Czech Republic Info
Joined: 20 Apr 2007
Posts: 16
Home Country: czechrepublic
|
 Posted: Fri May 18, 2007 7:56 am Post subject: DOING BUSINESS IN CZECH REP / CZECH REP BUSINESS GUIDE |
 |
|
DOING BUSINESS IN CZECH REPUBLIC
STARTING A BUSINESS
STANDARDIZED COMPANY
Legal Form: Spolecnost s Rucenim Omezenym (SRO)
Minimum Capital Requirement: 200,000
City: Prague
Registration Requirements:
Procedure 1. Check business name for uniqueness
Time to complete: 1 day
Cost to complete: no charge
Procedure 2. tain certificates of clear criminal record for managers
Time to complete: 1 day (immediately)
Cost to complete: CZK 50
Comment: This applies only to the extract from the Czech Criminal Register and not foreign criminal registers (which are also required should the executive be a foreign person)
Procedure 3. Obtain extract of real estate register proving title of the landlord
Time to complete: 1 day
Cost to complete: CZK 100
Comment: Company must prove lease of premises by a contract with landlord and by extract of real estate register proving the title of the landlord. Extract of real estate register is issued on spot. Fees for extract are CZK100. It is also recommended to obtain approval from the owner of the premises, relevant to the location of the seat of the company on his premises. If the landlord is a legal entity it is recommended to submit its extract from the Commercial Register.
Procedure 4. Notarise Articles of Association
Time to complete: 1 day
Cost to complete: CZK 18,000 including VAT (for 5 copies of 5-page notarial record and 2-page enclosure) + CZK 31.5 per notarised signature
Comment: Costs depend upon the amount of the capital of the company and the number of copies of notarial record required by the client. The minimum fee can be CZK 4,000 and the maximum approximately CZK 116,000, all including 19% of VAT. The notary public is responsible for the compliance of the contents of the Articles of Association with Czech law. He prepares the wording of the Articles in accordance with the client's requirements. Certain notaries public require the following documents prior to the execution of the Articles of Association: clean criminal record, affidavit of the Managers, and confirmation of the owner of premises where the seat will be located that the company is entitled to have its seat in those premises, along with an extract from the Real Estate Register for the premises.
Managers must comply with the requirements stipulated by the Czech Commercial Code. They must confirm compliance in the affidavit submitted to the City Court and they also must submit their Specimen Signature to the City Court in 2 counterparts.
Procedure 5. 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 for the registered capital.
Time to complete: 2 days
Cost to complete: The bank charges are usually deducted from the bank account once the company is registered in the Commercial Register. Until the company is registered, the registered capital is usually blocked in the special bank account.
Procedure 6. Obtain the appropriate trade licences
Time to complete: 1 day
Cost to complete: CZK 1,000 per trade licence or CZK 2,000 per concession
Comment: A company must have the appropriate trade licences to conduct its business. Before obtaining a trade licence, a company may be asked to provide professional and other qualifications specific to the trade, as well as practical experience, depending on the type of trade licence. For general commercial activity, a notification is suffice.
Procedure 7. Register in the Business (Commercial) Registry of the Regional Commercial Court.
Time to complete: 14 days
Cost to complete: CZK 5,000 (paid in the form of court stamps)
Comment: The Czech Commercial Code and the Czech Civil Procedure Act were amended to comply with EC law with legal effect since July 1, 2005, in order to simplify and speed up the process of registrations to the Commercial Register. The amendment introduced standard forms for applications, reduced number of participants to the proceedings, introduced the simplified procedure for registration by entering the data without substantive review for certain types of entries, stated exact periods for decisions and its issuance and entries, introduced "Silence-is-consent" rule and set limits for implementation of full electronic administration of the Commercial Register.
For registration of the company to the Commercial Register, the motion to the relevant Regional Court must be submitted on a standard form signed by all first Managers (or their Proxy if applicable) in front of a notary public. For the filing of the trade licence, proof of "fully paid capital" is required, i.e. 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 for the registered capital, the Articles of Association in the form of a notarial record in 2 counterparts, the extract from the commercial register for the founder (if applicable), documents proving the title to the premises where the seat is located (as stated above), documents from the Managers (Affidavit and Specimen Signature in 2 counterparts, extract from the Czech Criminal Register, if the Manager is a foreigner - extract from the Criminal Register from country of his origin and country where he spent 3 consecutive months in 3 previous years and a Czech visa for over 90 days - code VC 65, if a foreigner is EU citizen the temporary residency permit is required instead of a visa since May 1, 2004).
Procedure 8. Register with the tax office.
Time to complete: 1 day
Cost to complete: no charge
Comment:
*Income tax and general registration deadline - 30 days (any change needs to be announced within 15 days).
* Withholding tax and payroll tax - 15 days.
Income tax registration is immediate. The company gets the number when they hand in the application. It is the same number for income and VAT.
* VAT obligatory registration - 20th day after the end of month in which all conditions are met
* VAT voluntary registration - any time
* Foreign taxpayers not having permanent establishment or real estate in the Czech Republic - 5 days
Procedure 9*. Register for social security.
Time to complete: 1 day
Cost to complete: no charge
Procedure 10*. Register with the health insurance.
Time to complete: 2 day
Cost to complete: no charge
Note: Procedures sometimes take place simultaneously. Instances of this are marked with an asterisk (*).
FORMS OF BUSINESS ORGANISATION
1. Joint stock company
2. Limited liability company
The joint stock (akciova spolecnost—AS) and limited liability (spolecnost s rucenim omezenym—s.r.o.) options are the most popular forms of corporate organisation for foreign investors because of their flexibility and low capital requirements.
Czech law permits foreign companies to set up branches or representative offices.
Prague, the capital, is the financial centre.
TAXATION
Corporate tax
Standard rate: 24%
Resident companies are taxed on their worldwide income; non-resident companies are taxed only on Czech-source income. A company is resident if its legal seat or place of management is in the Czech Republic. Corporate tax is charged at a flat rate of 24%. Generally, dividends are not included in taxable income but are subject to a final withholding tax of 15%. Dividends are exempt from the tax if conditions for application of the EC Parent-Subsidiary EU Directive are met. Partnerships are treated as fiscally transparent, with the partners taxed on their shares of partnership profits.
Individual tax
Progressive rates rising to 32%
Resident individuals are taxed on their worldwide income. An individual who has a permanent home in the country or stays there for 183 days in the calendar year is resident for tax purposes. Most income is aggregated and charged to tax at progressive rates up to 32%. Dividends are subject to a final withholding tax of 15%.
Capital gains
Generally taxed as income
Capital gains of companies and individuals are generally taxed as income. Individuals are exempt from tax on gains on the disposal of non-business property held for five years or the sale of a dwelling that has been the main residence for at least two years. Capital gains derived from the sale of shares are tax-exempt for individuals if the shares have been held for more than six months in the case of a joint stock company and five years in the case of a limited liability company.
Indirect tax
Standard rate: 19% ; Lower rate: 5%
Value-added tax (VAT) applies to most transactions. A lower rate of 5% applies to foodstuffs, pharmaceutical products and some services. Exemptions include the transfer and lease of land and buildings, financial and insurance services, medical services and education. Exports are zero-rated.
Registration is compulsory for businesses with an annual turnover above CZK 1m.
Tax administration and compliance
Tax year: Corporations: accounting year ; Individuals: calendar year
Corporate taxpayers make either two or four advance tax payments, depending on the size of the previous year’s liability. A self-assessment tax return must be filed by the end of the third month following the tax year, but the deadline may be extended on request.
Employment income is generally taxed by withholding.
Additional tax information
Withholding taxes: Dividends 15%, Interest 15%, Royalties 25%. Rates may be reduced by tax treaties or EC directives.
Tax treaties: The Czech Republic has concluded more than 70 treaties, and also honours most treaties of the former Czechoslovakia.
Dividends: Dividends are subject to a 15% withholding tax.
Revenue protection: There is transfer-pricing and thin-capitalisation legislation.
Groups: There is no provision for groups to file a consolidated return.
Incentives: Incentives are available for large-scale investment.
Other taxes: Inheritance and gift tax, Real estate tax, Road tax, Tax on the transfer of immovable property. |
|
Register
Log in
FAQ
Search
Memberlist
