Running a business

Czech law brings the same business conditions for Czech residents and foreigners, and it is a fairly simple process. There are many ways to do business in the Czech Republic, but in principle there is a basic division into doing business either as a legal entity or as a natural person.

You can either establish Limited liability company (s.r.o.), Joint-stock company (a.s.), General commercial partnership (v.o.s.) or Limited partnership (k.s.) as one of the possible legal forms of business or run a business as a sole trader (OSVČ).

The following steps are generally required when establishing a company:

  1. Choosing a company name and type
  2. Drawing up the partnership agreement
  3. Composition of basic deposits
  4. Obtaining a Trade Licence
  5. Registration in the Commercial Register
  6. Getting a Tax Identification Number

Then you need to get familiar with the tax system. The basic taxes include:

  • Corporate tax: 19%
  • VAT: the standard VAT rate is 21%, however some products may be taxed at the reduced rate of 15% (mostly foodstuffs) or 10% (infant nutrition, medicine, books)
  • Road Tax: applicable only if you plan to use a motor vehicle in your business, road tax rates are variable, but fall between CZK 1000-5000 annually

A list of all taxes is available here and summary information on doing business in the Czech Republic can be found at BusinessInfo.cz. Here you can also find information regarding insurance, accounting and financial reporting, funding programmes and much more.