How to set up an s.r.o. in Czechia: procedure, costs and timing

Setting up an s.r.o. in Czechia is faster and cheaper today than it used to be — mainly thanks to direct registration by a notary. Still, it is a process with several steps that follow one another, and it pays to know them in advance so nothing delays your start.

The whole setup rests on four steps and a few fees. Let's go through the procedure, the costs and the timing.

The procedure step by step

First, a founding deed (for a single founder) or a memorandum of association is drawn up at a notary. Then the share capital is paid up — for contributions up to CZK 20,000 it is enough to deposit them with the administrator of the contribution, and no separate bank account is needed. Next comes obtaining a trade licence at the trade licensing office, and finally registration of the company in the commercial register, by which the company officially comes into existence.

In practice the first steps can be combined — a notary can today draw up the deed and, if the conditions are met, carry out the direct registration in the commercial register, so a separate court procedure is avoided. That significantly shortens the whole process. The founding deed contains the business name, seat, scope of business, amount of share capital and the managing director, and its wording is worth thinking through in advance, because later changes require another notarial deed.

Costs

For a single-member company the costs are clear. Example: the notarial deed of the founding document comes to about CZK 4,840, the court fee for direct registration carried out by the notary to CZK 2,700, and registering the trade licence to CZK 1,000 — together around CZK 8,540. Share capital can be as little as CZK 1, although in practice a higher symbolic amount is chosen. Direct registration by a notary is cheaper and faster than registration through a court, where the court fee is CZK 6,000.

The CZK 20,000 threshold for the contribution is practical: if the share capital does not exceed this amount, there is no need to open a separate bank account and the capital is deposited with the administrator of the contribution. For higher contributions the bank comes into play.

Timing and what comes after

With direct registration by a notary the company can come into existence within a few days. After it is founded you must register for corporate income tax at the tax office within 15 days; a data box is set up for the company automatically. The company also enters its beneficial owner in the register of beneficial owners. Besides registration for tax and the beneficial owner, do not forget the trade licence, which must match the scope of business entered in the register. Only when all these steps fit together can the company invoice and operate without limitation.

Conclusion

You set up an s.r.o. in four steps — deed, capital, trade licence, registration — and with direct registration by a notary you can do it in a few days and for around CZK 8,540. Whether an s.r.o. is the right form for you is covered in the article sole trader or limited company.

Frequently asked questions