional Information||A Statutory Representative is required to represent the company. This must be a natural person. Must be appointed in a General Meeting of the company|
|Standard Currency||Czech Crown (CZK)|
|Standard Authorised||CZK 200,000 / €7,500.00|
|Minimum Paid Up Capital||CZK 100,000 / Approx. €3,500.00.|
|Additional Information||The company is required to have a reserve fund (this is principally a bookkeeping entry):|
|Accounting & Compliance|
|Requirements to prepare Accounts||Yes|
|Requirement for Audit||Audit is required if at least two of the following criteria are met:|
|Local Auditor Required||Yes, if Audit is required|
|Requirement to File Accounts||Yes|
|Requirement to file Annual Return||Yes|
|Bank Account Opening||A bank account can be opened without the need for presence|
Procedure of company registration
The procedure of company formation in the Czech Republic is as follows.
We require the following to proceed:
- Completed application form
- A certified copy of each director and shareholder passport
- Certificates of clear criminal record for non-Czech nationals for each director
- Two utility bills that are under 3 months old
Once the above has been received the company name will be checked and the following documents sent for signing. These must be notarized.
- Articles of Association
- Registration of company to the Commercial Register
In addition to the above the following documents are obtained:
- Clearance that share capital is held in a bank account
- Trade License (for general commercial activity only a notification is required)
Once all original documents are received they are submitted to the Companies Registry and in approximately 1 week the company will be registered.