Since the beginning of the full-scale invasion, millions of Ukrainian citizens have been forced to leave Ukraine and go abroad. Most of them chose the EU countries, including the Czech Republic, as their temporary residence. Learn more about the rules for starting and running a business for Ukrainians in the Czech Republic

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The Czech Republic, with its rich history, culture, and stable economy, is recognized as an attractive place to do business. Ukrainian entrepreneurs can find a number of opportunities for development and investment in the Czech Republic. If you are planning to open a business in this country, following certain steps and requirements is key to a successful start and operation.

Conditions for starting a business for Ukrainians in the Czech Republic

There are a number of important rules and procedures to follow when starting a business in the Czech Republic. First, you need to obtain temporary protection, and the person who decides to start a business must be an adult (18 years of age or older), legally capable and have no criminal record.

To start a business in the Czech Republic, you need to obtain a trade license or other permit, depending on the type of business. To become a sole proprietor, a person must obtain a certificate from the Entrepreneurial Registration Office.

There are two main types of entrepreneurship in the Czech Republic. For the first one, you just need to register, and then you can engage in various activities, such as photography, bakery, or hairdressing.

As for the second type of business, you need to obtain a special permit to run it. You should have relevant experience and competence in the chosen field. This can be an important aspect for the successful development of your business in the Czech Republic.

Available forms of legal entities for doing business in the Czech Republic

According to Czech law, there are various forms of legal entities that you should consider when starting a business in this country. One of the most common is a limited liability company (Společnost s ručením omezeným). Here, the authorized capital can be as little as 1 kroon.

Another form of legal entity is a limited partnership (Komanditní společnost), where at least one partner has limited liability and the other has full liability. A general partnership (Veřejná obchodní společnost) is another option, where at least two individuals are jointly and severally liable for the company's obligations with all their property.

A joint-stock company (Akciová společnost) divides its authorized capital into shares. In this case, shareholders are not liable for the company's obligations. A cooperative (Družstvo) can be established by three persons, and there are no specific conditions regarding the authorized capital or minimum contribution.

The procedure for registering a private entrepreneur for Ukrainian citizens in the Czech Republic

To start a business in the Czech Republic, you should contact the Entrepreneur Registration Department at the city district offices in Prague or another city. A single registration form simplifies the process and replaces the various types of documents that an entrepreneur must submit when starting and running a business. With this form, you can simultaneously:

1. register as a taxpayer;

2. make the necessary changes to the Employment Office;

3. send a notification to the Czech Social Security Office to change information about yourself;

4. make changes to health insurance.

This integrated approach simplifies the entire process and allows you to effectively handle administrative issues related to starting and running a business in the Czech Republic.

Opening a limited liability company for Ukrainians in Poland

Establishing a limited liability company is the main form of business in the Czech Republic. To do this, you need to:

1. Apply to a notary for the adoption of the memorandum of association;

2. Register the legal address of the company;

3. Obtain all necessary trade licenses;

4. Open a temporary account for paying contributions (if the contribution is less than 20 thousand CZK, you do not need to open an account, and the money can be paid to the contribution manager);

5. Register the company in the commercial register of the relevant district court.

More information on starting a business in the Czech Republic can be found at the Single Point of Contact.

Tax accounting of companies of Ukrainian citizens in the Czech Republic

Companies operating in the Czech Republic are obliged to pay income tax, which is 19% (investment funds can use the simplified system, paying only 5%). Additionally, there is a value added tax with a basic rate of 21%, but certain goods and services can enjoy reduced rates of 15%, 10% or 0%.

Starting in 2021, a single tax (paušální daň) for private entrepreneurs was introduced, combining social and health insurance and income tax in the form of a single monthly payment. Entrepreneurs should submit a declaration to the Tax Office by the end of March of the following year.

If an entrepreneur chooses the single tax, he or she must register as a taxpayer using a special form. This eliminates the need to submit separate declarations to different authorities, simplifying the accounting and reporting process.

So, starting a business in the Czech Republic requires patience, research, and compliance with the rules. Think of this process as an investment in the future and growth of your company in the European market.

Igor Usyk - Head of Legal Department at Visit World

For safe relocation to Czech Republic, obtaining refugee status and employment, use the advice of an international lawyer. We help to solve complex and simple issues for your comfort and safety in Czech Republic.

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