Czech Republic

Starting a Business in

Czech Republic

Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Czech Republic. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.

This information was collected as part of the Doing Business project, which measures and compares regulations relevant to the life cycle of a small- to medium-sized domestic business in 185 economies. The most recent round of data collection was completed in June 2012.

Compare Czech Republic to 184 other economies.

YearNew business densityNumber of new limited liability companies
2011 2.8421,173

  • Standardized Company

  • Legal Form: Spolecnost s Rucenim Omezenym (SRO)
  • Paid in Minimum Capital Requirement: CZK 100,000
  • City: Prague

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No. Procedure Time to Complete Associated Costs
1 Check business name for uniqueness

The uniqueness of the company name can be verified by accessing a database on the Ministry of Justice's Web site (www.justice.cz)

 1 day no charge
2 Obtain extracts of criminal record and real estate at Czechpoint Offices

Real estate extract can be obtained from so-called Czechpoints, which are usually located at the post offices, municipal and district offices.
1 day CZK 200
3 Notarize articles of association

Fees to notarize the articles of association depend on the amount of the company’s registered capital and on the number of copies of the notarial record required by the company's founders. The minimum fee is about CZK 4,000, and the maximum is about CZK 113,000, including 20% VAT. The notary public is responsible for the compliance of the contents of the company’s articles of association with Czech law. The notary prepares the wording of the articles of association according to the founders' requirements. Certain notaries public require the following documents before executing the articles of association:

• An affidavit from the company managers
• Confirmation from the owner of premises where the seat will be located that the company is entitled to have its seat on those premises, along with an extract for the premises from the Real Estate Register

The founders must comply with the requirements stipulated by the Czech Commercial Code. They must confirm their compliance in an affidavit submitted to the City Court, and they must also submit their signature specimens to the City Court in two copies.
1 day CZK 20,310
4 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 for the registered capital.

Until the company is registered, the registered capital is usually blocked in the special bank account. Opening a special bank account usually costs about CZK 5,000. However, some banks open special accounts for nothing on condition that the company will open current bank accounts in the bank after its incorporation.
2 days no charge
5 Register with the Trade Licensing Office and obtain extract of the trade license

The company has to regsiter its business activities with the Trade License Office to be able to obtain an extract of its trade license. The required documents are as follows:
(i) memorandum of association if the company has been founded but not yet established (i.e. registered with the Commercial Register); if the company has already been registered with the Commercial Register, an excerpt thereof that cannot be older than 3 months will be required;
(ii) proof of legal use of premises (i.e. a notarized copy of the (sub)lease agreement or the excerpt of the Real Estate Cadastre); and
(iii) proof of payment of the administrative fee

The Trade License Office must complete the registration process within 5 business days from the day when all required documents were submitted. After the completion of the registration process, the Trade License Office issues the excerpt of the trade license register which must be delivered to the applicant, either picked-up personally by the applicant at the Trade License Office or delivered by mail. The first issue of the trade license is free of charge.

It is also possible to file the application online; however, the applicant must have a certified signature, otherwise such application will not be considered effective.

5 days CZK 1000
6 Register in the Business (Commercial) Registry of the Regional Commercial Court

The Czech Commercial Code and the Czech Civil Procedure Act were amended to comply with European Community law (effective July 1, 2005) and to simplify and speed up registering in the Commercial Register. The amendment introduced standard forms for applications, reduced the number of participants to the proceedings, introduced a simplified procedure for registration (by entering the data without substantive review for certain types of entries), stated the exact time limits for decisions and their issuance and entries, introduced the "silence-is-consent" rule, and set limits for implementing the full electronic administration of the Commercial Register. Since July 1, 2006, the time limit for the court to decide on registration is 5 working days. To register a newly founded company in the Commercial Register, an application must be submitted to the relevant court administering the register. This application must be completed on a standard form and signed by all first directors of the company (or their proxy, if applicable) before a notary.

The following documents must be enclosed with the application for company registration in the Commercial Register: (a) the company’s articles (memorandum) of association in the form of a notarial deed; (b) documents proving the company's title to the premises in which its seat is located (as described in Procedure 3); (c) 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 contributions are at least CZK 100,000; (d) a confirmation from the relevant bank that the capital contributions are held in the company's special bank account for the registered capital; (e) documents on the company managers/executive; and (g) the executive's affidavit with notarized signature, his or her sample signature, and his or her consent to their registration into the Commercial Register.
7 days CZK 6,000 (paid in the form of court stamps)
7 Register for taxes

Deadlines for registering with the Tax Office:

• Income tax and general registration: 30 days (any change must be announced within 15 days)
• Withholding tax and payroll tax registration: 15 days
• For the VAT obligatory registration: on January 1, 2010 amendment No. 362/2009 to the Act on VAT took effect. From this date the company is obliged to submit its VAT registration form within 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
• For the 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).
1 day no charge
* 8 Register for social security

The company must register within 8 days as of the date when the first employee enters into work (the employee's and employer's registration are in practice be made at the same time). A 8-day notification deadline applies in case of certain changes occur.
1 day (simultaneous with previous procedure) no charge
* 9 Register with health insurance

The same rules apply as for social security registration.
1 day (simultaneous with previous procedure) no charge
* Takes place simultaneously with another procedure.
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