The Czech Republic is a stable and prosperous market economy closely integrated with the EU, especially since the country's EU accession in 2004. It boasts a developed infrastructure for enterprise and is also an attractive location for investment. The Czech Republic is one of the most successful CEE countries in terms of attracting foreign direct investment.
Foreign legal entities are allowed to conduct trade activities, including acquisition of real estate, under the same conditions and to the same extent as Czech entrepreneurs. They may operate in the Czech Republic, either by establishing a branch office registered in the Czech Republic or by establishing a Czech company. The main business entities are the joint stock company (a.s.) and the limited liability company (s.r.o.). Being an entrepreneur in the Czech Republic is relatively easy but newcomers may find it difficult to gain insight into what opportunities and obligations await them.
The Czech Republic’s tax system is similar to the systems of developed West European states. Over the past 10 years, the Czech Republic has adopted new laws in virtually every area of regulation in the Czech legal system, consistent with European standards, and continues to develop its legal system in line with the European norms.
In 2014 brand new enactments regulating civil and commercial law enter into force. These constitute major change both formally (newly formulated legislation) and factually.
Tax laws are subject to frequent amendments and as such are not always easy to follow. The area of taxation is generally governed by the Tax Code. Taxes are either direct and depend on income, or indirect and relate to consumption (the purchase of goods and services). Each type of tax is defined in a specific law. The administration and collection of the individual taxes is the responsibility of the Ministry of Finance of the Czech Republic and its subordinate administrative bodies, particularly the local tax offices.
All companies registered in the Czech Republic are liable for corporate income tax which is payable on worldwide taxable income and capital gains. Permanent establishments and branches of foreign companies are taxable only on income and gains arising in the Czech Republic. The Corporate Income Tax rate is 19%; and 5% on investment, mutual and pension funds.
The Czech Republic is party to a number of treaties on the avoidance of double taxation as well as other international agreements, which can make foreigners consider transferring some of their activities to the Czech Republic.
- Administration (accounting, tax and legal)
- Start up and Incorporation