Basic information for s.r.o.

• Type of legal entity: s.r.o. (Company)
• Establishment time: up to three weeks
• Number of shareholders: minimum 1, can be any nationality
• Shareholders: members can be FO or business entities.
• Share capital: from CZK 1
• Shares on bearer: not allowed
• Registered address is mandatory, but not physical
• The company secretary is not mandatory
• Directors: minimum 1, maximum not defined
• Resident function of the director: the director does not have to reside in the Czech Republic

Basic information for a.s.

• Type of legal entity: a.s.
• Establishment time: up to three weeks
• Number of shareholders: minimum 1, can be any nationality
• Shareholders: members can be FO or business entities.
• Share capital: from CZK 2,000,000
• Actions must include:

-- name and registered office of the company
– nominal value
– indication of the form of the share
– the amount of the share capital and the number of shares on the date of issue of the share
– date of issue

• Registered address is mandatory, but not physical
• The company secretary is not mandatory
• Directors: minimum 1, maximum not defined
• Resident function of the director: the director does not have to reside in the Czech Republic

Basic information for the trust fund

• Type of legal entity: trust fund
• Establishment time: within a week
• The founder can be a legal entity or a natural person. There can be more founders.
• Share capital: from CZK 1
• The trustee can be any independent person or an investment company (CNB license).
• The trust administrator can also be the founder of the trust fund or the person who is to be paid from the trust fund.
• The founder has the right to appoint a beneficiary and to determine performance from the trust fund, unless the statute of the trust fund determines otherwise.
• Supervision of the management of the trust fund is carried out by the founder and the person designated as trustee, or other persons, if the statute so determines.
• The fund is an accounting entity and keeps accounts. The fund is a taxpayer.

Income from business activity will be subject to corporate income tax at a rate of 19%, unless it is exempt income or, for example, income that is included in a separate tax base.

It is absolutely necessary to structure the trust fund correctly in order to ensure compliance both with the current Czech legislation and with possible changes in the law in the future. In particular, it is important that the trust is robust and designed to withstand potential attacks by creditors or others in the future. This is not something you should attempt alone, but professional help should be sought.

Zbasic information for the spin-off plant

• Type of legal entity: spin-off plant
• Establishment time: one week
• The spin-off plant of a foreign company enables any foreign company to carry out its business activities in the Czech Republic
• The head of the spin-off plant is its legal representative and is authorized to act on behalf of the foreign company in all matters related to the spin-off plant
• From a legal point of view, it is a branch of a foreign trading company, although it can operate independently, it is only a part of the company without its own legal personality
• Notary registration is not required
• The registered office of the OZ is required

Basic information for the investment fund

• Type of legal entity: investment fund
• At least two different assets must be invested in the fund (e.g. 2 houses, 2 solar power plants, etc.)
• Within 1 year of the foundation of the fund, the value of the assets must be at least CZK 50 million.
• The shareholders of the fund must be at least 2 different investors (however, it can be a natural person and a s.r.o. owned by him)

Examples of use

Development activity

• Owners of photovoltaic power plants with a total output preferably of at least 6–8 MW
• Chains of restaurants, gas stations, cafes
• Enterprises with extensive production or operational premises
• Restitutors and owners of a larger set of properties
• Investors in securities, real estate, antiques, etc.

The main advantages of funds

• You set your own investment and business strategy within defined limits.
• The owner of the fund can only be you and a related entity, so there is no risk that someone else will take care of your investments badly.
• Highly trustworthy and transparent form of business (custodian is a renowned bank and supervision is performed by the CNB)
• The possibility to easily get other investors. It is a more flexible and trustworthy form than, for example, the entry of another partner into a trading company.
• Favorable tax regime (5%).

Taxation

• Corporate income tax 19%
• Branch tax rate 19%
• Capital gains tax rate of 19% (0% reduced EU rate may occur)
• Dividends / Interest / Items / Rental income 15% basic rate (35% rate for unspecified UBO, tax non-resident, etc.) (0/5% reduced rate depends on double taxation treaties, etc.)
• The state VAT rate is 21%, a reduced rate of 10% and a rate of 15% apply to specific goods.
• Net operating losses can be carried forward for up to 5 years
• Double taxation agreements with various countries were applied, determining tax rates on dividends, interest and royalties
• Accounting. Accounting and bookkeeping preparation is necessary
• Audit is not required but depends on company size
• Anonymity and privacy. Information on directors and shareholders is available in the commercial register