Although in the last ten years, all governments have declared the electronization of government and the bureaucracy for entrepreneurs, the opposite is true. And unfortunately, this is also true for establishing a company by a foreigner. What can be done in some countries completely online and in hours, it can't be done by us - personal meetings with a notary or with the authorities are necessary. And it may take weeks. And if the company wants to become a VAT payer, so much longer. But this is another topic. The same as Czechs, foreigners must be over 18 years of age and fit to legal acts.
What are the options for doing business in the Czech Republic?
A foreigner can do business as a self-employed person (self-employed) or run a company. The same as Czech citizens, foreigners can choose from several types of companies:
- Limited Liability Company (spol. S ro, s.r.o.)
- joint-stock company (a.s.)
- public company (vos)
- Limited Partnership (ks)
What does a foreigner need to start a business? A trade register (formerly a trade license) for a given field of business, either in its name (self-employed) or in a company (other variants). The most commonly used form is a limited liability company or a joint stock company, so we will deal with them in more detail.
S.r.o. already for a few crowns
The limited liability company is the most popular type of company in the Czech Republic for both Czechs and foreigners. You may have a single shareholder or more shareholders who are liable for the firm's shareholding in the share capital. Beware, for example, a self-employed person doing business under a trade license guarantees his entire property. The registered capital (equity) can be very small, even just a crown for each of the partners, but if you want solid business partners, it is preferable to pay a significantly higher amount. The company is decided by the so-called General Meeting, which is governed by the majority shareholders' opinion. The normal agenda is handled by the executive or the executives. When setting up a company, it is necessary to determine who can decide on the company. Each potential business partner, but also the authorities, then follows what is listed in the Commercial Register. For establishing s.r.o. a foreigner must submit some documents whose specifications differ according to whether he / she wants to be just a partner or also an executive. The Managing Director must submit the Criminal Record from Register of the Czech Republic as well as the country of origin; Neither the partner nor the agent need to have a residence permit in the Czech Republic. The company also needs a headquarters, which can be solved, for example, by renting an address in one of the office parks if the company does not need a real day-to-day office. The registered office must be marked with the company name and assigned identification number (IČO). As for the name, we recommend that you check whether the name you have chosen or very similar is no longer registered. Almost the same name may unnecessarily complicate the delivery of shipments. All information must be submitted in writing to the Commercial Register at the court according to the place of the registered office of the company, which will then register the new company. On the day of registration, the company begins to exist. As the other types of companies, each company must set up a data box through which it is legally necessary to communicate with the tax authority and other state institutions.
Joint Stock Company
The registered capital of a joint stock company consists of shares. Their owners are the owners of the company and decide to run it according to the size of their shareholding. The Company is liable for its obligations with all its assets (company, not its shareholders).
A shareholder may be only one or several shareholders. For its operation are important statutes, which must have the character of a public document.
The minimum amount of registered capital is CZK 2 million. Other conditions are similar to s.r.o. After submitting all documents, the joint stock company is registered in the relevant Commercial Register.
Foreigner and Business in the Czech Republic
But not only the establishment of a company by a foreigner may lead to economic activities in the Czech Republic. The company can also be bought ready, there are a number of companies specializing in similar activities. However, care must be taken to ensure that the company has no outstanding liabilities in the past. This can be verified in the insolvency register and also in the central register of executions. We also recommend checking the former statutory representative of the purchased company. A foreigner does not have to physically reside in the Czech Republic to do business there. But he must have a representative who represents him in dealing with the authorities, which is usually a lawyer or tax advisor. With regard to a trade license for a natural person, the situation is somewhat more complicated and varies according to whether the foreigner comes from - European Economic Area countries or third countries. Are you considering establishing a company in the Czech Republic and are you a foreigner? Contact us, we will be happy to discuss with you.