Firm Profile > Kocián Šolc Balaštík > Prague, Czech Republic
Kocián Šolc Balaštík Offices
Kocián Šolc Balaštík > The Legal 500 Rankings
Kocián Šolc Balaštík's team is co-led by Dagmar Dubecká and Petr Kasík and is singled out for its experience in significant transactions in the corporate market and activity in the M&A space. The firm was the first to engage in corporate privatisation in the domestic market, and continues to handle complex deals in the banking and finance, real estate and telecoms. Standout team member Martin Šolc and Martin Krejčí, who is noted for his M&A-related financing expertise, are also recommended.
Karlovarské minerální vody/ KMV BEV s.r.o.
Škoda Auto DigiLab s.r.o.
Beire Acquisition, s.r.o.
J&T Wine Holding
Energo Holding, a.s. (from the Slot Group)
WWVV Beheer B.V.
Bakaláři software s.r.o.
Dispute resolution Tier 1
Kocián Šolc Balaštík has particular skill in banking disputes, acting for leading Czech financial institutions and international clients. The team also has experience in a range of other sectors, with strengths in energy, construction and investment, handling both litigation and arbitration. Pavel Dejl leads the team, which includes Sylvie Sobolová and Hana Dejlová, who are widely recommended for high-profile investment and contractual disputes, and associate Miloslav Petrů, who specialises in international and EU law.
LEO Express, a.s.
O2 Czech Republic a.s.
Česká spořitelna, a.s.
Heineken Česká republika, a.s.
Energo – Pro a.s.
Slot Group, a.s.
Czech Radio Broadcaster
Sberbank CZ, a.s.
UniCredit Bank Czech
Republic and Slovakia, a.s.
PPF Group N.V.
Tax Tier 1
Kocián Šolc Balaštík is praised as being 'very reputable, professional and dedicated' and is experienced in handling heavyweight tax instructions for a multitude of banking clients. Led by the highly-rated Helena Navrátilová and Jan Černohouz, the practice is noted for its experience in international tax planning and restructuring.
‘Helena Navratilova stands out for her profound expertise in the tax area and extremely dedicated client handling.‘
‘Martin Solc is a heavyweight. He brings authority to the table and is focused on getting results.‘
Rockaway Capital SE a.s.
Český rozhlas (Czech Radio)
Ball Aerosol Packaging CZ
Česká televize (Czech television)
IHI Towers s.r.o.
YIT Stavo s.r.o.
Karlovarské minerální vody, a.s.
O2 Czech Republic, a.s.
Quanta Human Resources CZ s.r.o.
Rockaway e-commerce, a.s.
EU and competition Tier 2
Kocián Šolc Balaštík has a strong track record of acting for local and multinational clients in mid-to-high-value competition-related litigation before the courts. The team also handles state aid, merger clearance and other competition law matters. Led by Pavel Dejl, whose focus is on dispute resolution, the team also includes Sylvie Sobolová and associate Martin Vráb, and has strength in the automotive and financial sectors.
Asiana, spol. s r.o.
Karlovarské minerální vody, a.s.
Siad Czech spol. s r.o.
Ferrero Česká s.r.o.
Leo Express, a.s.
Česká národní banka (Czech National Bank)
RWE Supply & Trading CZ a.s.
O2 Czech Republic, a.s.
Advanced World Transport, a.s.
Slot Group a.s.
Projects and energy Tier 2
Kocián Šolc Balaštík is the name to note for large-scale power and construction projects in the domestic energy market, led by the standout Václav Rovenský. The team advises on a wide range of matters, including project financing. Tomáš Sequens specialises in energy law and is recommended for his expertise in commercial transactions with an energy focus.
Kocián Šolc Balaštík is noted for its 'superior regulatory knowledge' and its strength in project finance, acquisition finance and leveraged finance deals. Jointly led by banking experts Petr Kasík and Martin Krejčí, the team has expertise in regulatory work and financial litigation, and advises leading banks.
‘Martin Krejci is an experienced and likeable lawyer who gives everything for the client in leveraged finance and debt capital markets work.’
‘Counsel Vlastimil Pihera is one of the leading lights on bonds (and has a niche trusts practice).’
‘The team has good experience and capabilities in the areas of leveraged finance (lender and borrower side), asset finance, debt capital markets and more specialised spaces like fintech and mini-bonds.‘
‘An extremely close-knit team that will never let you down.‘
Czech National Bank
O2 Czech Republic a.s.
Raiffeisenbank a.s. 1
J&T Banka a.s.
Karlovarské minerální vody a.s.
Intellectual property Tier 3
Kocián Šolc Balaštík is described as 'flexible and competent' and advises on the full spectrum of IP matters, with a particular focus on the IT sector, acting for both local and international clients. Practice head Hana Heroldová is noted for her strength in the pharmaceutical and healthcare sectors. She is supported by Drahomír Tomašuk and Petra Mirovská.
Škoda Auto DigiLab
Jacobs Douwe Egberts
Národní divadlo (the Czech National Theatre)
Megiedon (now Profimedia.CZ)
School My Project
Ostravské vodárny a kanalizace
Pivní lázně Praha
TMT Tier 3
At Kocián Šolc Balaštík, the team is led by Drahomír Tomašuk and has experience handling regulatory work for a broad spectrum of local and international companies in the telecoms and media industries. The team also advises international companies on market entry and offers a data protection service, for which Jaroslav Zahradníček is the key contact.
Deutsche Telekom AG
Škoda Auto a.s.
European Global Navigation Satellite Systems Agency (GSA)
Employment Tier 4
Kocián Šolc Balaštík advises both domestic and international clients and has some cross-border employment capabilities. Led by Václav Rovenský, the team works in co-operation with the firm's tax practice to advise on employee costs and reimbursement. Michal Hanuš is a key name to note; he has expertise in advising on the employment aspects of corporate restructurings and assisting leading clients in the automotive and sports sectors with employment matters.
‘The team has broad professional knowledge and experience, and is highly intellectual with a moral and proactive approach.’
Quanta Human Resources s.r.o.
North Carolina University
AGC Automotive Czech a.s.
Corinthia Panorama, s.r.o.
Sdružení pro rozvoj Moravskoslezského kraje, z.s.
Deza, a.s. (member of the Agrofert Group)
DAF Trucks Praha, s.r.o.
Lidl Česká republika v.o.s.
Ferratum Czech s.r.o.
Real estate and construction Tier 4
Kocián Šolc Balaštík advises on the full spectrum of real estate matters, with a particular focus on complex regulatory matters, permit issues and leases. Jiří Horník leads the team, which includes hotel sector specialist Václav Rovenský and Martin Krejčí.
European Global Navigation Satellite Systems Agency (GSA)
BM Management s.r.o.
YIT Stavo s.r.o.
Kocián Šolc Balaštík > Firm Profile
Celebrating its 30th year of being at the forefront of the market, KŠB is an independent Czech law firm. KŠB advises on Czech and European law, and also has a German law and English law capacity. Since many of the firm’s professionals are qualified in several fields, KŠB’s advice is enhanced by specialist academic and sector knowledge. KŠB combines in-depth local knowledge and quick decision-making, and its network of long-term international relationships with other leading independent law firms around the globe enables it to advise on cross-border transactions to the highest possible standards. KŠB is actively involved in the legislative process and in professional bar associations, as well. KŠB senior partner Martin Šolc was the President of the International Bar Association in 2017 and 2018.
Main Areas of Practice:
M&A: A market leader in M&A and a recognized pioneer in using new legal concepts and transaction structures, KŠB advises on legal and tax structuring, asset and share deals, and corporate restructuring. It also provides highly focused and experienced legal and tax due diligence. KŠB’s clients include ČEZ, Heineken Group, Karlovarské minerální vody (KMV), Solitea, ŠKODA AUTO DigiLab, and YIT Stavo. Recently KŠB advised KMV on the acquisition of Knjaz Milos – the largest Serbian mineral water and non-alcoholic beverage producer, and Solitea on several acquisitions in the IT business.
Corporate: KŠB advises on establishing all types of companies, including Societas Europaea. Its services include preparing and revising company incorporation documents, facilitating board and general meetings, making changes to registered capital, and mergers, divisions, and transformations of various company and partnership structures. One of KŠB’s most high-profile cases was advising O2 Czech Republic on a globally exceptional voluntary unbundling and CETIN on a whitewash procedure for the largest financial assistance ever granted in the Czech Republic.
Banking & Finance: KŠB provides comprehensive legal services to financial sector clients, including transaction and regulatory work, and advises on project and acquisition finance, real estate finance, aircraft finance and export finance in each case in bilateral, syndicated and mezzanine structures, retail finance and insurance, and cross-border transactions. KŠB is highly rated for its regulatory expertise, and is also covering new ground in the area of FinTech. KŠB has been assisting the Czech National Bank for more than 20 years. Other clients include Banka CREDITAS, Erste Group, J&T Banka, Raiffeisen Bank, Commerzbank AG, Citibank, Ferratum Bank, USF, ING Bank, mBank and UniCredit Bank. KŠB’s non-institutional clients include members of the most important entrepreneurs’ group in the Czech Republic and also CEE region.
Securities & Capital Markets: KŠB advises issuers, shareholders and leading domestic as well as foreign investment banks in the entire spectrum of securities and capital market deals. In addition to advising on general securities issues, KŠB structures securities which are innovative and the first of their kind in the Czech Republic, such as the issuing of perpetual bonds by a Czech bank and the issuing of convertible bonds. Moreover, KŠB has extensive capital market regulatory experience.
Competition: KŠB’s advice on competition law includes alleged abuse of dominance, dawn raids, and merger clearance procedures. KŠB was awarded the European Competition Case of the Year award in The Lawyer European Awards 2015 for its victory at the European Court of Human Rights in which it represented DELTA PEKARNY against the Czech Republic regarding the legality of dawn raids. KŠB has recently been representing Asiana, KMV, Agrofert, Leo Express, Czech National Bank, and Skanska.
Litigation & Arbitration: KŠB’s dispute resolution practice has been repeatedly recognized as one of the best in the Czech Republic. KŠB represents its clients in court, arbitration and before public law bodies, in particular relating to contracts, damages compensation, corporate matters, invalidity of general meeting resolutions, employment law, unfair competition and infringement of intellectual property rights. Recently, KŠB has been representing Heineken Czech Republic, PPF Group, the Czech National Theatre, Lovochemie, Leo Express, Agrofert, Czech television and radio broadcasters, Slot Group, KMV, and O2 Czech Republic.
Energy (including Mining): KŠB is best known in the energy sector for its expertise and success in the planning, development, implementation and operation of large-scale power and heat generation developments. KŠB represents clients in negotiations with administrative offices and advises on energy regulation. Its clients include Alpiq, Lovochemie, REMA AOS, Carthamus, Green Gas DPB, RWE and ČEZ. Recently, KŠB has been advising Lovochemie on finalizing its UGL project (development of a brand-new unit for producing UGL fertilizers).
Real Estate: KŠB advises leading CEE developers in logistics, retail and residential sectors, fast-growing investment funds focusing on industrial properties, and real estate project financiers. Recently, KŠB represented J&T Banka as regards financing for building a hotel complex in Croatia and advised the seller in the disposal of multipurpose venue Forum Karlin. KŠB’s clients also include European Global Navigation Satellite Systems Agency, YIT Stavo, Moravská stavební Group, VGP Group, Passerinvest Group and many others.
Aviation: KŠB is prized for its unique expertise in aviation, including aircraft financing, regulatory issues and claims handling. Its clients include Air Canada, Allianz, easyJet, Macquarie Aviation, and Prague Airport. KŠB also advises the European Global Navigation Satellite Systems Agency on issues linked with the deployment of the European Geostationary Navigation Overlay Service (EGNOS), which provides augmentation to the standard GPS and Galileo signals.
TMT/IP/IT: KŠB provides advice and assistance in connection with telecommunications law, including privatization of telecommunications companies, and advice on tenders for operators of electronic communications networks and electronic telecommunications service providers. KŠB also has a full-service intellectual property practice, with experienced lawyers in all areas of intellectual property law, including IT, e-commerce and unfair competition. KŠB also provides advice and assistance on many regulatory issues, including advertising and personal data protection.
Employment: KŠB provides legal advice on a wide variety of employment law issues, from the conclusion and termination of standard employment agreements, agreements for managers and top management, including service agreements, work assignments (secondments) and agency employment, to the relations with trade union organizations/employee councils and workplace injury-related matters.
Tax: Recognized repeatedly by international and domestic ratings agencies, KŠB’s tax team has enhanced its reputation in the specific areas of taxation of international mergers and acquisitions, bonds, qualified investor funds, tax compliance and VAT claims. Having a tax team at a law firm, which is still quite unique on the Czech market, means that KŠB’s lawyers and tax advisors can take advantage of mutual synergies, thus bringing undeniable benefits to clients.
|M&A, Corporate Restructuring||Dagmar Dubecká, Managing Partnerfirstname.lastname@example.org||+420 224 103 316|
|M&A, Corporate Restructuring||Martin Šolc, Partneremail@example.com||+420 224 103 316|
|Competition Law, Litigation & Arbitration||Pavel Dejl, Partnerfirstname.lastname@example.org||+420 224 103 316|
|Real Estate, Aviation||Jiří Horník, Partneremail@example.com||+420 224 103 316|
|Company Law, Insurance Law||Petr Kasík, Partnerfirstname.lastname@example.org||+420 224 103 316|
|Banking, Project Finance including PPP||Martin Krejčí, Partneremail@example.com||+420 224 103 316|
|Company Law, Mergers & Acquisitions||Jan Lasák, Partnerfirstname.lastname@example.org||+420 224 103 316|
|Tax||Helena Navrátilová, Tax Partneremail@example.com||+420 224 103 316|
|Securities and Capital Markets, Investment Funds||Vlastimil Pihera, Partnerfirstname.lastname@example.org||+420 224 103 316|
|Energy and Mining Law, Utilites Law, Construction Law||Václav Rovenský, Partneremail@example.com||+420 224 103 316|
|Public Procurement and State Aid, Intellectual And Industrial Property Law||Sylvie Sobolová, Partnerfirstname.lastname@example.org||+420 224 103 316|
|TMT, Data Protection||Drahomír Tomašuk, Partneremail@example.com||+420 224 103 316|
|Company Law||Jan Dědič, Partnerfirstname.lastname@example.org||+420 224 103 316|
|Mr Jan Dědič||Partner||View Profile|
|Pavel Dejl||Partner||View Profile|
|Dagmar Dubecká||Managing Partner||View Profile|
|Mr Jiří Horník||Partner||View Profile|
|Petr Kasík||Partner||View Profile|
|Mr Martin Krejčí||Partner||View Profile|
|Mr Jan Lasák||Partner||View Profile|
|Helena Navrátilová||Partner||View Profile|
|Mr Vlastimil Pihera||Partner||View Profile|
|Václav Rovenský||Partner||View Profile|
|Sylvie Sobolová||Partner||View Profile|
|Drahomír Tomašuk||Partner||View Profile|
|Martin Šolc||Partner||View Profile|
Staff FiguresLawyers : 63 Tax advisors : 6
LanguagesEnglish German Italian Russian French Slovak Czech
MembershipsIBA (International Bar Association) World Services Group (WSG) Employment Law Alliance (ELA) L2B Aviation Corporate Tax Alliance Czech-German Chamber of Industry and Commerce Czech Capital Market Association
Doing Business In
The Czech Republic, being formerly part of the Austro-Hungarian Empire, has a continental civil code based legal system based on Roman law. After forty years of communist rule, it began its transformation from a centrally planned economic system to a market economy after the so-called “Velvet Revolution” in 1989. From 1990 onwards it has consistently attracted large volumes of foreign investment. The Czech Republic became a member of the European Union as of 1 May 2004 and in the lead up to the EU accession, Czech laws were harmonized with EU law.
International investors are attracted to investing in the Czech Republic for a variety of strategic reasons, including the following:
- Central location
The Czech Republic is conveniently located at the geographical centre of Europe.
- Access to EU markets
The Czech Republic’s EU membership allows for total free movement of capital, goods, people and services within all EU member states. Located geographically within the heart of Europe, the Czech Republic is also very conveniently located from a logistical point of view for access of goods to other EU markets.
- Economic and Political Stability
From the time of the Velvet Revolution in 1989, the Czech Republic has been acclaimed by investors for both its political and economic stability, which was particularly demonstrated in its quick recovery from the international financial crisis of 2008/2009.
- Favourable labour costs
The Czech Republic still enjoys lower labour costs than the “Western” or longer established EU members, thus investors and employers benefit from the same skill level at a lower cost.
- Skilled workforce
The Czech Republic has a highly skilled workforce, particularly in technology and engineering. Educational and literacy levels are high. Companies report few difficulties in recruiting skilled and unskilled workers, particularly in industrial areas where unemployment is highest. Nevertheless, the total unemployment rate in the Czech Republic has been law for many years, in September 2020 it was 3.8% but this is a 2 year historic high, likely due to the impact of Covid-19.
- Non-discrimination of foreign vs. domestic investors
Foreign and domestic companies are treated identically in all areas under Czech law. At present, review of foreign investment projects applies to certain cases in the banking and defence sectors. Foreign legal entities may acquire real estate in the Czech Republic without any restrictions and under the same conditions as Czech legal entities. Nevertheless, as a result of the EU Foreign Investment Screening Regulation that entered into effect in April 2019, a new Foreign Investment Screening Act has been prepared and is in the process of implementation. The Act will address the screening of foreign investment entering the Czech Republic from outside the EU as well as monitoring potentially risk capital inflows into the Czech Republic from outside the EU.
- Popular as an FDI destination
The Czech Republic is one of the most successful CEE countries in terms of attracting foreign direct investment. According to the Czech National Bank, a total amount of more than EUR 130 billion worth of FDI has been recorded since 1993. The Czech Republic hosts almost 100,000 foreign companies of all sizes. Famous multinational companies such as ABB, Continental, Ford, Nestlé, IBM, DHL, Astra Zeneca, Rockwell, Procter & Gamble, Renault, Siemens, Tyco, Honeywell, Amazon and Volkswagen have significant subsidiaries in the Czech Republic.
- Competitive advantage
According to the 2019 Global Competitiveness Report published by the World Economic Forum, the Czech Republic ranks 32nd among 141 world economies in terms of competitiveness, placing it at the top of the CEE countries in competitiveness.
The Czech Republic is characterised as a mature host country for FDI with low inflation, modest interest rates, a relatively stable and fully convertible currency (CZK – Czech koruna) and a good rate of economic growth providing favourable conditions for investors. The Czech Republic was the first CEE country to be admitted into the OECD and is a member of NATO, the WTO, IMF and EBRD.
- Investment protection
The Czech Republic is a member of the Multilateral Investment Guarantee Agency (MIGA), an international organisation for protection of investments, which is part of the World Bank-IMF group. The country has signed a number of bilateral treaties which support and protect foreign investments, for example with the United States, Germany, the United Kingdom, France, Austria, Switzerland, Italy, Belgium, Luxembourg, the Netherlands, Finland, Norway, Denmark and China.
- Avoidance of double taxation
The Czech Republic has treaties to prevent double taxation on dividends, interest and royalties with many countries, including all EU countries, United States, Japan, Australia and Canada and numerous others.
- Repatriation of profits
There are no restrictions on distribution and repatriation of profits by Czech subsidiaries to their foreign corporate parents, aside from the need to pay withholding tax and for joint stock and limited liability companies, the need to maintain a mandatory reserve fund, which requirement applies to all Czech companies.
Foreign Exchange and Regulatory Aspects of Foreign Investment
The currency of the Czech Republic is the Czech Crown. Although eventual adoption of the EURO is expected, there is currently no specific timetable for its adoption. There are no foreign exchange controls or restrictions; currency is freely exchangeable pursuant to the Act No. 219/1995, Coll., the Foreign Exchange Act, as amended, and several implementation decrees of the Czech National Bank.
Choice of business entity
Foreign investors will generally choose either a limited liability company (s.r.o.) or a joint stock company (a.s.) as their Czech corporate entity investment vehicle, although a branch office of the foreign company is also sometimes used.
The s.r.o. is a very popular legal form for small and medium-sized businesses in the Czech Republic because it requires a lower minimum capital investment and fewer corporate governance requirements than an a.s. The Czech joint stock company´s minimum amount of the registered capital is CZK 2,000,000. A limited liability company´s minimum amount of the registered capital is CZK 1 (however, every shareholder has a minimum contribution obligation of CZK 1).
Neither a limited liability nor a joint stock company is required to keep a reserve fund to cover losses.
For the establishment of Czech branch office, there is no registered capital required. It should be noted that a branch office does not have legal capacity on its own accord under Czech law, its authorization and capability to act is based on the legal capacity of its founder under the respective foreign law of the founder.
Foundation and registration of s.r.o. and a.s.
Both the s.r.o. and the a.s. are founded by conclusion of a founding document. It is also possible to conclude a founding document based on a power of attorney. There are no restrictions on who the founder can be (e.g. also foreigners). The founding document needs to be notarized by a Czech notary and any changes made to the founding document during the existence of the company shall be notarized as well.
Both the s.r.o. and the a.s. are created as legal entities upon their registration in the Commercial Register. The Commercial Register contains the most relevant information about the Company, its shareholders (which does not apply to the a.s. except for when the a.s. has a sole shareholder) and the members of the company’s bodies. The founding document as well as other relevant documents (e.g. company’s financial statements) shall be filed in the Collection of Documents of the Commercial Register. The Commercial Register, including the Collection of Documents, is accessible to public at www.justice.cz.
s.r.o. (limited liability company)
A limited liability company does not issue shares, its participants acquire an ownership interest or a participation interest. The founding documents may, however, allow for the company to issue so called ownership/participation interest certificate to participants, which has the same function as shares in the a.s.. The founding documents of an s.r.o. may also allow for the existence of various types of ownership interest (e.g. such as a fixed share in profit or with special rights/duties attached or without voting right etc.).
a.s. (joint stock company)
A joint stock company issues shares to its shareholders, which may be either registered shares or bearer shares. Registered shares are either issued as certified shares or can be maintained as book entry (computer entry) securities at the Central Securities Depositary or can be immobilized (physically deposited). Bearer shares may only be in the form of book entry securities or immobilized shares. The joint stock company may also issue preference shares (non-voting unless otherwise stated in the founding documents), and other types of shares (e.g. with special rights attached or without share in profit etc.) or shares with or without a nominal value.
The shares of a joint stock company may have separately transferable rights, thereby for example, rights to distribution of profits, preferential subscription rights and rights to share in a liquidation surplus may be transferred separately from the share.
A joint stock company may issue convertible bonds and preference bonds.
Company and Shareholder Liability
As far as a company´s liability is concerned, both the Czech joint stock company and limited liability company are liable with its entire property for its breach of obligations. However, shareholders of a joint stock company are not during the existence of the company liable for breaches of company´s obligations at all. Members of a limited liability company are jointly and severally liable for the company´s obligations up to the unpaid contributions of all members to the registered capital. A Branch office is not liable for breach of its obligations; the parent company is fully liable for it.
Management and corporate structure
An s.r.o. must have at least one executive and also the general meeting (of all shareholders) as its obligatory bodies (supervisory board is only voluntary). The general meeting must take place once a year.
An a.s. must have, alongside the general meeting, one of the following structures:
- Board of directors and supervisory board (dualistic structure).
- Management board and statutory director until 31 December 2020, and only Management board as of 1 January 2021 (monistic structure).
For an a.s., the Act on Commercial Corporations makes it possible to choose between a ‘monistic’ and ‘dualistic’ model of corporate governance. The monistic model is based on the Management Board appointed by the general meeting, in which the powers of both the Board of Directors and of the Supervisory Board are vested. Until 31 December 2020, the general meeting appoints however also a second body of the company, a Statutory Director (who may be an individual outside the Management Board); the founding document may stipulate that the Statutory Director is appointed by the Management Board. The Statutory Director acts on the company’s behalf towards third parties. The chairman of the Management Board may be the same individual as the Statutory Director. As of 1 January 2021, the monistic a.s. will no longer create a body of a Statutory Director and the single body of the monistic a.s. will be the Management Board, appointed by the General Meeting, unless the Articles of Association stipulate that the right to appoint and revoke the Management Baord is a right connected with the share. All members of Management Board will be entitled to act on the company’s behalf towards third parties.
In the case of a dualistic structure in a.s. which has more than 500 employees, 1/3 of the members of the Supervisory Board must be elected by the employees.
A Czech Branch office must have a Head of branch office who is entitled to act on behalf of the parent company as regards the branch office.
Investment incentives in the Czech Republic
The Czech Republic offers a variety of investment incentives. The most prevalent in recent years have been incentives for investments in the manufacturing industry, but the range of eligible projects now include business support services, covering shared service centres, software development centres, high-tech repair centres and data centres. As incentives are considered state aid, they are granted in full compliance with EU state aid regulations.
Incentives are provided under the Act on Investment Incentives, and consist of:
- income tax relief for up to ten years for a new company established for an investment project and partial tax relief for up to ten years for an existing company which will be expanding an investment project
- cash grant for up to 20% of capital investment in certain strategic projects
- employment subsidies in the form of grants for job creation and training with respect to technology centres (available only in regions with high unemployment rates)
Register of Beneficial Ownership
In 2018, compulsory registration of companies’ beneficial owners into the Register of Beneficial Owners was introduced. The Register is not public and the information in it is only accessible to selected public authorities.
Management rights, i.e. the right to act on the company’s behalf, can be restricted by the corporate documents of the company or decisions of the general meeting. However, it is possible that the manner of acting on behalf of the company is, for example, determined in such a way that certain executives are entitled to act solely in relation to some matters and for other matters, two executives must act jointly – if this is registered in the Commercial Register, then it will be effective in respect of third parties, this also applies in respective of a multi member board of directors in an a.s. Restrictions are not effective on third parties, so any breach only gives rise to managers’ liability. There are no specific restrictions on foreign managers.
Directors’ and officers’ liability
Directors and board members must, in particular:
- Act with the duty of care of a prudent business manager.
- Act in the best interests of the company.
- Keep the shareholders informed about matters related to the company.
Directors/board members may be personally liable for:
- Damage caused to the company resulting from a violation of their duties (which also applies in the event of the company’s insolvency).
- Administrative or criminal offences.
- A director’s liability cannot be limited by agreement with the company, any such arrangement is null and void.
Taxes on corporate income and gains
Corporate income tax
Tax resident enterprises are subject to tax on their worldwide income. An enterprise is considered to be a tax resident enterprise if it is incorporated in the Czech Republic or if its management is located here. Czech non-resident enterprises are taxed on their income sourced in the Czech Republic only and such taxation may be limited by respective tax treaty. The standard corporate income tax rate in the Czech Republic is 19 %.
Companies may select a calendar year or a fiscal year as its tax year. Tax declarations must be filed within three months after the end of the tax year. Companies that are subject to a statutory audit or are using a certified tax advisor for preparation and submission of the declaration are automatically granted a three-month extension.
Capital gains realized by a Czech or another EU parent company on the transfer of shares in a subsidiary established in the Czech Republic or another EU country are exempt from tax if the parent company maintains a holding of at least 10 % of the subsidiary for an uninterrupted period of at least 12 consecutive months. Capital gains realized by a Czech or EU parent company on the transfer of shares in a subsidiary in a contracting country (that is a third country that has entered into a tax treaty with the Czech Republic) are also exempt from tax if the following conditions are met:
- The subsidiary has a legal form comparable to a Czech joint-stock company, a limited liability company, a cooperative.
- The parent company has held an ownership interest of at least 10% in the subsidiary for at least 12 consecutive months (this condition may be fulfilled subsequent to the date of the transfer).
- The subsidiary is liable to a tax similar to corporate income tax at a rate of at least 12% in the tax period in which the parent company accounts for the respective capital gain and in the preceding tax period.
If any of the following circumstances exists the tax exemption does not apply:
- The parent company or the subsidiary is exempt from corporate income tax or similar tax applicable in its jurisdiction.
- The parent company or the subsidiary may opt for an exemption from corporate income tax or similar tax applicable in its jurisdiction.
- The parent company or the subsidiary is subject to zero corporate income tax or similar tax applicable in its jurisdiction.
Other realized capital gains are included with other taxable income and taxed at the regular corporate income tax rate.
Generally, dividends are subject to a final withholding tax at a rate of 15 %. The tax rate is increased to 35 % for dividends paid to Czech tax non-residents from countries outside the EU and European Economic Area that have not entered into a double tax treaty with the Czech Republic or a bilateral or multilateral tax information exchange agreement that is binding on both the Czech Republic and the respective foreign country. However, dividends paid by Czech companies to parent companies that are located in EU countries are exempt from withholding tax based on the EU Parent-Subsidiary Directive, i.e. if the parent company maintains a holding of at least 10 % of the distributing company for an uninterrupted period of at least one year. Dividend distributions between two Czech companies are exempt from tax under similar conditions.
Interests and royalties
Interests and royalties sourced in the Czech Republic are generally subject to withholding tax in the Czech Republic at 15 % tax rate. However, the exemption applies if the recipient is a foreign corporation that is eligible for the benefits arising from the EU Interest-Royalty Directive. Moreover, recipients who are tax residents of countries with which the Czech Republic concluded respective double tax treaty may usually benefit from lower tax rate provided that they are actual beneficial owners of received interests or royalties.
In the absence of income tax treaties and also in the event that a person does not qualify for treaty benefits that would be otherwise available, the withholding tax rate is 35 % of the gross interest or royalty income
Personal income tax
The income that is subject to taxation in the Czech Republic is all income for tax residents and all income from source in the Czech Republic for tax non-residents. Personal income tax is paid by employees, self-employed individuals and other individuals realizing annual income higher than CZK 15,000 which not exempt from tax and not subject to a withholding tax. The personal income tax rate is flat rate of 15 % and is applied on both active and passive income (e.g. capital gains, dividends, interests). The employees tax base (called “super-gross income”) consists of the employment income and the social security and health insurance contributions paid by the employer in the Czech Republic, in the European Union, European Economic Area or in the Swiss Confederation). In addition, the annual employment income and self-employment income exceeding 48 times the amount of the average wage in total (e.g. CZK 1 672 080 for the year 2020) is subject to a so-called solidarity surcharge amounting to 7 %.
Individuals who received income exempt from personal income tax where such income was higher than CZK 5 million in an individual case are required to notify the tax authority of such fact. Not announcing of the tax-exempt income is penalized.
Value-added tax (VAT)
VAT is levied on all taxable supplies (goods and services), acquisitions of goods from other EU member states and imports of goods. Standard rate applicable to most goods and services is 21%.
Reduced rate applicable to specified goods and services (for example to food and beverages, plants) and it amounts to 15%. Second reduced rate applicable in particular to accommodation services, books, pharmaceuticals and baby food and it is 10%.
Real estate tax
Real estates located in the Czech Republic are subject to real estate tax which applies on a yearly basis.
Road Motor Vehicles tax
If the taxpayer uses a road motor vehicle registered in the Czech Republic for business purposes, as well as trucks with a maximum gross weight exceeding 3.5 tonnes regardless of their use, the taxpayer is liable to pay road tax.
Social security and health insurance contributions
Income from employment and self-employment activities is subject to the social security and health insurance contributions. In case of employees it consists of the amounts paid by the employee and the employer. The amounts are calculated from gross wage of the employee. The person responsible for transfer of the contributions to the respective Czech institution is employer. Self-employers pay the advances for social security and health insurance by themselves to the relevant institution on a monthly basis.
Social security insurance
Employer 24.8 %
(maximum assessment base is CZK 1 672 080 in 2020)
(no maximum assessment base applies.)
Social security 29.2 %
Health insurance 13.5 %
Covid- 19 Czech Government Support Measures for Business in 2020
As the Covid-19 pandemic unfolded around the world from March 2020 onwards, the Czech government introduced a variety of business support measures to support employers and business entrepreneurs. These legislative measures are being amended and/or being phased in and out in real time, please visit our Covid-19 blog for a current overview of applicable Czech government Covid-19 measures affecting business. https://www.ksb.cz/covid/en