Kocián Šolc Balaštík > Prague, Czech Republic > Firm Profile
Kocián Šolc Balaštík Offices
PRAGUE 1
JUNGMANNOVA 745/24
110 00
Czech Republic
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Kocián Šolc Balaštík > The Legal 500 Rankings
Czech Republic > Banking, finance and capital markets Tier 1
Boasting a comprehensive banking, finance and capital markets practice, the team at Kocián Šolc Balaštík handles the full spectrum of domestic and international transactional work, which includes debt issuances, regulatory capital raisings, and special lending products. Additionally, the firm has demonstrable experience in advising financial institutions and non-banking corporations on financial regulation concerns, as well as digital financial services products. The department also covers project finance and real estate finance. The firm is regularly engaged to advise the Czech National Bank on various matters. On the capital markets front, the group counts investment fund services, securities issuances, and the regulation of investment and compliance services within its core workload. Martin Krejčí, an expert in cross-border financial work, leads the team alongside Vlastimil Pihera, a specialist in financial services and private equity matters, and Petr Kasík, who primarily handles corporate law and restructuring cases.Practice head(s):
Martin Krejčí; Vlastimil Pihera; Petr Kasík
Testimonials
‘Vlastimil Pihera is a truly exceptional figure in the Czech Republic’s capital markets space. He enjoys respect among professionals while remaining approachable to his clients. His active involvement in shaping legal frameworks, coupled with his international perspective, sets him apart. We are delighted to have the privilege of benefiting from his services.’
‘A top-notch team in the Czech Republic. I worked with several firms in the Czech Republic on such matters and no other firm came even close to them. They are outstanding and amazingly skilled not only in “basic” LMA financing but especially with issues concerning the finance regulatory framework.’
‘Vlastimil Pihera is a top-notch banking and finance lawyer, he understands the complexity of the regulatory framework and the connections between different areas.’
‘Great attitude, great experience, great value for money.’
‘Vlastimil Pihera is always there, he offers a unique client experience. We can fully rely on him. His advice and guidance is always excellent.’
‘KSB provided excellent legal services, taking into account the specificities of the financial sector. Their advice was very complete and at the same time pragmatic.’
Key clients
Amista
ARETE Group
Avant Financial Group
Česká spořitelna
ČSOB
Czech Association of Financial Advisory and Intermediation Companies
General Electric
Gorejnska banka
J&T Banka
J&T IB and Capital Markets
J&T ARCH INVESTMENTS
J&T Real Estate (and its subsidiary JTZE)
Mattoni 1873
Nation1 GP
National Development Bank of the Czech Republic
National Development and Investment Company
Lázeňský fond SICAV
Pražská plynárenská (Prague gas supplier)
Redside Investment Company
Sayfor
Trinity Bank
Work highlights
- Advised J&T Real Estate and its subsidiary JTZE on the financing of the acquisition of Spearhead’s Czech and Slovak subsidiaries, bolstered by a consortium of major Czech banks, including Komerční banka, Raiffeisenbank, and UniCredit Bank Czech Republic and Slovakia.
- Advised Trinity Bank on the refinancing of Julius Meinl Group’s company, which owns Julius Prague, a collection of 168 residences.
- Advised J&T ARCH INVESTMENTS fund on the acquisition of the final 10.37% stake in the registered capital and voting rights of MONETA Money Bank.
Czech Republic > Dispute resolution Tier 1
Noted for its regular involvement in landmark cases, Kocián Šolc Balaštík’s dispute resolution offering specialises in the telecoms, pharmaceutical, chemistry, and media industries. Recognised for its strengths in international arbitration and EU law, the firm regularly appears before not only domestic courts of all levels, but also the European Court of Human Rights. The team operates under the joint leadership of Pavel Dejl, who specialises in insolvency and competition disputes, and Sylvie Sobolová, who handles claims relating to public procurement issues, administrative proceedings, and state aid cases.Practice head(s):
Pavel Dejl; Sylvie Sobolová
Testimonials
‘Exceptional ability to approach the dispute, identify key points, come up with relevant arguments and explain very complex topics to the court.’
‘Pavel Dejl has a very strong personality and excellent legal knowledge and communication skills. He is able to deliver a case-specific approach.’
‘Great communication, partners are well qualified and easy to reach.’
‘Sylvie Sobolová is professional and an expert.’
Key clients
O2 Czech Republic
AGROFERT and group companies (Primagra, Mlékárna Hlinsko, Schrom Farms)
Český rozhlas (Czech Broadcasting radio)
Česká televize (Czech Television)
IMCoPharma
Mattoni 1873
PPF Group
Asiana Transport
United Bakeries
PRECHEZA
Tapas Borek
REMA PV Systém
Czech Republic > Tax Tier 1
Kocián Šolc Balaštík is recognised for handling a wide range of matters, including the taxation of intangibles and the personal income tax of residents and foreign nationals. With expertise in advising on cross-border tax elements of business restructurings and international holding structures, the firm also assists clients with private equity and pension fund investments. Elsewhere, the group advises on tax-related litigation and VAT claims in relation to TV and radio fees. The practice is co-led by Jan Černohouz, who specialises in corporate tax, and Helena Navrátilová, who is often instructed by international tax proceedings to cover tax administration and proceedings.Practice head(s):
Jan Černohouz; Helena Navrátilová
Testimonials
‘The team is knowledgeable and adopts a pro-client approach when it comes to availability.’
‘They understand our business well, respond quickly and communicate well.’
‘KSB has the tradition of being based on conservative values, but yet being able to accommodate towards modern environment and new technology fields.’
‘Jan Černohouz is extremely approachable and has vast experience in tax matters. He is a pleasure to communicate with and he communicates complex matters clearly.’
‘Jan Černohouz is approachable, has attention to detail, and articulates complex matters clearly.’
Key clients
Rockaway Group of companies
Avast Software
Ronaldsay BV
Česká televize (Czech television)
IHI Towers
YIT Stavo
Mattoni 1873
SAVENCIA SERVICES EUROPE
Vodafone
LABORATOIRES URGO HEALTHCARE
REMA Group
Blue Peak
FCA Bank
Vodafone
AGPI
Vrgineers
Silkes Winekeller
SFG Holding
Czech Republic > Commercial, corporate and M&A Tier 2
The corporate, commercial and M&A team at Kocián Šolc Balaštík advises on a range of matters, including local and foreign acquisitions, shareholder arrangements, joint ventures, and regulatory concerns. The firm counts start-ups, financial institutions, and banks among its key clients. The group regularly carries out due diligence exercises in addition to preparing and negotiating transaction documents. The practice is collectively led by restructuring specialist Dagmar Dubecká; Martin Šolc, who is noted for his involvement in milestone M&A transactions; Jan Dědič, whose corporate expertise spans the gamut of relevant issues; and Petr Kasík, who focuses on banking law.Practice head(s):
Dagmar Dubecká; Martin Šolc; Jan Dědič; Petr Kasík
Testimonials
‘We have had the pleasure of collaborating with KSB on numerous transactions, and we are truly delighted to have such a strong and reliable partner. They demonstrate exceptional proficiency in managing complex transactions from start to finish.’
‘Jan Dědič is a well-known specialist for corporate law among Czech lawyers.’
‘They understand my client’s business, needs and demands very well and therefore, they always provide feasible solutions to us.’
‘Good business acumen.’
Key clients
J&T Group
Seyfor
Sanberg Capital
PasserInvest Group
M&M Reality
Heureka Group
ARETE Group
Yeong Chin Machinery
Ronaldsay
Heineken Česká Republika
PPF Real Estate
Orienta Czech
Very Goodies
Energo Loučovice
RAFA Laboratories
Asental Land
Brentwood Industries
Work highlights
- Advising J&T Arch Investments on the acquisition of a stake in Moneta Money Bank.
- Advising J&T Banka on its entry and subsequent acquisition of a majority share in AMISTA investiční společnost from CINEKIN.
- Advising Seyfor on several acquisitions of IT companies.
Czech Republic > EU and competition Tier 2
Kocián Šolc Balaštík’s extensive EU and competition practice operates across the IT, food and catering, retail, and agricultural sectors. The team routinely advises clients on significant merger proceedings on the Czech market, often in front of the Czech Competition Authority as well as domestic administrative courts. The group also offers guidance on state aid-related competition concerns and cases connected to the abuse of dominant market positions. Elsewhere, the firm is recognised for its experienced compliance training team, which entails coordinating dawn raid work. The department is co-led by Pavel Dejl, who frequently handles merger and antitrust proceedings before the European Commission, and Sylvie Sobolová, who primarily provides competition law advice in the pharmaceutical and automotive industries.Practice head(s):
Pavel Dejl; Sylvie Sobolová
Other key lawyers:
Martin Vráb
Testimonials
‘Excellent communication. The team operates well and has great success in disputes.’
‘Pavel Dejl has achieved significant victories and is well-regarded for his extensive experience in competition law. In addition to his expertise in high-profile merger proceedings, he is well-recognised for handling matters concerning abuse of dominance investigations and appeals against fines imposed by the Czech Competition Authority.
‘Partners are well qualified, easy to reach and offer great value for money.’
‘Sylvie Sobolová has great experience and know-how in the field, with the ability to assess potential business consequences.’
Key clients
JTZE (J&T Zemědělství a Ekologie)
Seyfor
Sandberg Capital
Asiana Transport
Aramark
O2 Czech Republic
Skanska Czech Republic
Agrofert
INTERGRAM
Leo Express Global
Work highlights
- Representing JTZE in merger control proceedings before the Czech Competition Authority regarding an acquisition of the Czech and Slovak agricultural portfolio of the Spearhead Group.
- Representing Seyfor in several significant merger control proceedings before the Czech Competition Authority.
- Representing Asiana in court proceedings against a competitor for damages caused to the client by the competitor’s anticompetitive behaviour on the market of personal bus transport.
Czech Republic > Intellectual property Tier 2
Kocián Šolc Balaštík’s intellectual property offering is reputed for its strengths in the IT and e-commerce sectors, and has demonstrated recent growth in the regulation of web platforms and non-personal data protection. The group guides clients through all IP issues, such as unfair competition, disputes relating to the unauthorised use of protected real estate projects, regulatory concerns, and software licensing agreements. The team is co-led by Sylvie Sobolová, who also covers competition and public procurement work, and Drahomír Tomašuk, who advises on TMT and M&A-related IP cases. Petra Mirovská is a key contact within the department and has extensive experience in litigation relating to trade secrets.Practice head(s):
Sylvie Sobolová; Drahomír Tomašuk
Other key lawyers:
Petra Mirovská; Milada Kürtösiová
Testimonials
‘Excellent approach, perfect knowledge of the legal procedures and techniques, and delivers excellent results.’
‘Petra Mirovská can deliver long-term, consistent legal solutions. She offers detail-oriented adherence to procedures, which our opponents subsequently have a problem with.’
‘We are always satisfied with KSB’s services. Milada Kürtösiová is always professional, has a good knowledge of the law, and extensive practical experience.’
‘A professional team and it is a pleasure to deal with them.’
Key clients
Bjarke Ingels Group A/S
Sandberg Capital
Seyfor, a.s.
REMA AOS
Dobrobot Foundation Fund
Mattoni 1873, a.s.
Pivní lázně Praha, s.r.o.
Bydlení bez kauce s.r.o.
Henning Larsen
Asental Group
REMA Systém
Národní divadlo – Czech National Theatre
Radio Free Europe
Bakala Capital
Work highlights
- Assisting Bjarke Ingels Group in preparing and negotiating the contractual documentation for the architectural study, project documentation, and related activities for the Vltava Philharmonic Hall project.
- Advising Sandberg Capital on a major IT and education transaction, specifically on its investment in the Czech kindergarten management application Twigsee.
- Assisting Seyfor, in a significant IT acquisition focused on expansion in the Slovak market, acquiring vehicle monitoring company Commander Services from PosAm.
Czech Republic > Employment Tier 3
The employment practice at Kocián Šolc Balaštík operates across a wide range of industry sectors, most notably IT, retail, healthcare, and manufacturing. The firm advises on various employment and labour issues such as terminations, workplace injuries, business immigration and the transfer of employees, and the investigative procedures of employment authorities. Recently, the group has demonstrated activity in handling collective bargaining and trade union-related concerns, as well as assisting clients in navigating their ESG responsibilities. Václav Rovenský leads the team and also offers know-how in the real estate, energy, construction, and public procurement sectors.Practice head(s):
Václav Rovenský
Other key lawyers:
Michal Hanuš; Martin Štefko
Testimonials
‘The team works internationally and is well-connected to the international employment market.’
‘Among other things, KSB provides us with advice in more complex cases, through its highly specialized experts. Their approach is complex with an explanation of the options, advantages, and disadvantages. The legal services are provided without delay and with a deep knowledge of the legislation and case law. Their approach is very welcoming, kind and professional in every respect.’
Key clients
Lidl Česká republika
BAKALÁŘI software
Dr. Andre Ridder
Mango
URGO Healthcare CZ
Corinthia Panorama
Imperial Brands plc/Addleshaw Goddard
SIGMA SOLUTIONS
UNILIN CZECHIA
Advant Beiten
ABS JETS
National Theatre
National Theatre
Work highlights
- Assisting Bakaláři Software with their new set up of HR documents and with the revision and audit of existing ones.
- Assisting Mango with the transition of their employees.
- Assisted Corinthia with a number of employment law related issues such as the reorganisation of their tax and accounting departments.
Czech Republic > Projects and energy Tier 3
At Kocián Šolc Balaštík, the department’s scope of work includes the planning, development, and implementation of heat and power generation instalments, and the construction of power facilities. Additionally, the team offers advice on the development of renewable energy sources, public contracts, compliance concerns, and energy project financing. Recent highlights include assisting clients with the operation of new power plants, nuclear waste management, and distribution grids. The team is jointly led by Václav Rovenský, who specialises in energy construction projects and related regulatory concerns, and Tomáš Sequens, who handles the environmental elements of commercial transactions. Sylvie Sobolová is a notable member of the group and covers public procurement and state aid work.Practice head(s):
Václav Rovenský; Tomáš Sequens
Other key lawyers:
Sylvie Sobolová; Petra Mirovská
Testimonials
‘Kocian Šolc Balaštík has a strong team of experts. For us, they communicated perfectly, responded quickly, and understood our deals and priorities.’
‘Tomáš Sequens is a great person.’
‘KSB has a strong team which deals with energy and environmental issues. They fully understand our commercial needs. They are quick and efficient.’
‘We work especially with Tomáš Sequens who is pretty capable of answering all our questions (which are sometimes very complex). We also work with Petra Mirovská, who I respect when it comes to litigation issues.’
‘Partners are well qualified, easy to reach and offer great value for money.’
‘The team always tries to provide us with the best possible legal and business advice.’
‘Tomáš Sequens is always helpful and proactive. He is an excellent professional and more than reliable partner. He is a great legal advisor and helps our company to stay updated when it comes to legal changes that affect our daily business.’
‘Tomáš Sequens’ environmental background is very useful for our legal cases.’
Key clients
SE PPS Alfa
Smart Energies Group
Asental Group
Czech Radioactive Waste Repository Authority
Green Gas DPB
Rema System, Rema Battery
Tapas Borek
Teplárna Kladno
Energy Ústí nad Labem
Carthamus
Benthem Crowel Architects
William Matthews Associates
Bjarke Ingels Group (BIG)
Work highlights
- Advised SE PPS Alfa regarding a new a diesel power plant project, which would supply ancillary support services to CEPS, the operator of the Czech transmission grid.
- Advised Smart Energies Distribution, the member of the Smart Energies Group in connection with the operation of distribution grids.
- Advised Asental Land in relation to the construction of new solar parks in Ostrava region.
Czech Republic > TMT Tier 3
Kocián Šolc Balaštík’s TMT offering is broad ranging and assists clients from a broad range of sectors, including IT, satellite telecoms, finance, media, energy, and automotive. The firm handles software development work, cybersecurity and regulation matters, compliance concerns, and IT outsourcing. Additionally, the team has demonstrable experience in the set-up of e-commerce platforms, data protection matters, and transactional advice. The group is co-led by Drahomír Tomašuk and Sylvie Sobolová, who share a wealth of experience between them, particularly in IP, competition, and IT cases. Associate Jaroslav Zahradníček focuses on e-commerce and consumer protection law.Practice head(s):
Drahomír Tomašuk; Sylvie Sobolová
Other key lawyers:
Key clients
Seyfor
Sandberg Capital
Heureka Group
European Union Agency for the Space Programme (EUSPA)
Intefi Capital
Flatform
Dobrobot
NTT Cloud Communications
IPC Systems
Deutsche Telekom
Mercedes Benz / Daimler Truck
ŠKODA AUTO
Dahua Technology
O2 Czech Republic
Work highlights
- Leading a consortium which provides advice to the European Union Space Programme Agency (EUSPA), which manages various observation and communication programmes.
- Assisting new start-up Flatform with the set-up of their platform.
- Assisting in the founding of Dobrobot, which aims to connect non-profit organisations, companies, and donors through digital technologies and online auctions.
Czech Republic > Real estate and construction Tier 4
Kocián Šolc Balaštík’s real estate practice has recently been active handling a range of development projects, the construction of solar parks, and the sale and acquisition of multiple administrative buildings in Prague. Regularly engaged by hotel developers and logistics and warehouse companies, the team has strength in advising architectural studios on contract negotiation and project documentation. The group is co-led by Jiří Horník, who primarily advises real estate investment companies, and Václav Rovenský, who focuses on highway construction mandates and the management of hotels.Practice head(s):
Jiří Horník; Václav Rovenský
Other key lawyers:
Jakub Porod; Zuzana Slabá
Testimonials
‘Deep knowledge of local legislation, able to find all relevant details, and proposes client-oriented recommendations.’
‘Jiří Horník has a strong knowledge of relevant legislation and case law.’
‘This firm provides a wide range of legal services, from checking everything carefully to preparing the necessary documents and completing the deal. Their detailed approach makes business negotiations easier and helps us successfully complete our transactions. They explain legal risks in a way that’s easy to understand and always support us.’
Key clients
JTZE (J&T Zemědělství a Ekologie)
Bjarke Ingels Group (BIG)
Passerinvest Group
ARETE Group
Ronaldsay B.V.
National Theatre
Asental Group
VGP Group
Trammel Crow
B&K nemovitostní
Benthem Crowel Architects
William Matthews Associates
WIC Prague
Benthem Crowel Architects
Work highlights
- Advising JTZE (J&T Zemědělství a Ekologie) on the acquisition from Accession Capital Partners of a total of 11 companies across different regions in the Czech Republic and Slovakia and belonging to the Spearhead Group.
- Representing Bjarke Ingels Group (BIG) in the preparation and negotiation of a contract for an architectural study, project documentation and related activities for the Vltava Philharmonic Hall project.
- Advising VGP in negotiating lease agreements for commercial premises in several European countries.
Kocián Šolc Balaštík > Firm Profile
Firm overview: For over three decades, KŠB, a four-time recipient of the prestigious Chambers Europe Award for Excellence, has been an acclaimed market leader, creating innovative and groundbreaking legal solutions for its clients involving new legislation and legal and business concepts. A proudly independent Czech law firm, KŠB is globally interconnected through long-term relationships with other leading independent law firms, with whom it frequently works on cross-border transactions. Its mission is to strategically guide its global and domestic clients in attaining and exceeding their business objectives in the Czech Republic. Delivering commercially driven and sector specific advice, the firm is not just ready for the future, but actively facilitating it in the evolving 21st century business world for the benefit of its clients, whose success is the firm’s greatest satisfaction.
Main areas of practice
M&A: A market leader in M&A and a recognised 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. Recently, KŠB advised JTZE (J&T Zemědělství a Ekologie) on the acquisition of a total of 11 companies under Spearhead Czech and Spearhead Slovakia and JTZE (J&T Zemědělství a Ekologie) on the acquisition of a total of 11 companies under Spearhead Czech and Spearhead Slovakia. Other recent M&A transactions include work for Seyfor (formerly Solitea), Sandberg Capital, Yeong Chin Machinery, J&T Banka, Mattoni 1873 and Clayton, Dubilier & Rice.
Corporate: KŠB advises on establishing all types of companies, including Societas Europaea. Its services include company incorporation, facilitating board and general meetings as well as relationships between management bodies, making changes to companies’ financial structures, arranging financial assistance and implementing mergers, divisions, and transformations of various company and partnership structures (including cross-border). 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. Recently, the firm advised Solitea Group on one of the biggest intragroup mergers in the CEE region.
Banking and finance: KŠB advises on financial transactions as well as on banking and finance regulations and financial services disputes. It provides legal services to lenders, arrangers, security agents and borrowers on senior, subordinated as well as mezzanine and bridge financing. KŠB is highly rated for its regulatory expertise (it has been advising the Czech National Bank for almost 30 years), and is also covering new ground in FinTech. Its clients include Česká spořitelna (Erste group), Raiffeisenbank, CSOB (KBC group), National Development Bank of the Czech Republic, ING Bank, Unicreditbank, mBank, Generali, and J&T Banka. KŠB’s corporate clients in finance include members of the important entrepreneurs’ group in the CEE region, such as O2 Czech Republic, Mattoni 1873, Solitea, and Arete Group.
Securities and capital markets: KŠB advises issuers, shareholders and leading domestic as well as foreign investment banks and funds in the entire spectrum of securities and capital market deals. The focus of KŠB’s practice is mainly in the area of public and private issues of debt securities and investment fund structures. The most notable clients here are O2 Czech Republic, J&T Group, Arete Investment Group, Rockaway Group, and Ontex. KŠB also focuses on pioneering innovative solutions, such as the crowdfunding platform Fundlift, issuance of additional Tier 1 instruments for J&T Group, transformation of 3M FUND MSI to SICAV, and a side-pocket structure for Redside investment Group.
Competition: KŠB assesses potential anticompetitive agreements and alleged abuse of dominance. It also represents clients before the Czech and European Competition Authorities and the courts in all competition matters, including merger clearance procedures and leniency or settlement procedures. It was awarded the European Competition Case of the Year 2015 for its victory at the ECHR in which it represented DELTA PEKARNY regarding unlawful dawn raids in the Czech Republic. KŠB has recently been representing clients (such as Asiana and Leo Express Global) in private competition enforcement matters. Other competition clients include Mattoni 1873, Agrofert, the Czech National Bank, and Skanska.
Litigation and arbitration: Repeatedly recognised as one of the best practices in the Czech Republic, KŠB represents clients in civil and administrative courts and arbitration panels in all kinds of legal disputes, in particular relating to contracts, damages compensation, corporate matters, including invalidity of general meeting resolutions, employment law, unfair competition and infringement of intellectual property rights. Recently, KŠB has been representing O2 Czech Republic, Skanska, Leo Express Global, PPF Group, Czech National Theatre, Czech Television and Czech Radio, among others.
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 Teplárna Kladno, Carthamus, Green Gas DPB, Asental Land, Lovochemie, ENERGY Ústí nad Labem, and ČEZ.
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 has been advising a number of prestigious architectural studios, such as Bjarke Ingels Group, in the preparation and negotiating the architectural study contract, project documentation and other activities related to the Vltava Philharmonic project, William Matthews Associates, which won the international competition to design the building of the new headquarters of the Railway Administration in Prague or Benthem Crouwel Architects, winners of the international competition for the design of the new main station in Brno.
Aviation: KŠB is prized for its unique expertise in aviation, including aircraft financing, regulatory issues and claims handling. Its clients include ABS Jets, BBAM Aircraft Leasing, Cirrus Aircraft, easyJet, Macquarie Aviation, Prague Airport, and XL Insurance. KŠB also advises the EU Agency for the Space Programme (EUSPA) on issues linked with the deployment of the EGNOS, which provides augmentation to the standard GPS and Galileo signal.
TMT/IP/IT: KŠB advises and assists in connection with telecommunications law (regulatory matters), including advice on tenders and licensing 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 advises on compliance matters, including advertising and personal data protection. KŠB’s clients include O2 Czech Republic, CETIN, NTT Czech Republic, Dahua Technology, Daktela, Solitea Group, Deutsche Telekom, and Daimler.
Employment: KŠB advises on standard employment agreements, agreements for managers and top management, including service agreements, work assignments (secondments) and agency employment, as well as on relations with trade union organisations/employee councils and workplace injury-related matters. KŠB’s clients include ČEZ, AGC Automotive Czech, Czech Radioactive Waste Repository Authority, Lidl Česká republika, Mirantis, Akron Brass Holding, and the Czech National Theatre.
Tax: Recognised 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 and other transactions, corporate income tax, VAT and tax proceedings and disputes. KŠB is able to take advantage of mutual synergies, thus bringing undeniable benefits to clients (eg Czech Television, Rockaway, and Mattoni 1873).
Main Contacts
Department | Name | Telephone | |
---|---|---|---|
M&A, Corporate Restructuring | Dagmar Dubecká, Partner | ddubecka@ksb.cz | +420 224 103 316 |
M&A, Corporate Restructuring | Martin Šolc, Partner | msolc@ksb.cz | +420 224 103 316 |
Competition Law, Litigation & Arbitration | Pavel Dejl, Managing Partner | pdejl@ksb.cz | +420 224 103 316 |
Real Estate, Aviation | Jiří Horník, Partner | jhornik@ksb.cz | +420 224 103 316 |
Company Law, Insurance Law | Petr Kasík, Partner | pkasik@ksb.cz | +420 224 103 316 |
Banking, Project Finance including PPP | Martin Krejčí, Partner | mkrejci@ksb.cz | +420 224 103 316 |
Company Law, Mergers & Acquisitions | Jan Lasák, Partner | jlasak@ksb.cz | +420 224 103 316 |
Tax | Helena Navrátilová, Tax Partner | hnavratilova@ksb.cz | +420 224 103 316 |
Securities and Capital Markets, Investment Funds | Vlastimil Pihera, Partner | vpihera@ksb.cz | +420 224 103 316 |
Energy and Mining Law, Utilites Law, Construction Law | Václav Rovenský, Partner | vrovensky@ksb.cz | +420 224 103 316 |
Public Procurement and State Aid, Intellectual And Industrial Property Law | Sylvie Sobolová, Partner | ssobolova@ksb.cz | +420 224 103 316 |
TMT, Data Protection | Drahomír Tomašuk, Partner | dtomasuk@ksb.cz | +420 224 103 316 |
Projects & Energy, Environment | Tomáš Sequens, Partner | tsequens@ksb.cz | +420 224 103 316 |
Company Law | Jan Dědič, Partner | jdedic@ksb.cz | +420 224 103 316 |
Lawyer Profiles
Photo | Name | Position | Profile |
---|---|---|---|
Mr Pavel Dejl | Partner | View Profile | |
Ms Dagmar Dobecka | Partner | View Profile | |
Mr Jan Dědič | Partner | View Profile | |
Ms Hana Heroldova | Counsel | View Profile | |
Mr Jiri Hornik | Partner | View Profile | |
Mr Petr Kasik | Partner | View Profile | |
Mr Martin Krejci | Partner | View Profile | |
Mr Martin Kubik | Counsel | View Profile | |
Mr Jan Lasak | Partner | View Profile | |
Ms Helena Navratilova | Partner | View Profile | |
Mr Vlastimil Pihera | Partner | View Profile | |
Mr Ivo Prusa | Counsel | View Profile | |
Mr Vaclav Rovensky | Partner | View Profile | |
Mr Tomas Sequens | Partner | View Profile | |
Ms Sylvie Sobolova | Partner | View Profile | |
Mr Martin Solc | Partner | View Profile | |
Mr Drahomir Tomasuk | Partner | View Profile | |
Mr Jan Černohouz | Counsel | View Profile |
Staff Figures
Lawyers : 63 Tax advisors : 6Languages
English German Italian Russian French Slovak CzechMemberships
IBA (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 AssociationOther
:Notable Cases
- Assistance with establishing the Vlček Family Foundation, whose primary aim is to support palliative care for children. The founders are investing CZK 1.5 billion in the foundation, which makes it one of the largest philanthropic projects of its kind in the Czech Republic.
- Since 2018, KSB and three other European partners have been providing legal advice to the European Union Agency for the Space Programme (EUSPA), formerly the European Global Navigation Satellite Systems Agency, on the implementation of the GALILEO and EGNOS satellite programmes. GALILEO is a satellite navigation system designed to provide and deliver more accurate positioning information, which has significant benefits for a range of European services and users. EGNOS is a European regional augmentation satellite system (SBAS) used to improve the performance of global navigation satellite systems (GNSS) such as GPS and Galileo.
- Assistance to J&T Bank in financing the development of Twisto. In addition to J&T Bank, which provided a loan of CZK 450 million, the financing was also provided by venture debt fund Orbit Capital and its subfund Conseq Venture Debt, which is jointly operated by investment platform Enern and investment company Conseq.
- Advising US software company Jamf, which developed Jamf Pro, an application used to configure and automate IT management tasks for macOS, iOS, iPadOS and tvOS devices. KSB advised Jamf on its acquisition of Wandera, a software developer that provides protection against security threats on mobile devices to businesses all around the globe.
- Advising Solitea on the acquisitions of several IT companies, including D3Soft, AspectWorks, Mainstream, PRYTANIS and Techniserv IT, as well as advising Solitea on obtaining financing totalling approximately EUR 70 million.
- Assistance in the sale of Profimedia.CZ group, which offers images from all over the world. The acquisition includes the parent company Profimedia based in the Czech Republic and its subsidiaries in Hungary, Croatia and Romania.
- Advising ARETE investment and real estate group on securing EUR 30 million in financing from Raiffeisenbank.
- Advice on the issue of senior bonds by 3M Fund MSI, with the issue value reaching one billion Czech crowns (with the possibility of an additional increase to two billion Czech crowns). The bonds were successfully admitted for trading on the Prague Stock Exchange. Furthermore advising on the transformation of 3M Fund MSI into a SICAV investment fund – a fairly rare transaction in the Czech Republic.
- Advising AI Startup Incubator (a fund focused on AI start-ups) on investing in OpenRefactory and in AssetFloow.
- Advising on a major acquisition in the catering services sector. The client, Aramark, acquired the catering division of the Czech branch of French company Sodexo, which is engaged in providing services in the areas of canteens, catering, full-service building management, and the operation of food and beverage vending machines. As a result, Aramark has consolidated its leading position on the catering market in the Czech Republic.
- Assisting the Focus Estate Fund in the sale of the Centro Ostrava Retail Park in Ostrava and Most Retail Park in Most to the Czech investment group DRFG.
- Advising Titans Freelancers, a Slovak company engaged in outsourcing IT specialists, on the acquisition of a 75% stake in Czech-based Bridgewater.
- Advising J&T Agriculture and Ecology, a J&T Real Estate group company in acquiring shares in several companies that are engaged in primary agricultural production.
- Providing Mattoni 1873 with comprehensive legal advice during negotiations with Budějovický Budvar regarding a unique project for the production of flavoured non-alcoholic beer.
- Assisting VGP Group, a leading developer and owner of logistics centres, on a long-term basis, primarily on acquiring, selling, operating and leasing warehouses, manufacturing premises and office buildings. In 2021, KSB VGP in negotiating lease agreements for almost 180,000 sqm in the Czech Republic and over 141,000 sqm abroad (Slovakia, Hungary, Latvia).
- Advising on a record-breaking charity project: the founders of Walmark – brothers Adam, Mariusz and Valdemar Wałach – founded the 3WFoundation, in which they invested CZK 1.8 billion.
Diversity
Fairness, respect, equal access and opportunity are fundamental pillars of principle in the legal profession. Accordingly, KSB’s diversity and inclusion policy reflects such core values of our profession and we are fully committed to the goal of diversity and inclusion in the workplace. Everyone at KSB has a duty to act in accordance with the principles of the diversity and inclusion policy and must treat colleagues and third parties in a respectful, inclusive and non-discriminatory way.
Our firm aims to be a natural choice for talent, a true meritocracy where all can achieve their full potential, in an inclusive work culture that promotes equality and mutual respect, and embraces diversity. We understand and value that “talent” comes in many forms. We aim to be a supportive and inclusive employer.
We are committed to preventing any form of discrimination and encouraging diversity and providing equal opportunities for all. We recognize that diversity and inclusion make for a broader, richer environment which produces more creative thinking and reflects the world around us, including our many diverse clients.
Since our founding, we have prided ourselves on building a collegial atmosphere rather than an institutional corporate model. Mutual trust and understanding enables us to provide all of our associates with a level of flexibility that suits their particular needs. This enables us to attract the best talent and provide equal opportunities for all. We proactively support projects recognizing women in the Czech legal environment, such as Významné právničky (Outstanding Women Lawyers), which is announced annually by legal magazine Právní rádce. We also took part in 2021’s unique #PRVNICH100LET project, which celebrated the 100th anniversary of the first woman to graduate from law school and helped to bring together contemporary women of the legal world and public life. Our lawyers are also active in the Czech Bar Association’s Lawyers to Schools program (“Advokáti do škol”), which provides schools with inspirational materials and stories about the role of law and lawyers in everyday life. As part of the programme, our lawyers also reach out directly to children in primary and secondary schools, showing how a career in law is open to all and how knowledge of basic legal principles strengthens the rights of all citizens.
Chambers and Partners has nominated KSB for 2022’s Chambers D&I Awards in the Diversity & Inclusion: Outstanding Firm category. We see it as recognition of our long-standing natural approach to diversity in the legal profession.
Doing Business In
Czech Republic
As with other European economies, the economic impacts of the Russian invasion of Ukraine, particularly with regard to record high energy prices, impacted the Czech economy in 2022. Real GDP increased by 2.5% in 2022, according to the preliminary GDP release. The Czech economy benefited from strong investment activity and the Czech government retains its pro-business and pro-EU outlook. Inflationary pressures declined slightly towards the end of 2022 on the back of government measures to mitigate the impact of high energy prices. Economic growth in Czechia is forecast to stagnate in the first quarter of 2023 and to resume growth from the second quarter onwards, reaching its pre-pandemic level in 2023-Q4. Overall, GDP growth is forecast at 0.1% in 2023 and 1.9% in 2024. Standard & Poor’s credit rating for the Czech Republic is AA-, whilst Moody’s Analytics rating is Aa3.
Current investment trends and active sectors of the Czech economy
Strong investor activity in IT/technology, real estate continues to dominate the Czech economy post pandemic. Czech tech entrepreneurs and systems developers have shown great innovation and gained a leading reputation, which are highly sought after by investors. Business information systems in the areas of ecommerce, logistics, data centres, cloud systems, cybersecurity, payments systems, learning and games are all areas which have seen strong activity with sustained potential for growth. The pandemic accelerated digitalisation in all sectors of the economy and the excellence of the Czech tech sector as well as the motivation of companies not to fall behind in adopting digital solutions makes it likely that the tech sector will continue to be a key driver of M&A activity.
Pursuant to information by CzechInvest, the government investment agency, in 2022, investments in the Czech Republic according to country of origin and no of projects were as follows:
22% Czech Republic origin, 20% Germany, 13% USA, 7% Japan, 5% Great Britain, 5% Netherlands,4% Switzerland, 4% Austria, 3% France, 3% Italy and 17% others.
There is currently a generational handover occurring on the commercial landscape in the Czech Republic as family firms are handed over after 25 -30 years of development or if there are no successors – then the family firms are being sold, this tier of investment is predominantly medium sized enterprises and is keenly sought after by investors seeking high quality established companies.
Strategic reasons that make the Czech Republic attractive for investors:
- Central location
The Czech Republic is conveniently located at the geographical centre of Europe.
- EU Membership since 1 May 2004
The Czech Republic has been a magnet for large volumes of foreign investment since the country’s so called Velvet Revolution” in 1989. 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.
- 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. Economic commentators expect a similar strong recovery from the Covid era economic downturn and growth rates and a strong bounce back in transaction levels already supports this.
- 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 amongst the lowest in Europe many years, in January 2023 it was 2.6%.
- 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.
- 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
Pursuant to the 2021 Cushman & Wakefield Global Manufacturing Risk Index, the Czech Republic is the no. 1 country in Europe for manufacturing, based on operating conditions and cost competitiveness and on a global scale the Risk Index ranks the Czech Republic as no. 5, closely following the top manufacturing destinations of China, India, USA and Canada.
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 World Bank’s “Ease of Doing Business” ratings ranks the Czech Republic as no. 41 globally, within the category of “Very Easy to Do Business”.
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.
- Possibility of Investor Visa for non- EU nationals
One of the categories of visa available in the Czech Republic is the so-called Czech „investor visa“ (for third country nationals, i.e. non- EU citizens). The main conditions for granting of this investor visa are (i) creation of at least 20 full-time jobs (for EU-citizens) and (ii) investment in the amount of at least CZK 75.000.000 (approximately EUR 2.850.000 or USD 3.250.000), whereby the whole amount does not have to be invested in cash, up to 60 % of this amount can be provided through assets (tangible or intangible)– e.g. machinery, real property, know-how etc.
- 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.
Foreign Investment Screening Act
From 1 May 2021, a new Czech Foreign Investment Screening Act is in force, introduced as a result of the EU Foreign Investment Screening Regulation that entered into effect in April 2019 The Czech act introduces a level of vigorous screening for non- EU investments in the Czech Republic, overseen by the Ministry of Industry and Trade. The scope of investments or activities triggering review under FDI rules is considerably broad and foreign investors will need to stay vigilant to maintain compliance as even activities such as nominating new company directors may trigger FDI rules. The FDI rules require very particular assessment by all non-EU investors because in fact there is no simple financial threshold or any sector of the economy that can be 100% ruled out from the application of the rules.
The FDI rules apply not just to the standard “third country” non-EU countries but will apply also to include Switzerland and members of the European Economic Area, such as Lichtenstein and Norway, as well as post Brexit United Kingdom. FDI clearance now needs to be considered, where applicable, as an additional condition for effectiveness of a transaction. Accordingly, transaction negotiations will need to reflect the timeline obligations for FDI clearance, in a parallel fashion to the manner in which competition office clearance is already factored into timelines.
The Ministry of Industry and Trade issued its First Annual Report in respect of the Czech FDI Act in May 2022 to provide a review of the inaugural year of operation. The Ministry does not review all foreign investments in the Czech Republic; only those FDI investments that investors self-declare either on the basis of mandatory requirements under the FDI Act or alternatively a request for a voluntary consultation with the Ministry under the FDI Act to gain legal certainty as to their investment vis-a-vis the FDI Act.
As at the date of the report (May 2022), no investments had been prohibited or had conditions imposed. A total of 8 out of 10 completed cases were approved, in two cases investors withdrew their application and the investment did not ahead, as at 30 April 2022 two cases had not yet been closed.
Out of the investments reviewed by the Ministry, five were from the USA, two from the UK and one from each of China, Singapore, Russia, Taiwan and Malaysia. The majority of investors were funds (7 cases), four investors were companies and only one investor was an individual person.
Industry sectors of the assessed investments included telecommunications, chemical industry, aviation, healthcare, IT, biotech, water supply and engineering.
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.
Ownership Interest/Shares/Bonds
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 was allowed to appoint also a second body of the company, a Statutory Director However as of 1 January 2021, the monistic a.s. can no longer create the office of a Statutory Director and the single permitted 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 Board 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 restrictions
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 %.
Administration
Companies may select a calendar year or a fiscal year as its tax year. Tax declarations must be filed within four 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 two-month extension.
Capital gains
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.
Dividends
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.
Interest and royalties
Interest 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 15 % for annual income lower than 48 times the amount of the average wage in total (e.g. CZK 1 701 168 for the year 2021) and 23 % for the income exceeding this threshold. The tax rates are applied on both active and most of the passive income..
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. Failure to announce such 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%. A second reduced rate of 10% is applicable in particular to accommodation services, books, pharmaceuticals and baby food.
Real estate tax
Real estate located in the Czech Republic is subject to real estate tax which applies on a yearly basis. Real estate transfer tax has been abolished as of December 2019.
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-employed persons pay the advances for social security and health insurance themselves to the relevant institution on a monthly basis.
Employees
Social security insurance
Employer 24.8 %
Employee 6.5%
(maximum assessment base is CZK 1 672 080 in 2020)
Health insurance
Employer 9%
Employee 4.5%
(no maximum assessment base applies.)
Self-employers
Social security 29.2 %
Health insurance 13.5 %
For real time Czech legal updates, please follow our KSB page on LinkedIn https://www.linkedin.com/company/kocian-solc-balastik
Interviews
Václav Rovenský, Partner
What do you see as the main points that differentiate KŠB from your competitors?
Our firm prides itself on being a fully independent Czech national firm, with a long tradition of the highest standards of professional ethics and promoting the rule of law in the community, whilst simultaneously competing on the same level as the many leading international law firms in the Czech Republic. In 2017 and 2018, Martin Šolc, one of our founding partners, served as the President of the International Bar Association, the only lawyer to date from Central/Eastern Europe to have achieved this highest office in the IBA, which is also a testament to the respect granted to our law firm.
Despite, or perhaps because we are, strongly independent, KŠB has forged a valuable network of long term relationships with law firms around the world, including as a founder member of the World Services Group and also as a long term member of a number of other leading specialty law firm alliances. In this way we can provide seamless and verified truly global service to our local clients and vice versa.
When it comes to client work, our law firm is one of only a few to provide truly integrated tax and legal services which is of great benefit to clients but the many years of expertise of our lawyers and tax advisors means that we have been involved in creating legal solutions on numerous occasions, which can be described as ground-breaking or innovative, and we aim to put these solutions into practice as either the very first law firm or as one of the first. Our client mission is to proactively help a client bring a business vision into clear tangible focus, with the necessary safeguards to make it a working commercial reality.
Which practices do you see growing in the next 12 months? What are the drivers behind that?
We are focusing strongly on the official rollout and strengthening of our ESG practice this year. ESG matters are becoming increasingly important for business worldwide for several reasons.
Firstly, there is a growing recognition that businesses have a responsibility to consider their impact on society and the environment, beyond simply maximizing shareholder value. As a result, investors, employees, customers, business partners and other stakeholders are increasingly demanding that companies demonstrate their commitment to sustainability, social responsibility, and ethical governance.
Secondly, there is a growing regulatory focus on ESG matters, especially within the EU, with many countries and regions introducing new laws and regulations aimed at promoting sustainability, reducing carbon emissions, protecting human rights, and ensuring good corporate governance. This is leading to increased compliance costs and risks for businesses that fail to meet ESG standards. Within the EU there is now a complex body of ESG focused regulations being implemented, including the EU Taxonomy, the CSRD (Corporate Sustainability Reporting Directive) and the SFRD (Sustainable Finance Disclosure Regulation), all of which present new challenges for clients.
Thirdly, ESG matters are increasingly seen as key drivers of long-term business success. Companies that effectively manage ESG risks and opportunities are more likely to build resilient, sustainable business models, attract and retain talent, and maintain the trust of their stakeholders.
Overall, these factors are driving a growing awareness of ESG matters and the need for businesses to take them seriously. As a result, ESG is rapidly becoming a mainstream legal as well as business issue, with significant implications for companies, investors, and society as a whole and our clients are seeking our legal guidance in how to find their ESG pathway.
What’s the main change you’ve made in the firm that will benefit clients?
It’s not only about excellent knowledge and understanding of the law, but staying abreast of new technology and business environment changes is crucial to being the proactive and reliable business minded lawyers that our clients are looking for. High quality in house training on business and technology issues for our lawyers, as well as regular international knowledge updates and best practices exchange by means of KŠB’s close knit global legal networks and specialty seminar attendances are the ways we keep up to date to best advise our clients in a rapidly changing world.
From time to time we introduce new practice areas in response to business environment changes, that will benefit our clients. In recent years this has included the establishment of KŠB accounting s.r.o., our client bookkeeping and payroll service, that complements our dual legal and tax service offerings. This year, as well as developing our ESG practice (as outlined above), we are also making a distinction in our M&A practice group to create a stand alone Private Equity section, which reflects the dynamic growth of venture capital and PE deals on the Czech market.
Is technology changing the way you interact with your clients, and the services you can provide them?
Ever since the introduction of e.g. email, technological advances have moulded and refined the scope of law firm-client interactions. The Covid era brought a quasi-revolution in terms of online video meetings that continue to be embraced today not just for convenience but also in terms of reducing carbon footprint and enhancing face to face time and live document sharing with clients and colleagues around the world. The trends in application of AI technology to the legal environment are enabling us to explore many possibilities of use to benefit our clients, including AI assisted document review for due diligence, contract management systems and specific transaction and regulatory compliance tools, just to give a few examples. Technology and AI seem to expand at an exponential pace, and lawyers should not fear the uncharted future, but proactively embrace it as the only meaningful distinction in the future will be lawyers who know how to harness the benefits of technology and will be able to balance these benefits with legal thinking and experience, and those who can’t and will, most likely, lose out. That being said, I should note that this is increasingly difficult to do for lawyers who have been practicing for over thirty years like myself.
Can you give us a practical example of how you have helped a client to add value to their business?
Last year we represented one of the world’s leading architectural studios, Bjarke Ingels Group (BIG) from Denmark, in the preparation and negotiation of the contract for the architectural study, project documentation and related activities for the outstanding Vltava Philharmonic Hall project.
The new Vltava Philharmonic Hall will become an architectural, cultural and community landmark for downtown Prague and become a focal point for visitors from all around the world. Our multidisciplinary legal team was able to provide the client with, in particular, advice on planning and construction law issues, drawing on our experience from our prior work for foreign architectural studiosand also assisting in communication with local government, in a very tight timeframe across the requirements of the international tender competition in order to conclude the contract with due process to lay the framework to implement BIG’s vision. We continue to assist BIG in the Czech Republic, and we believe that in particular advice on sustainable construction, environmental and administrative law issues will be of utmost importance.
Are clients looking for stability and strategic direction from their law firms – where do you see the firm in three years’ time?
More than ever before, clients are seeking law firms that truly understand the nature of their business, to give the most pragmatic commercially driven advice. This understanding, along with stability and trust comes, in many cases, from the long-term relationships we have built with key clients. With new clients, trust and understanding are quickly developed, also due to the fact that many of our lawyers have particular industry specializations and are thus fluent in the topical issues of a client’s business.
In my view, clients seek both this stability and trust but also, dynamic strategic guidance, particularly in respect of new business concepts or newly enacted laws that affect them. Finding this duality in their legal advisers gives a client the confidence to move forward in its commercial objectives. Our aim, whether in 3 years or more, is to stay at the forefront of the technology changes impacting the world in order to keep providing our clients with the most relevant legal advice for their business in this rapidly changing world.