Setting up a Limited Liability Company (s.r.o.)
Establishing a limited liability company (s.r.o.) may not be as complicated as it seems at first glance. If you know all the required steps and conditions, you can handle the process fairly well. Of course, there are certain pitfalls. To avoid them, we recommend carefully studying the procedure for forming an s.r.o.
Conditions for Setting up an s.r.o. Are Improving
The European Union has long been working to reduce the administrative burden and fees associated with establishing limited liability companies. In the Czech Republic, this has been achieved only partially.
One positive change is the option to set up an s.r.o. with share capital of just CZK 1, and another is the ability to register the company in the Commercial Register through remote access by notaries.
What has not yet been achieved in the Czech Republic is lowering the overall costs of formation. According to EU recommendations, costs should not exceed EUR 100. The actual costs in the Czech Republic are explained below.
How to Set Up an s.r.o. – 5 Steps
Although the process can generally be completed in five steps, it’s possible that you may need to repeat some of them, especially step 4.
1. Incorporation Documents
If the company is founded by more than one person, they enter into a Memorandum of Association. A single founder prepares a Deed of Foundation. Both documents must take the form of a notarial deed and must include specimen signatures and criminal record extracts of the directors.
Some requirements are set by Act No. 90/2012 Coll., while others can be adapted to the needs of the company or omitted altogether.
Expected costs:
- CZK 2,000–4,000 for the notarial deed
- CZK 100 per criminal record extract (per person)
- CZK 30 for verification of a director’s signature (per person)
2. Trade License and Tax Registration
To obtain a trade license, you must provide proof of legal entitlement to use the company’s registered office, including the property owner’s consent. At the Trade Licensing Office, you will also need to submit the incorporation document and pay an administrative fee of CZK 1,000.
If you plan to operate a regulated, craft, or licensed trade, you must appoint a responsible representative.
Additional costs:
- CZK 30 for verification of the property owner’s signature on the registered office consent
3. Bank Account
If the share capital is higher than CZK 20,000, you must open a bank account. Although there are plans to allow deposits into notarial escrow, this is not yet possible.
Expected costs:
- Bank fees for account setup (depending on the bank)
- Confirmation of paid-in capital obligation (starting at CZK 120)
If your capital is CZK 20,000 or less, a declaration by the administrator of deposits will suffice.
4. Registration in the Commercial Register
You can file the application at the Registry Court yourself or through the notary who prepared your incorporation documents. As mentioned earlier, notaries have remote access to the register, which makes this step faster and reduces the risk of rejection.
Expected costs:
- Notarial deed: CZK 2,000–3,000
- Certificate for registration: approx. CZK 1,000
- Registration by notary: CZK 2,700 (compared to CZK 6,000 at the court)
5. Registration of the Ultimate Beneficial Owner (UBO)
The final step is registering the company’s ultimate beneficial owner – the individual who has direct or indirect decisive influence. You can submit the application at the Registry Court or through a notary.
Expected costs:
- CZK 1,000
How to Make the Process Easier
For some, setting up an s.r.o. may seem simple, while others may find it stressful and time-consuming.
Fortunately, there are ways to make the process much easier:
- Let professionals represent you in steps where you’re unsure.
- Have a tailor-made s.r.o. set up for you.
- Buy a ready-made company.
Don’t postpone your dream of owning an s.r.o. because of concerns about the process. Contact us and we’ll find the right solution together.
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