Business Establishment Now Easy
It used to be a nightmare
Long gone are days when it took over 3 months to establish a LLC (s.r.o.) company in the Czech Republic. Those doing business here for over 20 years could tell, how difficult and painful the process was. Not any more.
New laws governing corporations and incorporation processes came into effect in 2014 and has not been amended much since then. The processes settled, IT systems were debugged and legal community found their paths to do things quickly and efficiently. EU regulations helped, too (to be fair).
Due to the fact that a fresh LLC (s.r.o.) company can be established so quickly, ready-made companies rendered nearly obsolote and the market focuses on "specialities" like VAT registered ready-made LLCs and other connected services (providing virtual addresses for companies, nominee services, etc.).
Establishment Of S.R.O. (LLC) in just 7 days
At present, we are able to establish an s.r.o. (LLC) within a week after submission of all relevant documentation. Sometimes, collecting the required information and documents (esp. from foreigners outside EU) may take actually longer than the establishment and incorporation process itself.
Since the capital requirement for an s.r.o. is minimal - one (1) Czech koruna per shareholder (EUR 0.04), this basic and most common Czech company is affordable to any enterpreneur / start-up. Costs connected with establishment of an s.r.o., i.e. notary fees and stamp duties range from EUR 240 - 480 depending on the internal legal structure of the company.
Although technically, a Czech speaking enterpreneur could establish a company by going to the nearest notary office and asking him to so, in our experience, it is advisable to consult or even leave the process in the hands of an experienced law office. Even for Czechs.
A skilled lawyer will not only advise on required trading licenses, internal structure of the company, where to get what stamp or signature, but may also quide through the whole process or even procure all necessesary steps on one's behalf based on power of attorney. Such legal service costs usually additional CZK 15.000-20.000 (EUR 600-800) plus VAT (21% at present), but it pays off.
Article by: Jiri Buchvaldek, Partner
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