The Czech Republic is part of the European Union and is located at the center. It has well developed infrastructure and services along with a stable political system. The Czech Republic’s capital city is the historical and culturally well-known Prague. It’s one of the top locations in Europe to open a business. The Czech Republic attracts foreign investors worldwide because of its unique location, supportive business activities and potentially low employee salaries.
All companies that are registered in the Czech Republic are responsible for corporate income tax. It’s payable based on capital gains and worldwide taxable income. Czech accounting legislation requires that the tax base is calculated from the profit/loss financial statements paperwork it provides. Income tax for a corporation is 19%, but investment funds, unit funds and pension funds have a corporate income tax rate of only 5%. Czech legislation allows taxpayers to change their accounting period from calendar year to fiscal year and vice versa by notifying the Tax Authority. Here are some things you must know if you are interested in the Czech Republic Company Formation.
A limited liability company (SRO) is the most common type of business entity especially for small and medium sized businesses. Shareholders are not liable for the company’s obligations as long as their contributions are paid in full and registered with the Commercial Register. An SRO is liable for breaching obligations with its entire property.
Registered capital is normally around 200,000 CZK (About $9,700 USD) however, it is possible to establish a company with one member and a contribution of 1 CZK ($0.05 USD) but is recommended to set-up an SRO with a minimum of 1,000CZK ($50 USD). The registered amount is fully usable and does not have to remain on the account