Despite all the benefits of opening a new company location, you also have to handle the challenges, such as deciphering local labor laws, learning tax requirements, hiring employees, and more. That’s all in addition to finding the time to run your business.
G-P offers a whole suite of global employment products and EOR solutions designed to make it easier for you to start working in other countries. When you partner with us, you won’t have to learn how to set up a Czech Republic subsidiary or spend all your time learning a whole new set of compliance laws. As a global Employer of Record (EOR), we’ll manage the entire employment lifecycle so that you can focus on your business.
How to set up a Czech Republic subsidiary
Setting up a Czech Republic subsidiary isn’t an easy task, but you can make it simpler by considering important factors before you start. Different locations, such as specific cities or regions, can have separate Czech Republic subsidiary laws. Choosing the right location will make it easier to incorporate and may have better costs and availability. You should always research a location before choosing a physical office space or work with a consultant who can recommend a good place to incorporate.
You can set up your Czech Republic subsidiary as one of several acceptable entities, including a limited liability company (LLC), joint-stock company, free zone company, branch office, or representative office. The LLC structure is the most common and will give you more freedom to operate in the Czech Republic as well as favorable tax laws.
The steps to establish an LLC include:
- Providing standard records for all directors.
- Notarizing statutory declarations and partnership articles before officially registering at the Trade Licensing Office.
- Applying for a Commercial Register to confirm registration.
- Registering with the Social Security Administration and Revenue Authority.
- Opening in-country bank accounts.
- Depositing paid-up share capital.
Czech Republic subsidiary laws
Czech Republic subsidiary laws vary by both location and entity. A single owner can register an LLC with CZK 1 in share capital. You can only appoint 1 director who can be either an individual or a corporation. The director does not have to live in the Czech Republic to meet the country’s subsidiary laws.
As an LLC, you must file financial statements with the tax authority each year. If you meet 2 of the following requirements, you’ll need an external audit each year:
- Balance sheet above EUR 1.5 million a year
- Annual turnover of more than EUR 3 million
- More than 50 employees
Benefits of setting up a Czech Republic subsidiary
Companies usually choose to incorporate in the Czech Republic because it comes with the benefit of getting to operate legally in the country. LLCs are a popular type of entity because they can protect your subsidiary and parent company. The subsidiary can operate independently using a structure that meets the Czech Republic’s culture. Your parent company will also be protected from any litigation or costs related to the subsidiary.
Rather than spending all your time setting up a Czech Republic subsidiary, G-P can help you start working in a few days using our global entity infrastructure. We’ll hire employees who work on your behalf, handle all Czech Republic subsidiary laws, and streamline your payroll. You’ll only have to worry about running your company and growing a new location.
Other important considerations
We recommend setting aside the money you’ll need for the incorporation process. In addition to share capital, fees may be involved in certain steps. Working with your accounting or finance department ahead of setting up your Czech Republic subsidiary can help you stay financially prepared.
You’ll also need an expert in Czech Republic subsidiary laws. This requirement may mean working with a lawyer or a consultant, or you can hire a full-time team member who knows these laws or is tasked with learning them.
Enter new markets with G-P — no new entities required.
Beat the competition and enter new markets in minutes, not months, with G-P. We’ve paired our industry-leading team of in-region HR and legal experts with our #1 global employment platform to help you hire compliantly in 180+ countries, eliminating the need to set up local entities or subsidiaries.
Get in touch today to learn more about how we can streamline the global growth process.