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Keeping up with corporate compliance in the Czech Republic is not just about avoiding fines – it is essential for building trust with banks, investors, business partners, and regulators. Whether you’re a local founder or managing a Czech subsidiary from abroad, fulfilling your legal duties signals transparency, stability, and long-term commitment to the market.
Failing to meet statutory requirements can result in penalties, blocked corporate actions (like profit distribution), or even dissolution of the company. In cross-border setups, non-compliance may also affect parent companies or trigger issues with double taxation treaties and reporting obligations abroad. Keeping your corporate compliance in the Czech Republic in order is the foundation for safe and scalable operations.
The Czech legal system recognizes several types of business entities, but for most corporate compliance matters, three forms are the most relevant: the limited liability company (společnost s ručením omezeným), the joint-stock company (akciová společnost) and the branch (odštěpný závod) of a foreign entity.
While all three must follow general rules on accounting, taxation, and public disclosure, they differ significantly in governance and the scope of statutory reporting and regulatory expectations. Understanding your entity’s legal form is essential to know what exactly your company must approve, report, and file on an annual basis.
This chapter provides a quick refresher to help you identify what compliance obligations apply to your current (or chosen) structure in the Czech Republic.
| Feature | LLC | JSC | Branch |
| Legal personality in the Czech Republic | ✔ | ✔ | ✗ acts on behalf of foreign company |
| Annual financial Statements | ✔ | ✔ | ✔ |
| Audit obligation | Based on size criteria | Based on size criteria | Based on size criteria |
| Trade or other relevant licenses | ✔ | ✔ | ✔ |
| UBO registration | ✔ | ✔ | ✗ |
| Suitable for | SMEs, local operations | Larger entities, investment-heavy structures | Foreign structure testing or expanding to CZ |
Tip: A branch can be a quick way for foreign companies to enter the Czech market, but it offers no legal separation from the parent company. That means all liabilities in the Czech Republic legally affect the foreign entity.
Discover more information about our company incorporation services in the Czech Republic.
If you have decided to form a company in the Czech Republic and have completed the whole incorporation process, a few essential steps remain. These post-incorporation obligations are required to ensure your company is fully compliant and operational under Czech law. Whether you are launching a small LLC or a larger JSC, or registered a Branch, the following tasks must be addressed promptly after incorporation.
All Czech legal entities must register their UBO(s) in the Register of Beneficial Owners (Evidence skutečných majitelů). This must be done without undue delay after the legal entity’s registration in the Commercial Register. Failure to register the UBO(s) may result in financial penalties or restrictions on corporate rights (e.g. receiving dividends). You can find detailed information about the registration of the ultimate beneficial owner(s) in our dedicated eBook.
Note: Branches are not required to register UBO(s), as they are not separate legal entities.
New entities must register with the Czech Tax Authority for corporate income tax (CIT). This registration must be filed within 15 days of the legal entity’s registration in the Commercial Register.
Note: VAT registration is separate and required only if specific turnover thresholds apply; however, voluntary VAT registration is also possible.
All registered entities are automatically assigned a Data Box – a secure digital mailbox used for official communication with courts, tax authorities and other public bodies, but also with private entities. Use of the data box is legally binding: once a message is delivered there, it is considered served.
Access is granted to:
Important: If your directors or branch managers are based abroad, ensure someone local (e.g. legal or accounting provider) is authorized to access the data box regularly since the user interface is only available in Czech.
Most businesses will require a Czech bank account for operational purposes such as paying suppliers, receiving local payments, and fulfilling tax and payroll obligations. Although not a formal legal requirement, it is a practical necessity for day-to-day functioning.
Banks usually require:
Note: Due to banking regulations and anti-money laundering rules, account opening can take several days or even weeks, especially for companies with foreign shareholders or complex structures. Early planning is strongly recommended.
Czech companies and, in some cases, branches, must meet several annual compliance requirements, typically based on the end of the accounting period (usually 31 December). These include tax filings, preparation and approval of financial statements, and submission of statutory reports.
Failure to meet these obligations may result in penalties, deregistration warnings, or reputational harm with authorities and banks.
All entities must prepare annual financial statements in Czech and in accordance with Czech accounting standards (CAS). These include:
Whether a company is subject to a statutory audit depends primarily on its size. An audit is typically required if the company exceeds certain financial or personnel thresholds defined by Czech law (e.g. turnover, assets, number of employees) over two consecutive years.
As of the financial year starting on 1 January 2026, the thresholds defining small accounting entities (which are generally not subject to mandatory audit) will be increased. A mandatory statutory audit will therefore apply for entities that, in two consecutive financial years, exceed at least two of the following criteria: assets of CZK 120 million, net annual turnover of CZK 240 million, and an average of 50 employees. Voluntary audits may also be conducted for credibility, group consolidation, or internal governance purposes.
If the financial statements are audited, the company is also required to prepare an annual report (výroční zpráva). This report must include the financial statements, the auditor’s report, and additional disclosures such as risk factors, corporate governance, and business activity overview.
All Czech companies are required to have their annual financial statements (annual reports) approved by the general meeting of shareholders (or sole shareholder, if applicable) within 6 months of the end of the previous accounting period.
The same general meeting must also decide on the distribution of profit or loss settlement.
Important: A company must not distribute profits or other funds if doing so would cause it to become insolvent or deepen an existing insolvency.
Note: This obligation does not apply to branches.
Financial statements (annual reports) must be filed with the Collection of Deeds within 12 months of the end of the preceding accounting period.
Each company is obliged to file its corporate income tax return annually – generally within 3 months of the accounting year-end, or 6 months if filed by a registered tax advisor.
Note: Even dormant companies must submit a tax return.
Each company that is controlled by another entity (within the meaning of the Czech Business Corporations Act) is required to prepare a Report on Relations (zpráva o vztazích), hereinafter the “Report”.
The Report describes the relationships between:
In other words, the Report provides an overview of intragroup relationships, including:
If the company is subject to statutory audit, the Report must contain more detailed disclosures and is considered an integral part of the company’s Annual Report.
The Report must be:
Note: The Report does not need to be prepared by branches.
Applies to: Joint-stock companies with supervisory boards only.
Before the general meeting approves financials, the supervisory board must review the financial statements and issue its opinion.
Note: LLCs may establish a supervisory board, in which case the supervisory board is required to submit an annual report on its activities to the general meeting.
Applies to: Non-audited joint-stock companies.
Joint-stock companies not subject to statutory audit are required to prepare a report on the company’s business activities and the state of its assets (zpráva o podnikatelské činnosti a stavu majetku společnosti), and to publish it together with the financial statements.
The purpose of this report is to provide shareholders with transparent information on the company’s overall economic situation, performance, and financial standing.
This report must be published at least 30 days before the general meeting that will decide on the approval of the financial statements.
Hiring employees in the Czech Republic comes with a defined set of legal duties. These include:
Czech law does not require every policy to be in place, but certain internal rules are strongly recommended – or in some cases, mandatory:
Czech companies must maintain a range of formal records and comply with ongoing administrative duties. These obligations are required regardless of company size or turnover and apply equally to active and dormant entities:
Keeping shareholders’ records (this is not applicable to branches).
Yes. Even if your company is inactive or has no income, you must file a corporate income tax return and prepare financial statements every year.
Yes. The only issue is that the user interface is only available in Czech so it might be difficult for a non-Czech-speaking person to navigate the Data Box. In addition, access credentials are not delivered to certain countries where personal delivery (“do vlastních rukou” / hand-to-hand delivery) is not available.
Not always. Audit obligations depend on the company’s size, not legal form alone. Some small joint-stock companies are exempt, while large s.r.o. may be subject to audit.
You risk fines and possible initiation of company dissolution by the court. Banks and counterparties may also flag your company as non-compliant.
No. A branch is not a legal person and cannot hold or distribute profit independently. Profits belong to the foreign parent company and are reflected in its accounts.
Yes, if the shareholder controls the company and is part of a wider group. The Report is mandatory even if there are no transactions, provided the control exists.
Yes, with a shareholder approval and proper registration. Be aware that changes may affect tax deadlines and reporting.
If the company has no employees, you are exempt from labour-related registrations (e.g. health insurance, social security). However, all corporate and tax duties remain.
To help companies that are either new or well-established on the Czech market, we have developed a wide range of services, covering go-to-market research, tailored incorporation, administrative support for the business launch or complex compliance services, followed by a full package of accounting, tax, payroll outsourcing and consultancy. Discover our full service portfolio for the Czech Republic!
About Accace
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About Accace Circle
Accace operates internationally as Accace Circle, a co-created business community of like-minded BPO providers and advisors who deliver outstanding services with elevated customer experience and erase the borders of service delivery. Covering over 60 jurisdictions with more than 7,000 professionals, we support over 80,000 customers, mostly mid-size and international Fortune 500 companies from various sectors, and process at least 800,000 pay slips globally.
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