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2024 Company Formation in the Czech Republic

February 5, 2024

Company formation in the Czech Republic is regulated by the Civil Code and Business Corporations Act. Czech or foreign investors entering the Czech market may choose between several corporate forms. There are no limitations for foreign investors when it comes to setting up companies. A foreign natural or legal person may establish any form of company either together with other foreign or Czech persons, or alone as a sole shareholder. In this respect, foreign natural and legal persons enjoy the same rights and bear the same obligations as Czech persons and may not be discriminated against.

Download our 2024 guide on company formation in the Czech Republic, or read more below

Legal forms of business, minimum capital, contribution

General Partnership (Veřejná obchodní společnost | v.o.s.)

A General Partnership is a company in which at least two persons carry out business activities under a common business name and bear joint and several liabilities for the obligations of the partnership with all their property. There is no requirement of a minimum registered capital, nor for the minimal contribution.

Limited Partnership (Komanditní společnost | k.s.)

A company in which one or more partners are liable for the partnership’s liabilities up to the amount of their unpaid contributions (limited partners), and one or more partners are liable for the partnership’s liabilities with their entire property (general partners).

The minimum contribution of the limited partner should be set in the Articles of Association. Again, there is no requirement of a minimum registered capital.

Limited Liability Company (Společnost s ručením omezeným | s.r.o.)

This is the most common form of doing business in the Czech Republic. The company exists independently of its members, and it may be established either by one (natural or legal) person, or by two or more persons (the maximum number of persons is not set).

According to the Business Corporations Act, the minimum contribution of each shareholder is in the amount of CZK 1. The minimum registered capital is not set in the legislation, so it is derived from the amount of minimum contribution of a shareholder (for a Limited Liability Company with one shareholder the minimum registered capital is CZK 1).

A Limited Liability Company is liable for the breach of its obligations with all its assets, while shareholders guarantee for the breach of the obligations of the Limited Liability Company only up to their committed but unpaid contributions to the registered capital registered with the Commercial Register.


Did you know that LLC is the most common form of business in the Czech Republic? Benefit from our 2024 Limited Liability Company formation guide and learn more about the incorporation procedure, obligations and how we can help you with the establishment process.

Joint Stock Company (Akciová společnost | a.s.)

The company may be established even by a sole founder. A Joint-Stock Company may be formed by a private agreement to subscribe for all shares, or by a public call for the subscription of shares.

The minimum registered capital required is CZK 2,000,000 or EUR 80,000.

Cooperative (Družstvo)

The purpose of a Cooperative is to undertake business activities or to ensure the economic and social or other benefits of its members.

A Cooperative is a community of an indefinite number of persons, but it shall have at least 3 members.

The Business Corporations Act does not set out the amount of minimum registered capital or minimum contribution.

Branch (Odštěpný závod)

Foreign companies may conduct business in the Czech Republic provided that they have their business or branch offices located in the Czech Republic, registered with the Czech Commercial Register.

No minimum registered capital or contribution is required.

Other forms of business

There are other 3 legal forms of business – entities primarily regulated by EU regulations – which are legally binding for all EU Member States:

  • European Company (or “SE”, Societas Europaea)
  • European Cooperative Society
  • European Economic Interest Group

Minimum documentation and incorporation time

The most important document required when establishing a company in the Czech Republic are the Articles of Association / Foundation Deed adopted in the form of a notarial deed.

Other documents required are subject to circumstances. Usually the following documents are also required:

an affidavit of a managing director on their ability to perform on a position of statutory body of the company

a clean Criminal Register extract for non-Czech managing directors

a declaration on registered capital payment

a consent with the provision of a registered office address (from the office landlord)

Incorporation time varies based on company type. For example: the establishment of a capital company could be finished within 7 working days, while the establishment of a partnership is generally less time consuming, and it could be completed in 5 working days.

Shareholders and company´s bodies

Common setups

In the following table we present an overview of possible setups of shareholders and other company’s bodies in the most used legal forms of business:

Common setups Limited Liability Company Joint Stock Company Limited Partnership General Partnership
Shareholders Natural person(s) or legal entity(ies) Natural person(s) or legal entity(ies) At least 2 natural persons or legal entities At least 2 natural persons or legal entities
Company’s bodies

Managing director(s)

Supervisory board (voluntary)

Sole shareholder

or general meeting

General meeting

Monistic system: Managing board

Dualistic system: Supervisory board, board of directors
The statutory body consists of all of the general partners. The Articles of Association may specify that the statutory body is formed of only some of the General Partners or one of them. The statutory body consists of all of the Shareholders. The Articles of Association may specify that the statutory body is formed of only some of the Shareholders or one of them.

Special requirements

Persons who will form the statutory body have to prove their clean criminal history by obtaining and submitting their criminal background check from their country of citizenship.

If the shareholder is a legal person, the proof of its existence (excerpt from a commercial register) shall be required.

General overview of corporate taxes

Company formation in the Czech Republic and related taxes

Both corporate income tax residents and tax non-residents are subject to Czech corporate income taxes. A corporation is a tax resident if it is incorporated or managed and controlled from the Czech Republic. Tax residents are taxed in the Czech Republic on their worldwide income while tax non-residents only on their Czech-source income.

The taxable income is calculated on the basis of the accounting profits. As a general rule, expenses incurred on obtaining, ensuring and maintaining the taxable income are tax deductible.

Corporate income tax is levied at a general (standard) rate of 21%. Moreover, lowered corporate income tax rate of 5% applies to basic investment funds while pension funds are subject to a corporate income tax rate of 0%.

The tax period may be a calendar year or a fiscal year. The taxpayer has the obligation to calculate the tax due in the corporate income tax return (self-assessment). The time-limit for corporate income tax return filing is three or six months depending on certain conditions.

Advance tax payments are paid semi-annually or quarterly depending on the amount of the last known tax liability.

Find out more about taxes in the Czech Republic in our dedicated tax guideline.

Investment incentives

Czech and foreign legal entities, as well as natural persons engaged in business activities in the Czech Republic, can apply for investment incentives. The supported areas include:

manufacturing industry

technology centres (R&D)

production of strategic products for the protection of life and health

strategic service centers

When meeting the conditions, investment incentives can be provided in the form of:

  • corporate income tax relief for a period of 10 years
  • financial support for acquisition of tangible fixed assets up to 10% of the eligible costs
  • cash grant for job creation
  • cash grant for training of employees

Other aspects

Liability for damages caused by the statutory bodies

It is very important for the statutory body to act with due care and diligence when performing their role in a company. If the statutory body fails to comply with due care and diligence, it is liable for damages sustained by a company.

Unfortunately, this liability cannot be limited in any way (for example by an agreement with the company etc.).

In order to protect the statutory bodies, insurance companies in the Czech Republic provide a commercial insurance option, meant to insure against damages caused by the decisions of statutory bodies.

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