A guide to doing business in the Czech Republic

By Peter Valert and Zuzana Záhumenská, DLA Piper
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The Czech Republic is a full-fledged parliamentary democracy and among the emerging democracies in central and eastern Europe, it has one of the most developed industrialized economies. The Czech koruna (CZK) is a fully convertible currency. Since 1991, its stability has been maintained by the independent Czech National Bank. One of the Czech Republic’s most important economic advantages is its well established infrastructural links to both western and eastern Europe.

Business participation

The Czech Republic, as an EU member state, is a part of the European internal market, which features freedom of movement for workers, freedom of establishment, freedom to provide services, and free movement of goods and capital. Even though these fundamental freedoms are not guaranteed to economic operators outside the EU, the legal and political environment of the member states is business-friendly and attractive to foreign entrepreneurs.

Peter Valert Managing partner DLA Piper
Peter Valert
Managing partner
DLA Piper

Accordingly, foreign entities may (and do) set up affiliates in the Czech Republic, most frequently in the form of a limited liability company. The incorporation process is quite simple and capital of only CZK200,000 (US$9,700) is required.

A joint-stock company is common in the Czech business world but, as a more sophisticated legal entity with more complex corporate governance, it is usually used in cases where a large volume of business is contemplated and huge financial resources are necessary. General commercial partnerships or limited partnerships are used less frequently, mostly due to the unlimited liability of their members.

An organizational branch or subsidiary of a foreign company can also be established in the Czech Republic. A company or a branch may conduct business in the Czech Republic after it has been established and registered with the Czech Commercial Register (the average time for completion of this process is 40 days).

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Peter Valert is the managing partner of DLA Piper in the Czech Republic and also coordinates the firm’s intellectual property and technology group in central and eastern Europe. He is based in the Prague office. Zuzana Záhumenská is an associate in the Czech intellectual property and technology group and is based in the Prague office. She has expertise in advising clients on labour law and corporate matters. DLA Piper is the world’s largest legal practice with more than 4,200 lawyers in 77 offices across 31 countries.

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Perlová 5

11000

Prague 1

Czech Republic

Tel: +420 222 817 111

Fax: +420 222 246 065

peter.valert@dlapiper.com

www.dlapiper.com

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