Foreign legal entities are allowed to conduct trade activities, including acquisition of real estate, under the same conditions and to the same extent as Czech companies.

They may become founders or co-founders of a company, or may join an existing Czech company. Foreign companies may operate in Czechia, either by establishing a branch office registered in Czechia or by establishing a Czech company. There are four different legal forms of companies; the most common are limited liability companies (s.r.o.) and joint-stock companies (a.s.). The trade name of the company must be unique. You can find more information on setting up a business in Czechia in the attachments.

You can find more information on setting up a business in the Czech Republic in the attachments or on the CzechInvest portal. 

 

Visa 

Visa issues are another hot topic for foreign investors. The conditions applying to a foreign citizen's entry to Czechia and their residence in the country are governed by Act No. 326/1999 Coll., on Residence of Foreign Citizens in Czechia, as amended. For detailed, yet reader-friendly information on both short- and long-term visas and work permits for citizens of the EU as well as non-EU countries click here.

 

Taxes, VAT and other fees

If you establish a business in the Czech Republic, you can expect to pay two or three kinds of taxes:

1. Corporate tax- Currently 21%.

2. VAT- VAT is generally charged at 21% on supplies of goods and services within the Czech Republic.

Certain supplies (e.g. groceries excluding most of drinks, medicaments, drinking tap water, construction works related to social housing, hotel accommodation and admission to cultural, sport, theatre, or similar facilities, catering services, heat and cold) are taxed at a rate of 12% starting January 1, 2024.

There is no VAT on books in printed or electronic form starting January 1, 2024.

3. Road Tax- Applicable only if you plan to use a motor vehicle in your business. The range of tax rates from the tax base on the cubic volume of the engine ranges from CZK 1,200 to CZK 4,200 (passengers cars). The annual tax rate from the tax base on the sum of the largest permitted weights and the number of axles ranges from CZK 1,800 to CZK 33,100.

 

Here, you can find up-to-date information on taxation in the Czech Republic.