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Czech Republic Legal entities and incorporation

Historical overview

Czech history consists of rich historical dynasties such as the Great Moravian Empire, the Luxembourg Dynasty, the Premysl Dynasty, the Hussite Revolution, the Jagellon Dynasty and the Habsburg Dynasty. Many ethnic groups occupied what is known today as the Czech Republic dating back to the 4th century B.C. one of which being the Celts. After a period known as the “Migration of People’s” which occurred around the early 6th century, Slaves settled in Bohemia, one of the three historical regions that comprise Czech, others being Silesia and Moravia.

Czech Republic – a new beginning

Czech-Republic1-jurisdictionUntil the early 1990’s, Czechoslovakia, an Austro-Hungarian empire, was comprised of Czech Republic and Slovakia. Following the peaceful dissolution of Czechoslovakia back in the 1993’s into two separate states being Czech Republic and Slovakia, Czech Republic became a single autonomous state established and regulated through a parliamentary democracy system .Czech Republic succeeded in the EU in 2004, together with the Republic of Cyprus, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia. It has been characterized as a medium-sized European Nation with a population of just over 10 million.

The largest part of the population of the Czech Republic is distributed between Brno, Plzen, Olomouc, Prague and Ostrava, being the five largest cities in Czech Republic. The capital city of Czech Republic is Prague, consisting of over 1 million settlers. Prague is characterized by many as being the jewel of Czech Republic, a major tourist attraction with a wide range of shops, rich culture, quality restaurants, high class hotels and bars.

Doing business in Czech Republic

Cross border business professionals use Czech Republic to conduct their business. Investing in Czech Republic has many benefits. In particular, Czech Republic was announced in a report issued by the World Economic Forum as ranking 46th among 148 world economies of having a competitive business environment.

By the early 2012’s the Act on Business Corporations and Civil Code was enacted as the new legislation that governs corporate entities in what is known today as the Czech Republic.

The new legislation has effect for all business companies that are governed by Czech law including for matters such as registering a Czech company in the Commercial Register. Czech Republic is a proud member of the Multilateral Investment Guarantee Agency, an international organization.

Czech-Republic2-jurisdictionThe Czech Republic offers protection to its investors as it is a member of the Multilateral Investment Guarantee Agency (MIGA), an international organisation which is a member of the World Bank Group that seeks to promote foreign direct investment, provides help and support for causes such as economic growth, reduction of property and improvement of living standards. Czech Republic is also a party to a number of bilateral treaties that also protect investment from abroad, such as but not limited to the United States, Germany, United Kingdom, Austria, Italy, Luxembourg, the Netherlands, and China whilst also becoming a party to many double taxation avoidance treaties with a wide range of jurisdictions.

With exception to Prague, the Act of investment enables Czech Republic to offer full corporate tax relief of up to ten years for new companies whilst offering partial corporate tax relief for the same amount of years with companies that are already in existence. In specific regions, funding is available amounting to a total of 45% for any new employees that require training. Capital Investments support for any large strategic investment project that is relevant to areas of technology or manufacturing, reaching up to 5% investment availability, if the requirements are met.

Foreign companies can operate in the Czech Republic either through the use of a branch office or by incorporating their own Czech company.

The governing law for business entities is the Czech Act on Business Corporations and the new Civil Code which essentially sets out a wide range of business vehicles and legal entities, utilized for conducting business in the Czech Republic, not all however are required to be registered within the Commercial Registrar.

As well as its natural beauty, it is also an attractive jurisdiction in which to incorporate your business. If you are considering to register a company in the Czech Republic or just want information regarding incorporation, please contact us directly.

Legal entities in Czech Republic

  1. Limited Liability Company
  2. Joint Stock Company
  3. Limited partnership
  4. General commercial Partnership
  5. Branch Office.