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Mobil: 604 568 553 | e-mail: vitklima@seznam.cz |
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The Czech Republic |
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Company set up |
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Any business activity in the Czech Republic is generally subject to the issuance of a trade license (regulated by the Trade Licensing Act) or another specific permits (regulated by a number of specific acts), depending on the type of business activity. Czech law generally provides that a foreign person may undertake business activities in the Czech Republic under the same conditions and to the same extent as Czech persons. Under the Czech Trade Licensing Act, a legal entity with its seat in another EU member state can temporarily provide its services within the territory of the Czech Republic based on the trade licenses issued in such member state. If this legal entity’s activities become more regular and meet the legal definition of a business activity (i.e. continuous business activity carried out independently, at its own responsibility and aimed at generating a profit), it should either apply for the respective trade licenses or other permits in the Czech Republic and subsequently register its branch in the Czech Commercial Register or set up a subsidiary company in the Czech Republic.
Branch Office Under the Czech Commercial Code, a branch office is a registered organizational unit of a foreign or domestic legal entity and, as such, may engage in business activities only within the limits set by the founding company. Since a branch office is merely an organisational unit of the founding company, it is not regarded as a separate legal entity and does not have its own legal capacity. The branch office must be registered in the Commercial Register and the founder must appoint a director of the branch office who acts on behalf of the founding company, but this is only in relation to matters concerning the branch office.
Legal Forms of Companies Including European CompaniesLegal forms of companies are regulated in particular by the Czech Commercial Code. Under Czech law it is possible to set up six different forms of business companies, i.e. a general partnership, limited partnership, limited liability company, joint-stock company, European Company, and European Economic Interest Grouping. A general partnership is a separate legal entity in which at least two natural persons undertake business activity under a common business name and bear a joint and several liability for the obligations of the company with all their property. A limited partnership is an entity where one or more partners are liable for the obligations of the company up to the amount of the unpaid parts of their contributions as registered in the Commercial Register (limited partners), and one or more partners are liable for the obligations of the company with all their property (general partners). The limited liability company is the most common legal form for a business entity in the Czech Republic. This company is a separate legal entity whose registered capital is made up of contributions paid by its shareholders. These shareholders are liable for the obligations of the company up to the amount of their unpaid contribution to the company capital as registered in the Commercial Register. A limited liability company must have at least CZK 200 000/approx. EUR 7 560 in registered capital, whereas the minimum contribution of each shareholder is CZK 20 000/approx. EUR 756. The statutory body of the company is made up of one or more managing directors. In a joint-stock company, the registered capital is divided into a certain number of shares with a specific nominal value. Shareholders of the company are not liable for the obligations of the company. The Board of Directors is the statutory body of the company, and it manages the company’s business activities and acts on its behalf. A joint-stock company formed on the basis of a public offering of shares must have at least CZK 20 000 000/approx. EUR 756 000 in registered capital. The amount of registered capital of a joint-stock company formed without a public offering must amount to at least CZK 2 000 000/approx. EUR 75 600. As a result of the implementation of EU regulations, Czech law also permits certain European companies to be set up here (i.e. a European Company and European Economic Interest Grouping). According to information published by the European Trade Union Institute, as of October 2009, there were 431 European companies registered within the EU, while more than 40% of them are registered in the Czech Republic.
More information at: www.mpo.cz– Ministry of Industry and Trade www.justice.cz – database of the Commercial Register www.mpo.cz/en/business-support – trades forms www.rzp.cz – Trade Register www.businessinfo.cz/en– websites on business in the CR www.portal.gov.cz – Portal of the public administration of the CR
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The Czech Republic’s accession to the
EU in 2004 put the regulation of business activities in line with
European standards and EU legislation. Setting up a business in the
Czech Republic has thus become much easier and more transparent not only
for subjects domiciled in any member state of EU but also for subjects
domiciled outside EU.