Czech Republiс

Anyone in the Czech Republic can set up a company or business association, whether he/she is a member of the EU Member State or a private or legal person outside the EU. However it is important to know, that the allocation of the Community Tax Number is a complicated operation and in many cases it can take up to half a year which makes the life of entrepreneurs more difficult.

What are the advantages of establishing a Czech company?

  • The tax system in the Czech Republic is flat – 19%
  • VAT in the Czech Republic is 21%
  • The corporation tax is 19% and nothing else
  • 15% the dividend tax (in case the company pays the profit to the owner)
  • 0% is the expected tax
  • 0% separate tax
  • 0% local business tax
  • 0% healthcare contribution
  • 0% real estate-transfer and inheritance tax
  • 0% solidarity tax

As it was mentioned already the establishment of a Czech company is a rather cumbersome process the procedure of which is the following:

  1. One should pay 200.000 CZK to the selected bank
  2. Acquire the following documents: moral certificate, declaration, seat reception
  3. All these documents should be sent to the Court of Registration, and for the decision one should wait approximately 3 weeks
  4. In case of need one can appeal against the decision
  5. After all one should wait for another week during which the enterprise appears in the business register

Not only individuals but also legal entities can set up a company, open a branch or raise a tax number in the Czech Republic. If the owner of the company is a Czech company, then all the documents of the parent company and its certified translation will be necessary to establish or to purchase the company from that legal entity.

In most of the cases we do not recommend our clients to set up a new company as this process is extremely time-consuming and to get a tax number for the new business is very difficult. It is much more expedient and more time-consuming to purchase a VAT registered company with an EU Tax number. The conversion time is only 2 weeks and after the change is entered one can issue VAT-free invoices for companies that are in other EU Member states.