Start-ups - Czech Republic

Updated 10/2010

Legal requirements

In the Czech Republic the most important legal text dealing with companies' rights is the Commercial Code.

Commercial Code

Before starting a business you must obtain a business licence - either a trading licence or another type of business licence. The process and requirements for issuing a trading licence (for a trade) or concession document are set out in the Trade Licensing Act.

Trade Licensing Act - text and appendices

Legal forms of business

The legal form of a business specifies the form of business under which the entrepreneur will operate. In the Czech Republic people may engage in business in two ways - as a natural person or as a legal entity. The second part of the Commercial Code lays down the following legal forms of business: trading company or cooperative. The Trade Licensing Act regulates the businesses of persons operating on the basis of a trade.

The legal forms of business are as follows:

sole trader (belonging to one person);
joint-stock company;
limited liability company;
public company (with no obligation to generate registered capital);
limited partnership;
cooperative.
Legal forms of business

Setting up is the first phase in establishing a company, preceding its "formation". During this phase, you have to generate the registered capital (or at least some of it) by means of investments made by you and your partners.

The process of establishing a company

Business activities and related rules

Among business activities we include trades, which are regulated by the Trade Licensing Act and other business activities, which are regulated by the specific legislation.

Trades

The Trade Licensing Act identifies the following types of trade:

notifiable trades (these include skilled, restricted and unqualified trades);
concession trades.

The Trade Licensing Act sets out the general conditions for pursuing a trade that are common to all types of trade:

a minimum age of 18 years;
legal capacity;
good character.

It also sets out the specific terms and conditions for pursuing a trade:

evidence of completion of training or evidence of length of experience in the field in question, and the certificates and licenses required under the specific legislation on skilled, bound and concession trades.
Trades
Guide to the notification of trades
Licensed trading

Other business activities

Business activities that do not comprise trades include the pursuit of the so-called liberal professions, for example the activities of lawyers, doctors, vets, notaries, patent agents, tax advisors, experts, interpreters, stock market valuers, stockbrokers etc. These activities are regulated by specific laws.

Business plans and assessments

Information regarding business plans can be found on the following websites:

Business Plan 1
National Association for Business Development

To succeed, a new business needs a sound commercial strategy and secure financing.

Access to finance — Czech Republic

Some standard requirements to be completed when setting up a business are the same as when opening a branch.

Branches — Czech Republic

Administrative procedures

Single point of contact

In municipal trade licensing offices there are the so-called Central Registration Points (CRP). Here, when notifying a trade or submitting a request for a concession, you may also make notifications to other administrative bodies, for example the tax authority, social security authority, health insurance company or work office.

"Single points of contact" (SPC) have been established for businessmen at selected trade licensing offices. They provide information and assistance in relation to starting up a business in the Czech Republic or other Member States of the EU and the EEA. All the necessary information for obtaining a business license is provided on the online single point of contact.

Single points of contact (SPC) in the Czech Republic
Online single point of contact
Unified registration form for legal persons
Unified registration form for natural persons

Getting a business licence

If you want to get a business licence (trade licence or concession), you must submit a request to the Trade Licensing Office (or at a so-called Czech Point). These function as a contact point between business owners and the public administration.

Czech Point - public administration contact point

Registering a company

Business registration

The Trade Licensing Office will enter your application in the Trade Register within five days and provide you with confirmation of registration. This document will be appended to your trade licence or concession (concessions without confirmation documents are not valid).

Trade Register
Trade Register - electronic submissions

Trade licences may still not be considered valid at this stage, as you still have to register in the Commercial Register. Once this is done, companies and cooperatives become legal persons, with all the rights and obligations that this entails.

Entry in the Commercial Register

For proceedures relating to the Commercial Register the relevant court is the so-called Court of Registration, which is usually the Regional Court in the area where the head office of the legal person is located or the place of business of the natural person who is applying for registration in the Commercial Register. In Prague the relevant court is the Prague Municipal Court.

In most procedures the person in question must submit the application for entry in the Commercial Register. When submitting an application for entry in the Commercial Register an administrative fee is charged. The fee amounts to CZK 5,000 for a first-time entry, i.e. if you are requesting the registration of a company not previously registered.

Applications for entry in the Commercial Register and applications to amend existing registrations may be submitted only on the specific forms. Samples of these forms for all types of company may be found on the Ministry of Justice website.

Commercial Register - online access
Commercial Register - forms, addresses of Courts of Registration

Tax registration

Information on the submission of tax declarations may be found here:

Czech Tax Authority
Online tax declarations

Resources

Further information and useful services can be found here:

Chamber of Notaries of the Czech Republic
BusinessInfo.cz - official portal for business and export
Public Administration web portal
Czech Bar Association

Many business owners offer to sell companies that have been set up only in order to be sold on.

Companies online - selling companies
Establishing and selling companies - Smartcompanies.cz

Programmes

A number of programmes and subsidies are there to help you when you are setting up a new business.

Support programme for start-up entrepreneurs (START)

Check also the legislation on this topic in:

Start-ups - Czech Republic