Czech Foreigners-owned LLC Comapny Formation Procedures

CZ-R-010
Check the uniqueness of the company’s name

Agency : Ministry of Justice

Business founders can verify the uniqueness of their company’s name using a database on the Ministry of Justice’s website (www.justice.cz). Name reservation is also possible through pre-registration of a company at the Commercial Registry against a fee of CZK 1,000, but this option is rarely used in practice.

0.5 day (less than one day – online procedure)
Government fee: No cost

CZ-R-020
Notarize Articles of Association and Lease Agreement

Agency : Notary

The notary prepares the articles of association according to the founders’ requirements, and the notary is responsible for the compliance of the contents of the company’s articles of association with Czech law.

Certain notaries require the following documents before executing the articles of association:
• An affidavit from the company managers;
• Building lease agreement, or ownership extract from the Real Estate Register, for the premises of the company’s headquarters.

For the articles of association of a simple limited liability company, the cost of notarization is CZK 2,000.

For the articles of association of a classic limited liability company, total notarization fee is assessed by percentage cost of start-up capital, as set out by the decree no. 432/2013 Coll. For the initial 100,000 CZK in start-up capital, the notary fee is 2% or 2000 CZK; for the subsequent capital up to 500,000 CZK the notary fee is 1.2% (or 4,800 CZK at full amount); for the subsequent capital up to 1,000,000 CZK the notary fee is 0.6% (or 3,000 CZK at full amount); for the subsequent capital up to 3,000,000 CZK the notary fee is 0.3% (or 6,000 CZK at full amount); and for the subsequent capital up to 20,000,000 CZK the notary fee is 0.2% (or 895 CZK at full amount).

In addition, if each founder wants their own original copy, then the cost is CZK 100 per page. Alternatively, instead of original copy a founder can ask for a certified copy and the cost would be 30 CZK per page. These costs are optional, and up to each founder to incur.

The company must also certify its building lease agreement with a public notary. The cost to certify the lease agreement with a notary is CKZ 30 +21% VAT.

1 day
Government fee: CZK 2,030 (CZK 2,000 for articles of association of a simple company + CZK 30 for lease agreement)

CZ-R-030
Obtain confirmation of the administrator of the capital contribution of the company, along with the confirmation of the bank that the capital contribution is held in the company’s special bank account

Agency : Bank

Until the company is registered, the paid-in capital is typically blocked in the special bank account. Opening a special bank account can costs as much as CZK 5,000, though most banks open special accounts for free on the condition that the company will continue to bank with them after the incorporation. Banks typically require notarized articles of association to open a corporate bank account.

2 days
Government fee: No cost

Cz-R-040
Register with the Trade Licensing Office and obtain extract of the trade license

Agency : Trade Licensing Office

The company must register its business activities with the Trade License Office to obtain an extract of its trade license. The required documents are as follows:

• Application for registration;
• Memorandum of association if the company has been founded but not yet established (i.e. registered with the Commercial Register);
• Proof of legal use of premises (i.e. a notarized copy of the premises lease agreement);
• Proof of payment of the administrative fee.

The application form may be accessed online at: http://www.rzp.cz/elpod.html

The Trade License Office must complete the registration process within 5 working days from the day when all required documents were submitted, and typically does so in 1-3 days. After the completion of the registration process, the Trade License Office issues the excerpt of the trade license register which is either picked-up personally by the applicant at the Trade License Office, delivered by post mail, or delivered electronically.
2 days
Government fee: CZK 1,000

CZ-R-050
Register in the Commercial Registry of the Regional Court through a notary

Agency : Regional Court, Commercial Registry

To register a new company in the Commercial Register, an application must be submitted to the relevant court administering the register. This can be done in person or through a notary.

The cost of notary services for simplified registration of a limited liability company (s.r.o.) is CZK 1,300.

Registering the business in person is more costly and takes more time. The registration has a cost of CZK 6,000 paid in the form of stamps. The time limit for the court to decide on registration is 5 business days, which stretches to 7 calendar days in the event application is filed after Monday. This application must be completed on a standard form (accessed at: http://www.rzp.cz/elpod.html http://epodatelna.justice.cz/ePodatelna/epo1200new/technicke_parametry.jsp) and signed by all first directors of the company (or their proxy, if applicable) before a notary.

The required documents are as follows:
• application form;
• notarized articles of association;
• notarized lease of the premises in which company headquarters are located;
• a confirmation from the administrator of the contributions into the company’s registered capital confirming that each founder paid up at least 30% of his or her monetary capital contribution and that the total paid up capital contribution is at least CZK 1;
• a confirmation from the relevant bank that the capital contributions are held in the company’s special bank account for the registered capital;
• biographic data on the company managers/executive.

Upon company registration, the Commercial Register notifies the Ministry of Interior regarding new company formation triggering automatic set up of an electronic data box pursuant to 1 July 2009 Act No. 300/2008 Coll., “On electronic transactions and authorized conversion of documents.” The Act requires all public and private entities to use an electronic data box for encrypted exchange of official documents and information. Pursuant to the Law, the data box for a legal entity (including a limited liability company) registered in the Commercial Register is established automatically and free of charge by the Ministry of Interior, after it receives the information from the relevant registration authority.

1 day
Government fee: CZK 1,300 (for simplified registration: CZK 1,000 notarial deed + CZK 300 notary fee)

CZ-R-060
Register for income tax and VAT

Agency : Tax Authority

Companies can apply for VAT registration jointly with income tax registration. Pursuant to the amendment to Section 72 (4) of the Tax Code, starting January 1, 2015 companies are required to submit tax registration and tax returns (for income tax and VAT) via the electronic data box. The tax form is accessible online at: http://www.daneelektronicky.cz.

The deadline for income tax registration is 15 days from the company incorporation. Other deadlines are as follows:
• Withholding tax and payroll tax registration: 8 days;
• VAT obligatory registration: 15 days following the end of month in which the conditions are met, or in certain cases, within 15 days following the date when the company automatically becomes a VAT payer. In accordance with Section 6(1) of Act No. 235/2004, on Value Added Tax, a company must register to pay VAT exceeds it its turnover exceeds CZK 1,000,000 over the last 12 months;
• VAT voluntary registration: submit the registration at any time.

For VAT registration, the tax authority performs various checks such as: execution or plans for taxable economic activity, financial, human and other resources available for economic activity, financials and book keeping, physical seat of the company, bank statements, etc. Registration takes on average 14 to 30 days. In some cases, the tax authority initiates a registration hearing in which case the time limit is further extended.

Upon registration, the company receives a tax identification number (same number for VAT and income tax).
14 days (2 – 3 weeks)
Government fee: No cost

CZ-R-070
Register for social security

Agency : Social Security Administration

The company must register with social security within 8 days of the date when the first employee starts work. Application for the Register of Employers may be submitted either online through a data box or in person. After the registration is complete, most documents which are required by the Social Security Administration may be submitted online through a data box or a different online platform. The application form is available on the following website: http://www.cssz.cz/cz/tiskopisy/nemocenske-pojisteni.htm.

1 day
Government fee:No cost

CZ-R-080
Register for health insurance

Agency : Health insurance companies

The company must register for health insurance within 8 days of the date when the first employee starts work. It is possible to do so online, although each health insurance company has its own website. Applications can be submitted through the data box, or in person.
1 day No cost

The above contents are digested from below linking page:

https://subnational.doingbusiness.org/en/data/exploreeconomies/eu-croatia-czechrepublic-portugal-slovakia/sub/plzen-czech-republic#DB_sb