Setting up a business in the Czech Republic
Foreign legal entities are allowed to conduct trade activities, including acquisition of real estate, under the same conditions and to the same extent as Czech companies.
They may become founders or co-founders of a company, or may join an existing Czech company. Foreign companies may operate in the Czech Republic, either by establishing a branch office registered in the Czech Republic or by establishing a Czech company. There are four different legal forms of companies; the most common are limited liability companies (s.r.o.) and joint-stock companies (a.s.). The trade name of the company must be unique. You can find more information on setting up a business in the Czech Republic in the attachments.
Visa issues are another hot topic for foreign investors. The conditions applying to a foreign citizen's entry to the Czech Republic and their residence in the country are governed by Act No. 326/1999 Coll., on Residence of Foreign Citizens in the Czech Republic, as amended. For detailed, yet reader-friendly information on both short- and long-term visas and work permits for citizens of the EU as well as non-EU countries click here.
Once your final decision to start doing business in the Czech Republic has been made, there are a lot of specific issues your company has to deal with. Investors are then advised to contact the Association for Foreign Investment. Thanks to comprehensive knowledge of the Czech investment environment, consultancy companies associated within the AFI are able to provide a broad range of professional services in all phases of investment projects, including legal consulting, real estate consulting, environmental advisory services, financial advisory services, corporate financing, auditing, tax advisory services, human-resources consulting and recruitment, etc.
There are other institutions that investors might find useful for doing business in the Czech Republic. Check out the list of useful contacts in attached file.
FDI Screening in the Czech Republic
The Czech Republic implements its national screening mechanism in accordance with Act No. 34/2021 Coll. on screening of foreign investments, which has entered into effect on May 1, 2021.
The law is focusing on foreign investors with the ultimate beneficial owner from non-EU countries. At the same time, the investment typically counts for 10% or higher share in targeted Czech company active in sector important for the security, public, or internal order of the Czech Republic. If the company does business in the field of production of military material, selected dual-use goods, or belongs to critical or critical information infrastructure, the investor will have to ask for consent by the Ministry of Industry and Trade (MOIT) with the investment before its completion.
The absolute majority of foreign investors in the Czech Republic does not pose any risk and their investments are not problematic from the security perspective. Foreign investors are welcome in the Czech Republic and the Czech national screening mechanism is designed to limit any substantial administrative burden.
For further information, please, see the presentation or visit the website of Ministry of Industry and Trade at https://www.mpo.cz/en/foreign-trade/investment-screening/