Czech Republic is a member of EU since 2004 and takes place in the middle of Europe as a bridge between big markets (West Europe) with Eastern Europe. By having a stable and promising economic situation Czech Republic is a attractive country for the foreigner investors.Establishing a company in Czech Republic is a strategic step for foreign investors seeking access to both Western and Eastern Europe.
Country Overview
- Official Name: Czech Republic (Česká republika)
- Capital: Prague
- Population: Approximately 10.7 million (as of 2024)
- Official Language: Czech
- Religion: Christianity (mainly Catholic), but with a high percentage of secular population
- Climate: Temperate continental climate; cold winters, mild summers
- Time Zone: UTC+01:00 (UTC+02:00 during daylight saving time)
- Phone Code: +420
- Currency: Czech Koruna (CZK)
Types of Companies in the Czech Republic
| Company Type | Description |
|---|---|
| Limited Liability Company (s.r.o.) | The most common company type established by investors in the Czech Republic. It can be founded by one individual or legal entity with a minimum capital of CZK 1 per shareholder. Its main advantage is the minimal and flexible capital requirement. |
| Joint Stock Company (a.s.) | Typically used for larger-scale businesses or companies considering public offering. Requires a minimum capital of CZK 2,000,000. Shares are transferable, and the company has a more complex governance structure. |
| General Partnership (v.o.s.) | Formed by at least two individuals who share unlimited liability for the company’s debts. No minimum capital is required, but partners bear full personal responsibility. |
| Limited Partnership (k.s.) | Composed of at least one general partner with unlimited liability and one limited partner liable only up to their contribution. It is suitable for investor–operator collaborations. |
| Cooperative (družstvo) | Formed by at least three individuals or two legal entities to fulfill shared economic or social objectives. Operates on a democratic “one member, one vote” principle. |
| Branch Office (organizační složka) | A dependent unit of a foreign parent company, registered in the Czech Commercial Register. It does not have a separate legal personality but is fully liable through the parent entity. |
Taxation in Croatia
Corporate Income Tax in Czech Republic
| Tax Type | Rate |
|---|---|
| Standard Corporate Tax | 21% |
| Investment Funds (certain types) | 5% |
VAT rates in Czech Republic
| Rate Type | VAT Rate | Description |
|---|---|---|
| Standard Rate | 21% | Applies to most goods and services |
| Reduced Rate | 12% | Applies to food, books, hotel accommodation, medicines, children’s car seats |
| Zero Rate | 0% | Applies to intra-EU exports and certain publications |
When establishing a company in the Czech Republic, it is crucial to understand your tax obligations. This is because the type of company you choose will directly determine how your profits will be taxed. Contact us for specialized support on company formation, taxation processes, and legal compliance in the Czech Republic.
