STARTING A BUSINESS IN PRAGUE: step by step guide

Doing business in Prague has several indisputable advantages. The Czech Republic has one of the lowest tax rates in Europe and the costs of a qualified workforce and living expenditures are much lower than in the rest of Western Europe. There are several first-rate universities in Prague ensuring a sufficient number of young educated people. Since Prague is the capital of the Czech Republic and all state institutions are located here, it is possible to arrange all the requirements related to business within one city. Prague is also the seat of many chambers and business support organizations in the Czech Republic. Furthermore, the well-known Prague address gives the entrepreneur a guaranteed prestige and creditworthiness.

Step by step guide for setting up a business in Prague

1. SELECTING THE COMPANY TYPE:

• Limited liability company (s.r.o.)
• Joint-stock company (a.s.)
• Limited partnership (k.s.)
• General commercial partnership (v.o.s.)

2. ESTABLISHMENT OF A COMPANY

• Notarial deed executed by a Czech notary

3. OPENING OF A BANK ACCOUNT

• Founders must pay the monetary contributions into a special bank account opened specifically for this purpose
• Before registration to Commercial register, money can be used only for establishment-related costs

4. TRADE LICENCES AND REPRESENTATION

• Both branches and companies must obtain a trade licence from a trade licensing office
• They must appoint a responsible representative (‘odpovědný zástupce’) responsible for the company’s compliance with the conditions of the trade licences
• The company has the option to submit a single application to the trade licensing office; in such application, it will apply for both trade licence(s) and registration with the tax office (for all types of tax, except for the excise tax and some ecological taxes) along with the application for a trade licence.

5. REGISTRATION OF A COMPANY IN THE COMMERCIAL REGISTER

• The executive body of the company must file an application to the Commercial Register to register the company within six months of its incorporation
• Obligatory standardised forms for applications to the Commercial Register are available on the webpage of the Ministry of Justice

6. REGISTRATION OF BENEFICIAL OWNERS

• All companies must register their beneficial owners in the newly established Register of Beneficial Owners
• The information on beneficial owners will be available only to selected public authorities and persons required under the anti-money laundering legislation to perform identification of a client