Czech Company Incorporation

Czech Company Incorporation

Opening a Business in the Czech Republic

Czech Republic is a member country of European Union located in its center with developed infrastructure and services. Czech Republic has stable political system supporting business activities and potentially low employees’ salary.

Czech Republic attracts foreign investors worldwide due to its great location. Prague which is the capital is fast developed city with historical and cultural name which could be good sound for your company.

We are ready to walk you through the process for opening a business in this country of European Union as well as provide you with legal advice regarding running business in this country. Czech Republic encourages foreign direct investments and the procedure of opening a company in Czech Republic is straightforward and very accessible.

Limited Liability Company (s.r.o.)

(hereinafter referred to as “Czech s.r.o.”)

A limited liability company is the most common type of business entity. The Czech s.r.o. is a very popular legal form for small and medium sized business activities.

Shareholders are not liable for the company’s obligations if their contributions are fully paid up and registered in the Commercial Register. The Czech s.r.o. is liable for breaching its obligations with its entire property.

It is one of the top locations in Europe to open a business by incorporation of Czech s.r.o. company.

Czech s.r.o. has its registered capital usually from CZK 200,000,- but it is possible to form a company with sole member and his contribution of CZK 1,- therefore the registered capital amounts to CZK 1,-. The registered capital is fully usable.

It is managed by one or more managing directors. It is not necessary to have the supervisory board or auditor. Right on share can be represented by deed. Czech s.r.o. can be formed by one or more partners, no matter if legal entities or persons. One individual may be a sole member of other companies. The maximum amount of members is not limited.

Main Advantages of Czech s.r.o.

  • low registered capital;
  • low administrative requirements;
  • sole membership available;
  • no liability of members;
  • easy transfer of share;
  • simplified rules for general meeting contrary to joint stock companies (a.s.);
  • supervisory board is only mandatory, not obligatory.

Czech s.r.o. incorporation process

Founders have to agree on Deed of Association in a form of a Notarial Deed. It is necessary to visit a notary public registered in Czech Republic. Above all they have to agree the

  • distinguishable name of the company;
  • seat of the company;
  • scope of business activities;
  • the amount of the registered capital and method of its payment by contribution;
  • determination who shall be the administrator of contributions before registering the company into commercial register Czech Republic;
  • identification of first members of statutory body.

Contribution can be monetary or non-monetary determined in Czech currency. For the purpose of paying up the registered capital of a company, a specific bank account has to be established.

Registration with Commercial Register

Acquisition of trade license precedes the registration of the Czech s.r.o. to the Commercial Register.  Some specialized business activities require proof of professional qualification or university degree. After obtaining the trade license the motion on registration of Czech s.r.o. to the Commercial Register may be filed. This motion shall be filed within 6 months after executing of Deed of Association.

  • Deed of Association;
  • Trade License Certificate;
  • Affidavit of managing director with verified signature that he has not committed any crime regarding  in respect to the business activity and excerpt from the criminal register and consent of managing director with his registration to the function;
  • Bank statement confirming the payment of required capital;
  • Consent of the owner of the premises with his verified signature or excerpt from the Real Estate Cadaster declaring the ownership;

After Incorporation of the Company

A Czech s.r.o. will be then officially incorporated and receive the databox, which is its virtual address. Through the databox the company may communicate with local authorities and it is accessible from everywhere. AK Pavelec law firm may provide you with services regarding the control of the databox. After the incorporation the registration with local Tax Authority is required.

If you do not want to go through all of above mentioned formal procedure we can prepare you a ready-made company on your request.

For more information about formation of s.r.o. company in the Czech Republic, do not hesitate to contact our law firm. We can provide you with all necessary legal services pursuant to your business needs.