#

Ease of Doing Business in

Czech Republic

Czech Republic Download Profile (1781.2KB, pdf)
Region OECD high income
Income Category High income
Population 10,551,219
GNI Per Capita (US$) 18,050
City covered Prague

190

1

DB 2017 Rank

1

100

DB 2017 DTF (% points)

  • local_library
  • group
Topics DB 2017 Rank DB 2016 Rank info_outline Change in Rank DB 2017 DTF (% points) info_outline DB 2016 DTF (% points) info_outline Change in DTF (% points) info_outline
Overall 27 26 down
1
76.71 76.43 down
0.28
Starting a Business 81 88 up
7
86.86 85.23 up
1.63
Dealing with Construction Permits 130 126 down
4
62.76 62.73 up
0.03
Getting Electricity 13 13
-
90.32 89.99 up
0.33
Registering Property 31 31
-
79.68 79.32 up
0.36
Getting Credit 32 29 down
3
70.00 70.00
-
Protecting Minority Investors 53 51 down
2
60.00 60.00
-
Paying Taxes 53 53
-
80.69 80.50 up
0.19
Trading across Borders 1 1
-
100.00 100.00
-
Enforcing Contracts 68 67 down
1
60.36 60.36
-
Resolving Insolvency 26 22 down
4
76.42 76.17 up
0.25

Positive=Doing Business reform making it easier to do business. Negative=Change making it more difficult to do business.

DB 2017 Rank: 81

DB 2016 Rank: 88

Change in Rank: up7

DB 2017 DTF (% points): 86.86

DB 2016 DTF (% points): 85.23

Change in DTF (% points): up1.63

Standardized Company
Legal form: Spolecnost s Rucenim Omezenym (SRO)
Paid-in minimum capital requirement: CZK 1
City: Prague
Indicator Czech Republic OECD high income
Procedure – Men (number) info_outline 8.0 4.8
Time – Men (days) info_outline 9.0 8.3
Cost – Men (% of income per capita) info_outline 5.7 3.1
Procedure – Women (number) info_outline 8.0 4.8
Time – Women (days) info_outline 9.0 8.3
Cost – Women (% of income per capita) info_outline 5.7 3.1
Paid-in min. capital (% of income per capita) info_outline 0.0 9.2
  • No. Procedure Time to Complete Associated Costs
    1

    Check the uniqueness of the company's name

    Agency: Ministry of Justice

    Business founders can verify the uniqueness of their company's name on a database on the Ministry of Justice's Website (www.justice.cz).
    Less than one day (online procedure) no charge
    2

    Notarize Articles of Association and Lease Agreement

    Agency: Public Notary

    The notary prepares the articles of association according to the founders' requirements, and the notary is responsible for the compliance of the contents of the company’s articles of association with Czech law.

    Certain notaries require the following documents before executing the articles of association:
    • An affidavit from the company managers.
    • Building lease agreement, or ownership extract from the Real Estate Register, for the premises of the company’s headquarters.

    For the articles of association, total notarization fee is assessed by percentage cost of start-up capital, as set out by the decree no. 432/2013 Coll, effective from January 1, 2014. For the initial 100,000 CZK in start-up capital, the notary fee is 2% or 2000 CZK; for the subsequent capital up to 500,000 CZK the notary fee is 1.2% (or 4,800 CZK at full amount); for the subsequent capital up to 1,000,000 CZK the notary fee is 0.6% (or 3,000 CZK at full amount); for the subsequent capital up to 3,000,000 CZK the notary fee is 0.3% (or 6,000 CZK at full amount); and for the subsequent capital up to 20,000,000 CZK the notary fee is 0.2% (or 895 CZK at full amount). For a case study company with start up capital of CZK 3,447,359 the notary fee comes to 16,695 CZK. The fees do not include VAT (21%).

    In addition, if each founder wants their own original copy, then the cost is CZK 100 per page. Alternatively, instead of original copy a founder can ask for a certified copy and the cost would be 30 CZK per page. These costs are optional, and up to each founder to incur.

    The company must also certify its building lease agreement by a public notary. The cost to certify the lease agreement is CKZ 30 +21% VAT with a notary.
    1 day CZK 17,066.77
    3

    Obtain confirmation of the administrator of the capital contribution of the company, along with the confirmation of the bank that the capital contribution is held in the company’s special bank account

    Agency: Bank

    Until the company is registered, the paid-in capital is typically blocked in the special bank account. Opening a special bank account can costs as much as CZK 5,000, though most banks open special accounts for free on the condition that the company will continue to bank with them after the incorporation. Banks typically require notarized articles of association to open a corporate bank account.
    2 days no charge
    4

    Register with the Trade Licensing Office and obtain extract of the trade license

    Agency: Trade License Office

    The company must register its business activities with the Trade License Office to obtain an extract of its trade license. The required documents are as follows:

    • Application for registration;
    • memorandum of association if the company has been founded but not yet established (i.e. registered with the Commercial Register);
    • proof of legal use of premises (i.e. a notarized copy of the premises lease agreement);
    • proof of payment of the administrative fee.

    The application form may be accessed online at: http://www.rzp.cz/elpod.html

    The Trade License Office must complete the registration process within 5 working days from the day when all required documents were submitted, and typically does so in 1-2 days. After the completion of the registration process, the Trade License Office issues the excerpt of the trade license register which is either picked-up personally by the applicant at the Trade License Office, delivered by post mail, or delivered to an electronic data box.

    Upon company registration, the Trade License Office notifies the Ministry of Interior regarding new company formation triggering automatic set up of an electronic data box pursuant to 1 July 2009 Act No. 300/2008 Coll., “On electronic transactions and authorized conversion of documents.” The Act requires all public and private entities to use an electronic data box for encrypted exchange of official documents and information. Pursuant to the Law, the data box for a legal entity (including a limited liability company) registered in the Trade License Office and /or Commercial Register is established automatically and free of charge by the Ministry of Interior, after it receives the information from the relevant registration authority. Alternatively, the company may set up a data box prior to official company registration with government authorities, via in person request at a Czech POINT contact point located in the post office.

    In case the company chose to create the electronic data box prior to registration with the Trade License Office, it may apply for the trade license electronically, via the data box. However, most companies prefer to file the application in person, in order to get additional information and explanation regarding starting a business procedures in Czech Republic.
    2 days CZK 1000
    5

    Register in the Business Registry of the Regional Commercial Court through a notary

    Agency: Business (Commercial) Registry of the Regional Commercial Court

    To register a new company in the Commercial Register, an application must be submitted to the relevant court administering the register. This can be done in person or through a notary.

    Notaries are able to register a limited liability company's (s.r.o.) information into the commercial register online, at the cost of CZK 2700. The cost of notary services is about CSK 1300 for this procedure.

    Registering the business in person is more costly and takes more time. The registration has a cost of CZK 6000 paid in the form of stamps. The time limit for the court to decide on registration is 5 business days, which stretches to 7 calendar days in the event application is filed after Monday.This application must be completed on a standard form (accessed at: http://www.rzp.cz/elpod.html http://epodatelna.justice.cz/ePodatelna/epo1200new/technicke_parametry.jsp) and signed by all first directors of the company (or their proxy, if applicable) before a notary.

    The required documents are as follows:
    • application form;
    • notarized articles of association;
    • notarized lease of the premises in which company headquarters are located;
    • a confirmation from the administrator of the contributions into the company's registered capital confirming that each founder paid up at least 30% of his or her monetary capital contribution and that the total paid up capital contribution is at least CZK 1;
    • a confirmation from the relevant bank that the capital contributions are held in the company's special bank account for the registered capital;
    • biographic data on the company managers/executive.





    1 day CZK 4,000 (CZK 2,700 registration fee and CZK 1,300 notary fee)
    6

    Register for taxes

    Agency: Tax Office

    The deadline for income tax registration is 15 days from the company incorporation. Other deadlines are as follows:

    • Withholding tax and payroll tax registration: 8 days;
    • VAT obligatory registration: 15 days following the end of month in which the conditions are met, or in certain cases, within 15 days following the date when the company automatically becomes a VAT payer;
    • VAT voluntary registration: submit the registration at any time.

    Upon submitting the application for income tax registration, the company receives a tax identification number (same number as for the VAT and the income tax).

    In accordance with Section 6(1) of Act No. 235/2004, on Value Added Tax, a company must register to pay VAT exceeds it its turnover exceeds CZK 1,000,000 over the last 12 months.

    Pursuant to the amendment to Section 72 (4) of the Tax Code, starting January 1, 2015 companies are required to submit tax registration and tax returns (for income tax and VAT) via the electronic data box. Previously online tax registration was not compulsory. The tax form is accessible online at: https://adisepo.mfcr.cz/adistc/adis/idpr_pub/dpr/uvod.faces
    Less than one day (online procedure) no charge
    * 7

    Register for social security

    Agency: Social Security Administration

    The company must register for the social security registration (which is referred to in Czech law as “the Register of Employers”) within 8 days of the date when the first employee starts work. Application for the Register of Employers may be submitted either online through a data box or in person. After the registration is completed, most of the further documents which are required by the Social Security administration may be submitted online through a data box or a different online platform. The application form is available on the following website: http://www.cssz.cz/cz/tiskopisy/nemocenske-pojisteni.htm
    1 day (simultaneous with previous procedure) no charge
    * 8

    Register for health insurance

    Agency: Health Insurance companies

    The company must register for the health insurance registration within 8 days of the date when the first employee starts work. It is possible to do so online, although each health insurance company has its own website. Applications can be submitted through the data box, or in person.
    the most common (state-owned) Health Insurance Provide in the Czech Republic:
    http://www.vzp.cz/platci/tiskopisy/prihlaska-a-evidencni-list-zamestnavatele
    http://www.vzp.cz/platci/tiskopisy/hromadne-oznameni-zamestnavatele

    1 day (simultaneous with previous procedure) no charge

    * Takes place simultaneously with previous procedure.