Introduction to setting up a Czech subsidiary

The establishment of a subsidiary in the Czech Republic is done in accordance with the Commercial Code, and trade businesses are also regulated by the Trade Licensing Act. Once registered, subsidiaries are regarded as normal limited companies with Czech residency, independent from the parent company. The Czech Republic is one of the most rewarding countries in the EU for foreign investment, and with its open economy is incredibly popular for setting up subsidiaries.

 

What are the main formalities of a Czech subsidiary?

• The minimum share capital required is 200,000CZK
• The Memorandum & Articles of Association of the subsidiary
• Extract from the commercial register of the Founder
• The resolution of the parent company detailing its decision to form the subsidiary
• Number of shareholders is between one and fifty
• A registered office in the Czech Republic
• An Executive Director of the subsidiary, not required to be a Czech citizen
• Extract from the Criminal register of the Executive Director from the country of their citizenship or last residency

The subsidiary is established by the Notarial Deed which can be done upon Power of Attorney. There is no need for shareholders or Executive Directors to be present in the Czech Republic personally. The documents shown above must be filed with the Czech Commercial Register after establishment in order to register the subsidiary and obtain a Czech identification number.

 

What are the accounting requirements of a Czech subsidiary?

The Czech Act on Accounting regulates the accounting requirements for all businesses in the Czech Republic.

Subsidiaries must register with the local Tax Authorities and are required to submit annually audited accounts. If the annual turnover exceeds CZK 1,000,000 payment of VAT is mandatory. VAT accounts should be submitted quarterly or monthly and tax accounts annually.

Financial statements must be annually approved by the General Meeting of the company no less than 6 months after the end of the accounting period.

A Czech bank account is also required for the necessary amount of share capital.

Please contact us for further information on accountancy services and tax rates in the Czech Republic.

 

Subsidiary Formation Packages

All the aspects required for the formation of a subsidiary in the Czech Republic can be managed by us through our reputable subsidiary formation packages.

The services include bank account set up and registration for VAT, and efficiently manage the entire process on your behalf.

We are expertly experienced in the requirements for European formation so you can rely on us to organise everything from start to finish.

 

For further information on subsidiaries in the Czech Republic, please contact us using the form below.