Czech Republic

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Local business incentives - Legal forms of companies - Registration and licensing procedures - Legal framework - Foreign exchange control - Regulations concerning equity investment - FDI inflows - Expertise of the political risk

Local business incentives

Generally, there is no need to get an authorization before setting up a company, except in some sectors such as national defence, national security, nuclear energy, etc. In particular cases, companies have to contact the respective ministries. Investors shall contact CzechInvest, the agency of the Ministry of Industry and Trade of the Czech Republic, in order to get further information on investment matters.


Legal forms of companies

Form Number of partners/shareholders Minimum and/or maximum capital Liability Registration fee Release of financial documents
Private Limited Company. No minimum.
Maximum 5 .
Minimum CZK 100,000. Partners' liability is limited to the amount contributed.
Public Limited Company. No minimum, can be a sole proprietorship. Minimum CZK 1 million, at least 30% must be released before the constituting general meeting. Liability is limited to the amount contributed.
The general partnership. No minimum No minimum capital. Liability is unlimited.
The limited partnership. Two types of partners: active partners and sleeping partners. No minimum capital. Liability of active partners is unlimited. Liability of sleeping partners is limited to the amount contributed.

Registration and licensing procedures
Registration procedure is regulated by the Trading Act the latest changes of which came into effect on January 1st 1996.
All documents must be drawn up in Czech, and translations and signatures must be certified by a notarized deed.
All companies must register with the local Trade office where the company is located. The competent Trade Register is the one where the company is located, the district Court or the regional Court. Branches of foreign companies must be registered and provide full details on the activities they intend to develop, under penalty of not being able to carry them out.

Foreign exchange control
As for currency exchange regulations, free conversion of currencies, established by the Foreign Exchange Act in 1995, is carried out.
Besides, foreign investors are allowed to transfer profit and capital. These transfers and repatriation operations are subject to a compulsory declaration for statistical purposes with the Czech Central Bank.

Regulations concerning equity investment
A majority holding interest in the capital of a Czech company is legal.  

Foreign Direct Investment inflows in Czech Republic

FDI inflows 2003 2004 2005 World rank (*)
FDI inflows (USD million) 2 101 4 974 10 991 32/141
Source : UNCTAD - World Investment Report
Note : (*) World Rank = UNCTAD Inward FDI Performance Index. It is a measure of the extend to which a host country receives inward FDI relative to its economic size. It is calculated as a ratio of the country's share in global FDI inflows to its share in global GDP.


Last modified in 2006 - ongoing update
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