Czech Company Formation

Opening a company in the Czech Republic

Why open a company in the Czech Republic? What are the advantages in the Czech Republic?
The Czech Republic, a country that is part of the European Union, is a convenient solution for many entrepreneurs.

The local currency is the Czech koruna (CZK), and living is very cheap in the country.

The Czech Republic is a very attractive tourist and industrial base, with cheap maintenance costs and a local market that understands the English language properly.

The strong consumer market of the Czech Republic has a significant size compared to Europe. The country is in the center of Europe, on the borders of Germany and Austria, and this is a very important strategic location for European trade operations, including import/export. The favorable location of the country in Central-Western E

urope, where the main transportation routes intersect, allows goods to be exported to all European countries, thus reaching over 500 million consumers.

The Czech Republic is a perfect place for investment and business expansion. The Czech government is keen to boost the economy.

Investors see the Czech Republic as one of the attractive investment destinations in Europe. The tourists are fascinated by the Czech hospitality and friendliness, the cultural heritage of the Czech Republic and the natural wealth of the country.

The process of opening a company in the Czech Republic
Opening a company in the Czech Republic begins with the signing of a notarial power of attorney to open a company by a local agent. The document was then sent with a courier urgently to the Czech Republic to be processed by a local Czech notary public. After several processes in the Czech Republic, the customer is required to sign the application for registration in the commercial register, and again send the document to the Czech Republic. At this stage the company already exists legally and can start business activities.

In the Czech Republic there is no need for a local director or a local shareholder.

In the Czech Republic you also do not need any European citizenship to open a company. You can open a Czech company even if you are a foreign citizen.

This means that it is possible to open the company with 100% shareholding in the name of a foreign citizen - in your name, or even in the name of a foreign company. The director can be foreign and there is no need for a local director.

Opening a bank account in the Czech Republic - a current account for the company
In the Czech Republic it has always been easy to open bank accounts - both for individuals and companies. However, since it is a European country, more or less starting in 2018, those who want to open a bank account are required to come to the country.

There is an alternative to flying to the Czech Republic, and that is opening an internet bank account. Indeed, similar to our "Zero One" bank, there are Internet banks in Europe that would be happy to accept your company in the Czech Republic as a customer.

Equity Capital
In order to open the company, a minimum equity deposit of 1 Czech crown is required, which is only about 0.04 euros. However, in the Czech Republic it is required to make an actual deposit of the aforementioned amount of equity. Therefore, as part of the process, a bank account is opened for the purpose of depositing the equity.

After opening the bank account and depositing the equity capital, the company is opened and a company charter is issued from the commercial register (this is the Czech certificate of incorporation).

After opening the company, you can use the bank account that was opened for the purpose of depositing the equity capital. In other words, the equity account becomes an active current account for all intents and purposes.

VAT registration
After the opening of the company, at the same time as the opening of the current bank account for the company, the registration of the new company in VAT will also be carried out. The company will receive a VAT number and can start trading.

EORI number
If you need to, we can obtain an EORI number for you so that you can import or export with the company within Europe.
EORI is an abbreviation of Economic Operators Registration and Identification number.

Company maintenance
The company requires annual maintenance of payment of fees, annual submissions, local address (which we will provide for you), as well as submissions to the tax authority.
However, all costs in the Czech Republic are low due to the relatively cheap cost of living.

Tax in the Czech Republic
The corporate tax in the Czech Republic stands at a low rate of only 21%.
For sales to the local Czech market, the VAT is 21%.

The law in the Czech Republic and Slovakia states that residency for tax purposes is determined according to the management test, but in practice the Czech Republic and Slovakia always issue a Tax Residence Certificate upon request, regardless of the director's place of residence and the country from which the company is managed.

Questions and answers
Question: Is it necessary to physically fly to the Czech Republic to open a company in the Czech Republic?
Answer: The entire process is carried out remotely and at no stage is it necessary to physically come to the Czech Republic. There is no need to fly to the Czech Republic to open the company, nor the company's bank account. The entire process of opening the company and in most cases also the company's bank account, are carried out remotely without setting foot on Czech soil.
Question: Who provides the local address for the company in the new Czech Republic?
Answer: We will provide the local address.

Question: How can I find a good accountant who can take care of the company in our new Czech Republic?
Answer: We will connect you with a local accountant.

Question: If I want to come to the Czech Republic to open a bank account, what should I do?
Answer: We will try ahead of time to arrange a meeting for you at the branch in order to sign the account opening forms, so that everything will be in order before you arrive, so that you don't just walk around the city in order to find which branch will accept you and open a bank account for your new company in the Czech Republic.

Question: What type of company in the Czech Republic should I open?
Answer: In the Czech Republic there are two types of companies:
The first type is a limited liability company ("SRO"). This is the LLC.
LLCs are considered more flexible in terms of organizational structure and easier to operate on a daily basis. They are suitable for investments of different scopes.

The second type is "joint stock company", that's how I imagine it can be translated into Hebrew. In English this type is called Joint Stock Company (JSC) and in Czech AS
AS companies are generally designed for large-scale investments. As a result, they are less flexible from a legal point of view and much more formal in terms of organizational structure and day-to-day operations. On the other hand, they are great for raising capital, because their shares can be issued on the Czech Stock Exchange, and they can issue securities of various types.

Foreign investors often choose SRO companies, i.e. companies of the first type, unless their business requires the company to be of the AS type.

Question: Do you need a European passport to open a company in the Czech Republic?
Answer: There is no need for a European passport. We can open a company in the Czech Republic for any foreign citizen as long as he has a valid passport.

Question: How long does it take to open a company in the Czech Republic?
Answer: The process of opening the company, including signing the power of attorney and sending it, should take about 4 weeks. After that, the process of opening a bank account takes between 3-4 weeks, depending on the readiness of the banks to accept the new company as a customer. Of course, these are times that depend on third parties, so this is only an estimate.

Question: Is it possible to open a company in the Czech Republic for a person with American citizenship or a person living in the USA?
Answer: Yes. We know how to open a company in the Czech Republic for a person with American citizenship or a person living in the USA.

On the face of it, it seems trivial that a person with ties to the USA could open a company in the Czech Republic, but we assure you that this is not the case. Today, all banks in the Czech Republic, without exception, refuse to open an account for a new Czech company if its owner has any ties to the USA "on. Therefore, we are probably the only ones, and certainly one of the few in the Czech Republic, who know how to open a company in the Czech Republic for a person with American citizenship or who lives in the USA.

Question: How much does it cost to open a company in the Czech Republic?
Answer: Click here and get in touch and get a current quote without obligation!