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Czech Republic

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Guide to Company Incorporation in The Czech Republic

December 17, 2010, 4:48 pm
BridgeWest

 

1. What is the minimum share capital of a Czech s.r.o (Limited Liability Company)?

In order for a Czech Limited Liability Company to function legally it must provide at least 200000 CZK as minimum capital. Each member of the new company must make a monetary or non-monetary contribution. Non-monetary investments must be declared in a written statement.

2. What is the minimum share capital for a Czech AS (Joint Stock Company)?

To set up a Czech Joint Stock Company the founders must provide a minimum capital of at least 2 million CZK for a private joint stock company or 20 million CZK for a public joint stock company. There is no limit as to the maximum amount. The basic capital is divided into shares. The share capital must be fully subscribed prior to applying for registration with the Commercial Register. At least 30% of the minimum capital and 100% of the non-monetary contributions must be paid up before registration.

3. Are there any special requirements for establishing a S.R.O in the Czech Republic?

A Czech SRO is a regular Limited Liability Company set up by at least one founder and with maximum 50 members, who is not required to be resident of the Czech Republic, nor have Czech citizenship. As a rule, a Czech Limited Liability Company must have a registered office in the Czech Republic and in the course of the registration process it must prove its legal title to the office, for example rental agreement, or a consent of the owner. The registered office should not be a temporary address only for the purpose of company registration. The Czech Limited Liability Company may be established by the directors, or by a representative authorized through power of attorney, both of which are not obliged to reside in Belgium or have Belgian citizenship. There are even less restrictions in terms of director eligibility. No work permits or visas are required. Another important aspect consists of setting up the bank account. Even though the physical presence is not mandatory in the incorporation process of a company, some banks may require one visit of the bank account titular.

4. How can I register for VAT in the Czech Republic?

After 15 days from obtaining a registration certificate from the Commercial Register of the Czech Republic the newly incorporated company should apply for tax purposes including VAT. The tax offices are located throughout the country and the documents needed are: an application for VAT registration containing information on the directors, and representative, certified copies of the memorandum and articles of association of the company. Upon submission of the file, the company is issued a tax identification number. The companies for which the VAT registration is mandatory are those with taxable supplies above 1 million CZK for more than one year or for those which are purchasing supplies from EU countries with a total value above 326.000 CZK for more than a year. The standard VAT rate is 20%, which sometimes can be reduced to 14% for certain goods and services.

5. How can I open a bank account in The Czech Republic?

In order for the company to engage in commercial activities it needs to open a bank account in the Czech Republic. Although the procedure might seem complex, it varies from bank to bank, and it may be simplified with specialized help. The minimum required capital is deposited in a temporary account, which will be unblocked upon registration. The foundation deed of the company along with the articles of association and memorandum must be submitted in a file. Some banks may require the presence of a director, while others may be satisfied if the bank account is established by a representative authorized through power of attorney. In both cases the individual who carries out this procedure must provide an identification card, passport or other identification documents. Most of the banks ensure the management of the account through internet banking, a service that can be requested to simplify the whole process.

6. How can I recruit personnel in the Czech Republic?

When a company desires to hire employees there are a series of possibilities from which they can choose. The Czech Republic has a well-educated and highly-trained workforce. A company may search on internet websites specialized in job placement. Recruitment agencies are always at the disposal of enterprises searching for workers. If the newly established Czech company wishes to hire employees from non-EU countries, they must apply for visas.

7. What is the average salary in the Czech Republic?

Employees in the Czech Republic benefit from a well-structured system ensuring their welfare, including a convenient average salary of over 24126 CZK /month.

8. What is the overall economic situation in the Czech Republic?

The development of the Czech Republic's economy has been impressive especially in the last decade. The Czech Republic is a highly industrialized country, its strength relying mostly in the industry and services sectors. However many business sectors are in need of investment. This allows an influx of foreign investors, who are treated in the same way as Czech citizens. The country's trade connections also enable a rapid development of the Czech Republic's economy.

 

BridgeWest offers Company Formation in Czech Republic.




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Company Formation in Czech Republic

Prague

BridgeWest offers company incorporation services in the Czech Republic. Our services include:

- drawing up the articles of association that can be signed through power of attorney (Czech laws require powers of attorney for any public ... [More]

Lawyers in Czech Republic

Prague

BridgeWest provides a wide range of legal services in Czech through our affiliated Czech lawyers and Law Firms in Prague and other major cities in Czech. We are mainly specialized in the main aspects of Czech Commercial Law, including Company Form ... [More]