Company Formation in Czech Republic

The Czech Republic, also known as Czechia, is a highly developed country in Central Europe with a social market economy. It benefits from a well-educated labour force and its proximity to western Europe. In addition to its economy, the country is known for its consistently high Human Development Index and generous standard of living, with its fairly decent per capita income and universal healthcare system. The economy of Czech Republic is fairly diverse, with its GDP deriving primarily from the industry (notably, automobiles and energy), services and agricultural sector. It is also active in trade & commerce, mostly with the European Union.

The Czech Republic is a Schengen country, and member of key international organizations like the European Union, the United Nations, the North Atlantic Treaty Organization (NATO) and the Organization for Economic Co-operation and Development (OECD). The country has a long-standing scientific and innovative tradition, with institutes like the Czech Academy of Sciences serving as trailblazers in humanities and applied research.

Company Incorporation in Czech Republic

A company formation in Czech Republic can take one of the following legal forms.

1. General Partnership [Veřejná obchodní společnost (VOS)]

A General Partnership in Czech Republic is a company owned by at least 2 persons, conducting business activities under a common business name. They are jointly and severally responsible for the debts or obligations of the company, in personal capacity. For setting up a General Partnership in Czech Republic, there is no requirement of a minimum paid-up capital.

2. Limited Partnership [Komanditní společnost (KS)]

A Limited Partnership in Czech Republic is similar to a general partnership, except that it has two types of partners: general members – who bear unlimited liability for the debts and obligations of the company, and limited members – who are liable only for their capital investment in the company, as specified in the Articles of Association of the partnership.

3. Limited Liability Company [Společnost s ručením omezeným (SRO)]

A Limited Liability Company (LLC) in Czech Republic is a legal entity in which the shareholders bear limited liability for the business, i.e., they are not responsible for the debts or obligations of the company in personal capacity. A single owner can form an LLC; the minimum capital requirement to set it up is just CZK 1. This company type is the most common legal vehicle utilized by foreigners to set up a business in Czech Republic. It is favorable for manufacturing as well as trading activities.

4. Joint Stock Company [Akciová společnost (AS)]

A Joint Stock Company is one the shares of which are owned by the shareholders. Any number of founders can set it up, but the minimum registered capital required for its formation is CZK 2 million (about €77,000). A Joint Stock Company in Czech Republic is suitable for shareholders looking to raise capital or list their company on the Prague Stock Exchange (PSE).

5. Cooperative [Družstvo]

The business purpose behind a Cooperative is the social or economic well-being of its members, who are not personally liable for the company’s debts or obligations. The minimum number of members required to found a Cooperative is 3, with no prerequisite for minimum start-up capital.

6. Branch Office

A branch in the Czech Republic can be set up by a foreign company looking to open a permanent establishment in the country. Since a branch office is not considered a legal entity separate from its parent company, the latter is liable for its activities and obligations.

7. Representative Office

A Representative Office is allowed only to conduct market research or promote the business of its parent company. It is not authorized to conduct business or sign contracts. In Czech Republic, a representative is treated the same as a branch office; so the tax filing norms for the former are the same.

Benefits of Setting Up a Business in Czech Republic

Doing business in Czech Republic has the following advantages:

  • Located close to the industrial lifeline of Europe, the central location of Czech Republic is especially suited to investments in transport and logistics because of its proximity to consumption and production zones.
  • Czech Republic comprises an educated workforce and state-of-the-art infrastructure, hence is appealing destination for overseas firms looking to grow their business in Central and Eastern Europe (CEE).
  • As a member of the EU, any company in Czech Republic benefits from the country’s trade relationships and commercial ties with most business centres in the world. In addition, the country is bereft of a majority of trade burdens.
  • The country features high standards of living, a vibrant economy and a visually appealing landscape overall.

Who We Are

Business Setup Worldwide is a platform to help you set up your business in the Czech Republic. From incorporation, registration, and licensing to establishing your office space, we facilitate the formation of your company through counseling and incubation.

Why Us?

Business Setup Worldwide is a one-stop solution provider that helps businesses in not only setting up their operations in the Czech Republic, but also supports in necessary documentation, legal formalities, intellectual property protection and registered trademark filing. We provide end-to-end solutions from company name registration to accounting and filing tax return in Czech Republic. Wide domain experience and familiarity with regional laws help us to take care of your passport, visa and licensing requirements and ensure that your company gets started without any unnecessary bureaucratic hassle.

Goal-oriented service, wide reach in terms of company setup experience & industry domain, adaptability to the changing global market trends, and the ability to come up with innovative business strategies and provide requisite support in implementing such strategies distinguish Business Setup Worldwide, providing your business the edge it requires for consistent growth.


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