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Czech Republic

Branches

Updated 07/2012

Legal requirements

Foreign nationals do business in the Czech Republic under the same conditions and within the same scope as Czech entrepreneurs.

The opening of branches is governed by the rules set out in the Commercial Code, the Trade Licensing Act and the Act on International Private and Procedural Law.

Types of branch

The secondary right of establishment includes the right to set up the following in another Member State:

  • agencies and branches (without legal personality);
  • subsidiaries.

Branch without legal personality

Branches (organisational units) are legally dependent entities, i.e. they do not have legal personality, although it can be said that they have a certain "local" independence, a seemingly independent management and their own accounts.

An organisational unit (a branch), as a standard legal entity, enables a foreign company (the founder) to do business in the Czech Republic without having to establish a new company. It has the same rights and obligations as any Czech legal person, except for of a simpler form of establishment / dissolution and more advantageous tax arrangements.

An organisational unit of a company owned by a foreign person is an operationally independent, separate part of the company, which is locally distinct from the foreign legal person.

Legally independent branches

A subsidiary is an independent legal entity that is in some way regularly managed by the (foreign) parent company.

A subsidiary of a foreign parent company is, from a national law perspective, a company belonging to the state in which the subsidiary has its head office, which is subject to local laws regulating establishment and entry in the relevant Commercial Register.

Standard obligations

The following website provides a list of the main obligations of an entrepreneur.

Many of the requirements and procedures for opening a secondary establishment are the same as for starting up a business.

Administrative procedures

Preliminary procedures

The procedure when setting up an organisational unit is as follows:

  • the founder (company) decides to set up the organisational unit,
  • an application is lodged with the relevant local trade licensing office,
  • an application is submitted for entry in the Commercial Register.

The organisational unit is entered in the Czech Commercial Register and has a Czech identification number.

The organisational unit is created through the decision of the founder (company) and as part of a foreign company it does not have a deed of establishment, does not pay up basic capital and does not appoint an agent.

The name of the organisational unit is the same as the name of the foreign company, with the suffix "Organisational Unit".

Notifying a trade

Information is available on the following websites regarding notifications of free, restricted and skilled trades and applications for concessions in respect of legal persons:

Application for entry in the Commercial Register

Applications for entry in the Commercial Register may be submitted only on the mandatory form, and must include an officially verified signature. These mandatory forms are available on the website of the Ministry of Justice of the Czech Republic with instructions on how to fill them in.

The time period for submitting an application for entry in the Commercial Register is no later than 90 days from the date of receiving confirmation of fulfilment of the conditions for operating a trade (an excerpt from the Trade Register).

Employment issues in the Czech Republic from the perspective of a foreigner

Useful information, procedures and forms relating to employment issues for foreigners in the Czech Republic are available on the Integrated Portal of the Ministry of Labour and Social Affairs.

Other procedures, conditions and requirements

in most cases are the same as the general conditions for doing business and setting up businesses.

Registration

The main obligations connected with registering a business in the Czech Republic are available on the following website:

Many of the requirements and procedures for opening a branch are the same as for starting up a business.

Further information is available on the following website:

Resources

The following governmental and non-governmental institutions and web portals offer further information and useful services related to opening a branch or setting up a business.

Help & advice

Help & advice

Assistance in setting up a company is available from the Czech Chamber of Commerce.

CzechTrade offers assistance through its offices abroad.

SOLVIT helps businesses deal with problems that arise when national authorities wrongly apply EU market rules.

If you wish to establish a business or perform temporary cross-border services in the EU/EEA area (the 27 EU member states, plus Iceland, Liechtenstein and Norway), turn to the ‘Points of Single Contact (PSC)’ - Members of the EUGO network - that will help you to complete all necessary administrative procedures on-line! Get the information you need and submit your applications to the responsible authorities online. You no longer have to worry about contacting several different authorities one by one - the PSC will do it for you!

E-mail a business organisation near you

The EU runs a network (Enterprise Europe Network) of local business organisations in most European countries that may be able to help you.

Choose your country and town and enter your enquiry below.

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