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Executive Summary
Being situated in the Central Europe the country boarders to Germany, Austria, Slovakia and Poland. In 1993 the former country Czechoslovakia split into Slovakia and Czech Republic both of which are the EU member states since 2004. Czech Republic has joined NATO in 1999.

Prague is the capital of Czech Republic, which has adopted the parliamentary representative democracy,

where the Prime Minister is the head of the government, but the President is the head of the country.

Czech Republic since the beginning on 1990ies has been realizing wide reforms, and the country has been recognized as the developed country by the World Bank in 2006, as well as the leader in terms of respecting human rights among the countries of the former communist group. Most of its economic activities have been privatized including banks and telecommunication companies. Tourism contributes significantly to the GDP.

The area of the county is almost 79,000 sq km with the population exceeding 10 million people. Czech is the national language.

The national currency is Czech koruna (CZK).

Geography
A hilly landscape is characteristic to the country, the highest point of which is Snezka – 1,602 m above the seal level. The rivers flow to North Sea, Baltic Sea and Black Sea. Different types of forests are met on the whole territory of the country.

The climate is temperate and continental, that gives cold winters and hot summers. 

Map, Flag and Coat of Arm


Types of Company

Limited Liability Company
One person can be the owner and the executive director of the company, and this structure offers a simpler administration than a joint stock company. The minimum capital is 200,000 CZK. The maximum number of shareholders is limited to 50.

Joint Stock Company
This company is suitable for managing a large business activity with many shareholders, where bearer shares are allowed, that gives a major level of confidentiality to the members of the company.  Minimal registered capital is 2,000,000 CZK, the company can be managed by one director if there is only one shareholder, but there is an obligatory requirement for at least three directors in case there is more than one member in the company. The Supervisory Board should consist of at least 3 private persons other than directors. A physical registered office is required, where PO Box addresses are not allowed.

Branch
This type of structure authorizes a foreign company to open and conduct a business activity in Czech Republic without the necessity to create a separate company. A director should be appointed to manage the business of the branch.

General Partnership
The parties come together to work under a single name and agree to be fully liable for all the activities and debts of the partnership.

Limited Partnership
The liability of at least one partner should be limited to the capital invested into the structure, and one or more partners should be fully liable for the partnership’s obligations.

Co-operative

Usually members are not liable to the company’s activities results, there should be at least 5 shareholders and the minimum capital of 50,000 CZK is an obligatory requirement. Every member has one vote. It is easy to transfer membership, this structure is often used to hold residential property.

Taxation
The calendar year coincides with the tax year, starting on the 1st January and ending on 31st December.

Personal
A resident is liable to pay tax on income generated in Czech Republic and abroad at a rate of 15%, while non-residents pay income tax only on income generated on the territory of the country. An employer is obliged to deduct and pay employees’ taxes to the authorities on a monthly basis.

Corporate
Income tax rate is 21%, capital gains are taxed as income. Mandatory social security payments are at a rate of 35% for an employer and 12.5% for an employee. Dividends, royalties and interests are deducted at 15% from the payments to non-residents.
The standard VAT rate is 19%, with a reduced rate of 5% for certain goods and services.

 
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