Start Business : Prague in the Czech Republic

Czech Republic – Starting Business -

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 in launching a commercial or industrial firm with up to 50 employees.

Check the uniqueness of the company’s name
Agency: Ministry of Justice’s Web site Start Business Czech republic
Business founders can verify the uniqueness of their company’s name on a database on the Ministry of Justice’s Website (www.justice.cz).

Obtain extracts of criminal record and real estate at CzechPoint Offices
Agency: CzechPoint Office Start Business Czech republic
A real estate extract can be obtained from CzechPoints, which are usually located at the post offices, municipal, and district offices. Since 2013, companies with a domestic Czech Republic address have been able to obtain necessary documents online with a hard copy delivery. Who does not own any property in Czech Republic, may use the services of our clever Virtual Office Prague comfortably.

Regarding the criminal records, the court requests the extract only from the Czech Criminal Register for domestic entrepreneurs. If the state in question does not keep a criminal register, the extract may be substituted by an affidavit signed by the entrepreneur before a notary or the state administration. The above documents may be substituted by a certificate of professional qualification as long as it fulfills the conditions of impeccability. All extracts or affidavits cannot be older than three months. Giving permission for placing a seat of your company can be issued up to 60 months by us.

Notarize articles of association
Agency: Public Notary Start Business Czech republic
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 5.000, and the maximum is about CZK 100.000 excluding VAT. The notary public is responsible for the compliance of the contents of the company’s articles of association with Czech republic law.

The notary prepares the articles of association according to the founders‘ requirements. Certain notaries public require the following documents before executing the articles of association: ^1.) An affidavit from the company managers. ^2.) Confirmation from the owner of premises where the seat will be located (Virtual Office Prague) that the company is entitled to have its seat on those premises, along with an extract for the premises from the Czech Real Estate Register for control as an attachment.

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. Since January 2012, it is no longer required to submit the founders‘ signatures to the City Court.

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 Start Business Czech republic
Until the company is registered, the paid-in capital is typically blocked in the special bank account. Opening a special bank account usually costs up to CZK 5.000 excluding VAT. However, some banks open special accounts for free on the condition that the company will open a bank account after its incorporation.

Register with the Trade Licensing Office and obtain extract of the trade license
Agency: Trade License Office Start Business Czech republic
The company has to register its business activities with the Trade License Office to obtain an extract of its trade license. The required documents are as follows: ^1.) 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 is required; ^2.) proof of legal use of premises (i.e. a notarized copy of the sublease agreement or the excerpt of the Real Estate Cadastre); and ^3.) proof of payment of the administrative fee.

The Trade License Office must complete the registration process within 5 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 for the application to be considered.

Register in the Business Registry of the Regional Commercial Court
Agency: Business (Commercial) Registry of the Regional Commercial Court
At least 30% of the monetary capital contributions must be paid prior to submitting an application. The application for entry into the Commercial Register must be filed generally within six months from the foundation of the company (the concluding of the articles of association). 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 notary deed; ^(B) documents proving the company’s title to the premises in which its seat is located; ^(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; ^(D) a confirmation from the relevant bank located in Czech republic that the capital contributions are held in the company’s special bank account for the registered capital; ^(E) documents on the company managers/executive.

Register for taxes
Agency: Tax Office Start Business Czech republic
The deadlines for registering with the Tax Office are as follows: ^1.) Income tax and general registration: 30 days from the registration of the Company by the Commercial Register; ^2.) Withholding tax and payroll tax registration: 8 days; ^3.) For the 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; ^4.) For the VAT voluntary registration: submit the registration at any time;

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

Register for social security
Agency: Social Security Administration Start Business Czech republic
The company must register within 8 days as of the date when the first employee enters into work (registration for both the employees and employers are made in practice at the same time). An 8-day notification deadline applies in case certain changes occur.

Register for health insurance
Agency: Health Insurance companies Start Business Czech republic
The rules for social security registration in Czech republic also apply when a company registers for health insurance. Start Business Czech republic

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