Expand Business in Czech Republic

Global Upside helps businesses expand into Czech Republic by providing talent acquisition, human resources, accounting, payroll, tax, incorporation, and professional employer organization (PEO)/employer of record (EOR) services. Our comprehensive offerings create an end-to-end solution that helps you establish your business and optimize your operations, all while maintaining compliance with laws and regulations of Czech Republic.

The hiring and incorporation processes in Czech Republic are often complex, time-consuming, and involve numerous legal and compliance challenges. Global Upside simplifies these processes and lifts the compliance burden from your business. Our teams have the experience and expertise required to help you establish a legal entity in Czech Republic. We also offer PEO/EOR solutions to companies interested in hiring employees quickly, without setting up a legal entity in the country.

Capital City

Prague

Currency

Czech Koruna (Kč)

Language

Czech

Government

Parliamentary Republic

Country Overview

Located in central Europe, the Czech Republic has a booming market economy that claims one of the highest GDP growth rates and lowest unemployment levels in the European Union. The nation has been renamed Czechia in 2016.

  • The Czech Republic ranks as the 47th largest economy in the world in terms of nominal GDP.
  • The Czech Republic ranks as the 18th largest economy in Europe.
  • The Czech Republic is one of the leading exporters of vehicles.
  • The Czech Republic ranks as the world’s 29th best country for business.

Legal Entity Setup

Options for setting up a legal entity in Czech Republic include:

Unlimited Partnership (veřejná obchodní společnost/ v.o.s.)

An unlimited partnership (veřejná obchodní společnost/ v.o.s.) is a form of establishment which requires a minimum of 2 investors who are liable for all the company’s debts to the full extent of their investments.

Limited Partnership (komanditní společnost/ k.s.)

A limited partnership (komanditní společnost/ k.s.) is a form of an entity set up that requires one or more investors that are liable for the debts of the organization to the full extent of their investments (unlimited partners), and one or more partners that are liable for the debts of the organization up to the amount of their unpaid capital investments (limited partners).

Limited Liability Company (společnost s ručením omezeným/ s.r.o.)

A limited liability company (společnost s ručením omezeným/ s.r.o.) is a separate and individual form of legal entity setup that needs one or more managing directors. The directors are in authority for making foremost business decisions and supervision of the general affairs of the company as well as the day-to-day management of a stock corporation. This is the most common form of a legal entity set up in the Czech Republic.

Joint Stock Company (akciová společnost/ a.s.)

A joint stock company (akciová společnost/ a.s.) is a separate and individual form of legal entity setup with a governance system that is:

  1. two-tier with a supervisory board (dozorčí rada) and a board of directors (představenstvo)
  2. single-tier with an administrative board (správní rada) and a statutory director (statutární ředitel).

It takes approximately 4 to 6 weeks to establish a legal entity set up in the Czech Republic.

Human Resources

The primary sources of employment law in the Czech Republic are:

  • The Labor Code Act No. 262/2006 Sb.
  • The Employment Decree Act No. 435/2004 Sb.

The terms that need to be stipulated in the employment contract are:

  • Details of the nature of work
  • Job location
  • Date of commencement
  • Holiday entitlements
  • Working hours
  • Salary details and payroll frequency
  • Notice period

Payroll

The payroll frequency, in the Czech Republic, is monthly.

Accounting

In the Czech Republic, the Ministry of Finance determines the accounting rules that are based upon the National Accounting Standards (NAS). The accounting rules are in compliance with IFRS and IAS.

Tax & Compliance

Corporate Tax

The corporate tax rate here is 19%.

Value Added Tax (VAT)

The VAT rate here is 21%. There are reduced rates of 15% and 10% on certain supplies.

Data Privacy

On the 24th April 2019, the new Czech Act No. 110/2019 Coll. on Personal Data Processing came into effect. It is the Czech GDPR implementation law that has replaced the previous Personal Data Protection Law Act No. 101/2000, Coll. The new law governs personal data processing within the scope of Regulation (EU) 2016/679.

Anti-Bribery & Anti-Corruption Law

In the Czech Republic, bribery of public officials is governed under the Czech Criminal Code, Article 331, et seq. Bribery of private officials is regulated under the Czech Criminal Code as well as the Czech Civil Code.

1. Bribery of Public Officials:

For Individuals:
i) Imprisonment for up to 12 years
ii) Monetary penalty
iii) Confiscation of property
iv) Termination of commercial activities

For Businesses:
i) Discontinuation of the establishment
ii) Confiscation of property
iii) Monetary penalty
iv) Termination of commercial activities
v) Publication of the assessment

2. Bribery of Private Officials

For Individuals: Under Criminal Code:
i) Imprisonment for up to 12 years
ii) Monetary penalty
iii) Confiscation of property
iv) Termination of commercial activities

For Businesses:
i) Discontinuation of the establishment
ii) Confiscation of property
iii) Monetary penalty
iv) Termination of commercial activities
v) Publication of the assessment

3. Bribery of Private Officials

Under the Civil Code:
A person whose rights have been breached or threatened via private bribery may necessitate the felonious party to:
i) Rectify the consequences
ii) Refrain from such doings