Czech

Czech

The Czech Republic: Investment Opportunities

The main sectors of the Czech economy are automotive, mechanical engineering, electronics, and aviation. Those planning to register a company in the Czech Republic should also keep in mind that they can invest in other profitable sectors, such as software development and IT.

Investment Market in the Czech Republic

Investment in the Czech Republic has grown significantly over the past several years. For example, the amount of green investments over the past two years has increased from 97% to 110%. Foreign businessmen considering opening a commercial company in the Czech Republic should keep in mind that investments in the country’s economy mainly come from the Netherlands, Austria, Germany and France. Some of the sectors that are highly popular with foreifn investors include manufacturing (about 33% of the total investment), financial and insurance (27%), wholesale and retail trade, real estate, mass media and IT.

Advantages of Registering Companies in the Czech Republic

The Czech Republic has a highly developed economy which has been growing steadily over the past several years. The country’s credit rating has recently been increased by 2 grades to AA. If you intend to set up a company in the Czech Republic, you should keep in mind that investing in this country requires getting approval of the relevant regulators; it is not until approval is granted that you will be able to invest in a particular sector of the Czech economy.

Please keep in mind that foreign entrepreneurs looking to register a Czech enterprise do not need to obtain any special permits to open a business in the Czech Republic. The only exceptions to this rule are the defence and nuclear energy sectors.

Requirements for the Establishment of a Commercial Firm in the Czech Republic

The main requirement is that a company be registered with the Trade License Office. Obtaining a trade license in the Czech Republic requires:

  • submitting a copy of a statutory document confirming that a company is not yet registered in the Commercial Register;
  • submitting a copy of an extract from the registry (applicable to companies that have already been registered);
  • submitting a copy of a an office lease agreement stating that a company has an official business address;
  • submitting a copy of a document confirming payment of an administrative fee.

Not later than 90 days after the formation of a company or issuance of a trade license, entrepreneurs must register in the Regional Arbitration Court’s Commercial Register. In addition to the standard application for registration of a company in the Czech Republic, its founders must submit:

  • a charter;
  • documents confirming a right to conduct business in the Czech Republic;
  • confirmation from a manager of a company’s authorized capital and an extract from the register of trade licenses;
  • a bank statement indicating the amount of a company’s deposit capital (may vary depending on the form of a company’s business);
  • a list of a company’s owners, including their signatures, and a written copy of their consent to register in the Czech Commercial Register.
  • a company’s owners must also apply to the tax office for a tax number no later than 15 days from the date of registering a Czech company.

Taxation

The corporate income tax rate is 19% (this does not include pension and investment funds, which are subject to a special income tax of 5%). VAT is taxed at a standard rate of 21%. Please keep in mind that lower VAT rates of 10%, 5% and 0% are applied to certain categories of goods and services.

Considering starting a business in the Czech Republic? Need assistance in registering a company in the Czech Republic? Require advice on opening a corporate account with a European bank? Why not contact YB Case?

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