Today the Czech government encourages foreign investment in industry and services. It is this factor, as well as the excellent reputation of the country - a member of the EU, contribute to the fact that many Ukrainian entrepreneurs consider setting up a company in the Czech Republic as a legal way of doing business at the European level. The interest of Ukrainian investors in the Czech Republic as a country for business development is conditioned not only by the stability of the country, but also by the annual reduction of income tax for companies. For example, the tax rate since 2004 has decreased from 28% to 19% (2013).
Corporate relations in the Czech Republic are regulated by two main laws: the Commercial Code and the Entrepreneurship Act. According to these regulations, the most common organizational and legal form of companies in the Czech Republic is Společnost s ručením omezeným (s.r.o.), which is analogous to a limited liability company (LLC) in Ukraine. The peculiarity of Czech companies is that all types of business activities require state licensing.
In contrast to previous years, at the moment in the Czech Republic there are no legal requirements for the residency of the director of the Czech company, that is, the director, as well as the founder, can be a citizen of any country. However, a non-EU resident must provide additional documents (for example, the original certificate of criminal record). The founder of the company can be a legal entity, preferably registered in one of the European countries.
How to open a business in the Czech Republic?
Step 1: Preparing for company registration.
It is possible to open a company in the Czech Republic without the personal presence of the owner of the company in the Czech Republic. In this case, the future owner must sign a power of attorney for the registration of the company, notarize the power of attorney and together with other documents (copy of passport, copy of birth certificate, original certificate of criminal record) to send to the Czech Republic.
Step 2: Opening a corporate account for the company in a Czech bank and payment of the authorised capital.
According to Czech law, there is a requirement to pay the authorised capital of a Czech company. The minimum authorised capital is 200,000 CZK (approximately €8,000). After opening an account in a Czech bank, the amount of the minimum authorised capital must be deposited in the company's account, which is frozen until the company registration process is completed. Thereafter, this amount can be used at the discretion of the company owner. A bank statement confirming the payment of the authorised capital of the company is a mandatory document for the start of company registration.
Step 3: Registration of the company.
The final stage of registration is the direct registration of the company in the Commercial Court (registry) and receipt of the court decision on the registration of the company. After that the company's data becomes available on the website of the Czech Ministry of Justice. The company is further registered with the tax office and the statistical office in the Czech Republic.
Step 4: Obtaining licences for the company.
As mentioned above, a nuance of Czech law is that all company activities require state licensing. State licences are issued for an indefinite period of time and are divided into several main types:
1. Registration licences - they contain activities that can be performed if certain conditions are met and an administrative fee is paid. The date of registration is considered to be the date of commencement of entrepreneurial activity. In turn, registration licences are divided into:
- free (or simple) - compliance with general conditions is sufficient, no special qualifications are required.
- bound and craft licences - it is necessary to fulfil both general conditions and special conditions, the level of necessary qualification for each subject of entrepreneurship is different and is described in a separate document.
2. Concessionary - in order to engage in these types of activities it is necessary to obtain a concession from a superior organisation (e.g. one of the Ministries).
Simple licences are obtained almost simultaneously with the registration of the company. The total time for registering a company and obtaining a simple licence is 4 - 6 weeks. As a rule, the cost of obtaining a simple licence is included in the cost of company registration. Obtaining a complex licence is a more time-consuming process. The period of obtaining a complex licence depends largely on the specifics of the company's activities and on average is 2 - 3 months.
After obtaining a licence and starting business activities, the owner of a Czech company can independently monitor the status of his licence with the help of the State Entrepreneurial Register of the Czech Republic.
So, taking into account the above described advantages of opening a business in the Czech Republic, we can only add that the registration of a company in the Czech Republic is not only an opportunity to conduct legal and profitable business in Europe, but also a way of profitable acquisition of real estate. And taking into account the comprehensive support of the state and the low cost of setting up a company, a Czech company and its opportunities will be a real Carte blanche for you.
