How to Start a Company in the Czech Republic: Step-by-Step Guide

The Czech Republic is a central European business hub with a strong industrial base, strategic location, and stable economy. Its membership in the EU provides access to the European single market, making it an attractive choice for entrepreneurs and foreign investors.

Why Start a Business in the Czech Republic?

EU membership – Access to 27 EU markets.
Strategic location – Central Europe, ideal for trade and logistics.
Skilled workforce – Highly educated, multilingual, and relatively affordable labor.
Low corporate tax – 19% standard corporate tax rate.
Business-friendly environment – Simplified procedures for incorporation and EU-standard legal framework.
Attractive incentives – Grants and subsidies for R&D, technology, and manufacturing sectors.

Step 1: Choose a Business Structure

Common types of companies in the Czech Republic include:

Limited Liability Company (s.r.o.) – Most common for small and medium-sized businesses.
Joint-stock Company (a.s.) – Suitable for larger businesses seeking investors.
Sole Proprietorship (Živnostník) – Simple for small businesses, but owner is fully liable.
Branch of a foreign company – For businesses established abroad but operating locally.

Most entrepreneurs choose an s.r.o. for liability protection and flexible management.

Step 2: Reserve a Company Name

The name must be unique and approved by the Czech Commercial Register.
Avoid misleading or duplicate names.

Step 3: Prepare Required Documents

Documents typically include:

Articles of Association (for s.r.o.) or Memorandum of Association
Proof of registered office in the Czech Republic
Identification of shareholders and directors
Bank statement confirming capital contribution (minimum CZK 1 for s.r.o., typically CZK 1,000 – 200,000 depending on company type)

Step 4: Open a Bank Account & Deposit Share Capital

For an s.r.o., open a corporate bank account and deposit the required capital.
The bank will issue a confirmation for registration purposes.

Step 5: Register the Company

Submit incorporation documents to the Czech Commercial Register.
Register for tax purposes with the Financial Office.
Register for VAT if annual turnover exceeds CZK 1 million (~€40,000).

Step 6: Obtain Licenses & Permits (If Required)

Certain sectors (finance, construction, health, transport) require additional permits or trade licenses.

Step 7: Set Up Accounting & Compliance

Czech law requires companies to maintain accurate accounting records and file annual financial statements.
Hire a local accountant or firm to ensure compliance with tax and reporting requirements.

Costs & Timeline

Incorporation fee: CZK 6,000 – 10,000 (€250–400).
Legal and notary services: CZK 10,000 – 20,000+ (~€400–800).
Timeline: 2–6 weeks for full registration.

Final Thoughts

The Czech Republic offers a strategic and cost-effective gateway to the EU market. With low corporate taxes, skilled labor, and EU regulatory compliance, it is ideal for SMEs and foreign investors.

Foreign entrepreneurs should work with a local lawyer or business advisor to navigate company registration, licensing, and tax obligations efficiently.