Cost To Start A Business In The Czech Republic
The Czech Republic, which is situated in the middle of Europe, has a strong infrastructural facility, a thriving labor market, and a strong economy. Because of all these factors, many entrepreneurs find the Czech Republic to be appealing. Consequently, a number of entrepreneurs open businesses in the Czech Republic each year.
However, when opening a business, entrepreneurs often have to consider the cost to start a business in the Czech Republic. The cost for starting a business in Czech Republic as a foreigner consists of various factors like registration costs, business bank account charges, license costs, etc.
Every company needs to register with the Commercial Register or the registration court, which requires a deposit of CZK 6,000. The cost to register joint stock firms with the Register Court is roughly CZK 12,000.
This article will briefly discuss the cost for starting a business in Czech Republic as a foreigner. Additionally, it will outline the variables that impact the cost to start a business in the Czech Republic.
Factors that influence the cost to start a business in the Czech Republic
While setting up a business, an entrepreneur must consider the various elements that influence the cost to start a business in the Czech Republic. The cost for starting a business in Czech Republic as a foreigner depends on the expenses associated with incorporation, virtual office operations, obtaining licenses, purchasing company seals, etc.
Here are the various factors that influence the cost for starting a business in Czech Republic as a foreigner:
- Corporation registration expense
- The cost associated with registering the business name
- The expense for the location of the registered office
- Cost of creating a business bank account
- Depositing the required amount of share capital
- Obtaining licenses and permits needed to operate a business
- Registering with the tax authorities
- Accounting expenses
- Additional government registration costs
The company registration cost to start a business in the Czech Republic
Every company in the Czech Republic needs to be listed in the Commercial Register. Situations affecting the Commercial Register are decided by the registration court, which is frequently the regional court at the jurisdiction of the business body or the location of activity of an individual requesting admission in the Commercial Register.
The entrepreneur must submit an application for entrance into the Commercial Register in order to establish a company. Court fees must be paid in order to submit an application for registration with the Commercial Register.
Companies that incorporate for the first time in the Czech Republic are subject to these fees. If you enroll as a firm that has not yet been registered in the Commercial Register, the registration cost for starting a business in Czech Republic as a foreigner is CZK 6,000. However, a joint stock company has to pay a registration cost of CZK 12,000 and it must be registered in accordance with the Czech Commercial Code.
Notary cost for starting a business in Czech Republic as a foreigner
A notary may establish organizations with the Commercial Register.
For registration in a public register, the notary imposes the following costs:
- First-time registration of a joint-stock corporation costs CZK 8,000, but the register court charges CZK 12,000 for such registration.
- A notary costs CZK 2,700 for the first time an organization is entered into a public register, with the exception of a joint stock corporation or association. However, for the same, the register court charges CZK 6,000.
- A notary costs 1,000 CZK for modifications or upgrades. For the same, the registered court costs around CZK 2,000.
Cost of registering with the tax authorities
If you conduct transactions in the Czech Republic, you must pay taxes in compliance with the country’s current tax regulations. As such, you must register with the tax authorities to pay the corporate income tax and the value-added tax.
You are required to submit a request for settlement of corporate income tax within fifteen days of the firm’s entry into the Commercial Register. Irrespective of whether a business will generate revenue or not, this requirement nevertheless pertains to all of them.
In the Czech Republic, you can anticipate paying taxes such the corporate income tax, value-added tax, road tax, etc.
A VAT payer is a tax resident with a business address in the Czech Republic whose annual revenue surpasses CZK 1,000,000 over a period of 12 straight calendar months, except for taxable individuals who provide services that are exempt from VAT but do not have the authority to deduct VAT.
Property lease agreement cost to start a business in the Czech Republic
Before beginning operations as a new company, the property rental agreement must be approved. There is a public notary fee of CZK 30 + 21% VAT associated with this. When a corporation registers in the Czech Republic, a notarized document of the property’s rental agreement is also required.
Cost to register with the Trade License Office
The expense of registering with the Trade License Office is one of the factors included in the cost to start a business in the Czech Republic.
The following paperwork is required to obtain a trade license:
- The Register’s excerpt and the legal document of the firm.
- The contract for renting the office space
- The administration fee payment receipt
Investors should be aware that a charge must also be paid for the license to be issued. This is required when enrolling with the Trade License Authority, and the amount required is CZK 1,000.
Required share capital cost to start a business in the Czech Republic
- Every corporation that is established in the Czech Republic has to deposit a minimum amount of share capital in the bank account of the firm.
- If you wish to incorporate a limited liability corporation in the Czech Republic, the minimal capital share necessary is CZK1.
- Similarly, the minimum capital requirement for a Czech joint-stock corporation is CZK 2,000,000.
- However, there is no requirement for registered capital to register a branch office corporation in the Czech Republic.
Conclusion
There are various requirements that must be met by an entrepreneur if they wish to register a company in the Czech Republic. One of those requirements is the cost to start a business in the Czech Republic. There is always a price associated with incorporating a business. Depending on the registration documentation required as well as the legal organization an entrepreneur chooses, these fees may change.
The above article discusses the cost for starting a business in Czech Republic as a foreigner. If you want to establish a business in the Czech Republic, you must be aware of the various costs associated with the incorporation process.
For further queries regarding the cost to start a business in the Czech Republic, you can consult our experts at Odint Consultancy. Our experts will be happy to solve your queries.
FAQ’s
If you wish to incorporate a limited liability corporation in the Czech Republic, the minimal capital share necessary is CZK1. Similarly, the minimum capital requirement for a Czech joint-stock corporation is CZK 2,000,000. However, there is no requirement for registered capital to register a branch office corporation in the Czech Republic.
Investors should be informed that there is a fee associated with obtaining a license. The sum needed is CZK 1,000, and it is necessary when enrolling with the Trade License Authority.
Here are the various factors that influence the cost for starting a business in Czech Republic as a foreigner:
- Corporation registration expense
- The cost associated with registering the business name
- The expense for the location of the registered office
- Cost of creating a business bank account
- Depositing the required amount of share capital
- Obtaining licenses and permits needed to operate a business
- Registering with the tax authorities
- Accounting expenses
- Additional government registration costs
The Czech Republic, which is situated in the middle of Europe, has a strong infrastructural facility, a thriving labor market, and a strong economy. Additionally, the country is a desirable location for businesses to grow into emerging marketplaces as a result of its proximity to other regions.
If you enroll as a firm that has not yet been registered in the Commercial Register, the registration cost for starting a business in Czech Republic as a foreigner is CZK 6,000. However, a joint stock company has to pay a registration cost of CZK 12,000
The following fees are assessed by the notary for registration in a public register:
- First-time registration of a joint-stock corporation costs CZK 8,000.
A notary costs CZK 2,700 for the first time an organization is entered into a public register, with the exception of a joint stock corporation or association.
A notary costs 1,000 CZK for modifications or upgrades of firms.
