Business entities in Czech Republic in 2023

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There are several types of business entities available in Czech Republic, the most commonly used being the limited liability company. Our Firm will be pleased to advise our Clients to determine such entity type is optimal for their business goals, or if another one would be a better fit to the nature of their business. See the page below for further information the main types of business vehicles available for registration in Czech Republic and their business setup requirements.

  • Doing business in Czech Republic with a local entity

    The Czech Republic Limited Liability Company (společnost s ručením omezeným or SRO)

    • A limited liability company in the Czech Republic can be registered by a single owner with a minimum capital requirement set at €1 (CZK1). Only one director can be appointed, who can be both an individual or a corporate, with no residency requirement. The amount of capital set must be paid up within five years after company registration;
    • Limited liability companies in the Czech Republic are required to file financial statements with the tax authority every year, but an external audit is required only if the business meets at least two of the following three criteria: i) balance sheet amount above €1.5 million ii) annual turnover over €3 million and iii) over 50 employees;
    • Best uses for a limited liability company: the limited liability company is the most commonly legal vehicle used by foreigners in order to start a business in Czech Republic. It is an adequate vehicle for both trading and manufacturing activities.

    The Czech Republic Joint Stock Company (akciová společnost or AS)

    • Czech joint stock companies registration requirements are similar to those of the limited liability company, except that the entity requires i) an higher amount of issued capital of €75,000, payable within five years after company setup and ii) a supervisory board including at least three members, who cannot be also directors of the company;
    • JSCs are also subject to stricter audit requirements, as they are only exempt if they meet the three following criteria: i) balance sheet amount above €1.5 million ii) annual turnover over €3 million and iii) over 50 employees;
    • Best uses for a joint stock company: thanks to stricter regulations over management, the joint stock company is a good business vehicle for shareholders willing to register a new business but not be involved in its day to day management. It is also the right entity for those of our Clients who are looking to raise capital or list on the local stock exchange (PSE).

    The Czech Republic free zone company

    • Foreigners forming a company in Czech Republic can decide to register the entity in one of the country’s special industrial zones (click hyperlink for a map). Requirements for the same include: i) a minimum investment of €2 million (€4 million in some of the SIZs) and ii) at least 20 jobs creations. Under the “Technology Centres” Program, innovative businesses benefit from a lower minimum investment of €1 million;
    • Benefits include: i) up to ten years of corporate income tax exemption ii) a cash grant of up to 7,500 per job created and iii) property tax exemption during up to five years. See this page for further details on benefits available;
    • Best uses for a free zone company: registering a company in an industrial zone is the optimal way to start a manufacturing or R&D business. See also this page for alternative low cost manufacturing locations in Eastern Europe.
  • Doing business in Czech Republic with a foreign entity

    The Czech Republic branch office

    • In accordance with the local laws, foreign companies can open branch office entities in Czech to do business. Because branches are not considered as separate legal entities, their parent company will be subject to unlimited liability for losses incurred by the branch;
    • Best uses for a branch office: registering a branch instead of a separate subsidiary enables our Client to minimize accounting and bookkeeping obligations, as the accounts of the head office and the branch will be the same.

    The Czech representative office

    • Important note: Czech Republic does not differentiate representative offices from branch offices. Consequently, the former are subject to the same tax filing obligations, although they are not subject to taxation provided they can demonstrate no revenue generating activity is conducted;
    • Best uses for a representative office: A representative office can be used when our Client is seeking to venture in the Czech Republic markets.
  • Table of comparison between Czech Republic entities

    Operations and logisticsLLCJSCFree zone companyBranchRO
    Also known as?SROASSIZ companyBranchRO
    Doing business in Czech Republic permitted?YesYesYesYesNo
    Allowed to sign contracts with local Clients?YesYesYesYesNo
    Allowed to invoice local Clients?YesYesYesYesNo
    Can register the company with a virtual office solution?YesYesYesYesYes
    Allowed to import raw materials?YesYesYesYesNo
    Allowed to export goods?YesYesYesYesNo
    Accounting and tax
    Standard Czech corporate tax?19%19%0%19%Cannot trade
    Corporate bank account?CommerzbankCNBUnicreditCommerzbankCNB
    Statutory audit always required?NoNoNoNoNo
    Annual tax return to be submitted?YesYesYesYesYes
    Access to DTAAs?YesYesYesYesNo
    Company law
    Issued share capital required?€1€75,000€1 millionNoneNone
    Resident director/manager required?NoNoNoYesYes
    Czech Republic shareholder /partner required?NoNoNoNoNo
    Minimum number of directors/managers?11111
    Minimum number of shareholders/partners?111Parent entityParent entity
    Individual shareholders/partners allowed?YesYesYesNoNo
    Corporate shareholders/partners allowed?YesYesYesParent entityParent entity
    Public register of shareholders and directors?YesYesYesYesYes
    Can the entity hire expatriate staff in Bulgaria?YesYesYesYesYes
    How long to get work permit approved3 months3 months3 months3 months3 months
    Estimate of engagement costs€10,660€14,410€11,060€12,010€12,310
    Draft invoiceView invoice PDFView invoice PDFView invoice PDFView invoice PDFView invoice PDF

Contact us

For additional information on our company setup services in Czech Republic, please contact our in-house country expert, Mr. Petar Chakarov, directly:
client relationship officer - Petar
  • Mr. Petar Chakarov
  • Sales & Business Development Manager
  • Contact me!
czech Chamber of Commerce czech national bank CNB Government of the Czech Republic czech Ministry of Finance czech ministry of foreign affairs