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The Czech Republic is located in the heart of Europe, neighboring Germany to the west, Poland to the north, Slovakia to the east, and Austria to the south.

A limited-liability company is an entity whose registered capital is made up of contributions agreed in advance by its shareholders and registered in the Commercial Register. The guarantee of each shareholder for the debts of the company is joint and several and is limited towards a single creditor to the unpaid amount of the registered capital of the company as registered in the Commercial Register. Consequently, shareholders of the limited-liability company are not liable for the company’s debts provided they have paid up their contributions in full and such payment of the contributions has been properly registered in the Commercial Register

Formation. A limited-liability company is founded by preparing an Establishment Memorandum or Memorandum of Association (if the company is to have more than one shareholder).

Board of Directors. The business and affairs of the company are managed by a Board of Directors that consists of one or more persons who may be individuals or companies. There are no nationality limitations

 

Registered Office and Agent. All newly established legal entities, including branches of foreign entities, must register with the tax authorities within 30 days of registration in the Commercial Register. Foreign entities establishing a permanent establishment (for which commercial registration in Czech Republic is not required) must also register with the Tax Office of Czech Republic for tax purposes. A Company must appoint a Registered Agent and a Registered Office within the country. It may amend its Memorandum to change its Registered Office or its Registered Agent on the discretion.

 

Disclosure. Commercial Registry provides all the information regarding companies, including  directors, secretary, registered office and shareholders, its names, home addresses and nationalities. Anonymity can be saved by using nominees.

 

Bearer Shares.  Bearer shares are NOT allowed in this jurisdiction. Private company limited by shares

 

Taxation. A 15% withholding tax is levied on dividends and interest. A 25% withholding tax is levied on director’s fees and management or consultancy agreements, provided that a Czech permanent establishment has not been created and the income is not subject to the 10% tax securement. For payments made under a financial lease, the withholding tax rate is reduced to 1%. The corporation tax rate is 26%.

 

Books, Records and Common Seal. A Company must have a corporate seal, which may be kept outside or within the territory of Czech Republic. Seals must be used if the company enters into a contract which, if entered between natural persons, would be required by law to be in writing and under seal. A Company shall keep such accounts and records, as the directors consider necessary or adequate.

 

Powers of Attorney. A Company may grant general or special Powers-of-Attorney to any person, to act on its behalf and to execute contracts, agreements, deeds and other instruments. These powers are not recorded in the Public Registry.

 

Amendments. The Memorandum and Articles of Association may be amended by either a resolution of directors or of shareholders and the amendment filed with the Registry of Companies.

 

Certificates of Good Standing. Good Standing Certificates for a Company, can be obtained upon application to the Registrar of Companies.