Articles
Czech Holding Company
Updated on Thursday 08th December 2022 Rate this article
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A holding company is a registered business that owns investments in other companies that bear the name of operating companies. This type of company has a limited right of operating business activities, but the main benefits of a holding company are asset protection and tax reduction. When thinking of creating a holding company in the Czech Republic, you should consider the support of our Czech company incorporation agents as they have expertise in these matters.Forms of a Czech holding company
| Quick Facts | |
|---|---|
| Legal entities used | Limited Liability Company, Corporation |
| Incorporation method | With the Czech Trade Register |
| Incorporation time | Around 5 days |
| Advantages | No restriction for owner nationality |
| Precautions | Limited financial and legal liability for subsidiaries |
| Shareholding structure | 1 shareholder |
| Minimum Capital | USD 1 |
| Taxation | 19% corporate tax rate |
| Control | Foreign ownership permitted |
| Accounting and Reporting | Annual tax returns, statutory audits |
| Number of double taxation treaties | 93 |
Choosing the structure of your business is an important step and there are two main forms that a holding company can take in the Czech Republic, namely:
- - a corporation;
- - a limited liability company (LLC).
Most business owners, however, choose the LLC form as it provides better asset protection and helps them avoid losing the business assets if financial difficulties should arise. The video below offers a short presentation on the registration of a Czech holding company:
Our company formation agents in the Czech Republic can help you establish a holding company on its territory and provide you with the relevant information you need.
If you want the services of accountants in Czech Republic, we advise you to contact our specialists in the field. They can offer complete services of payroll, bookkeeping, preparation of annual financial statements, audits, and more. Moreover, entrepreneurs can benefit from comprehensive financial and analysis reports for companies they own. We emphasize the fact that our accountants are certified and accredited, so get in touch with our team if you would like to know more about the services provided.
Reasons for opening a Czech holding company
A large corporation can decide to make its structure in the form of a holding company with various subsidiaries because these can be used for different ends: owning its trademarks, operating each franchise, owning the holding company's real estate etc. Thus, every operating subsidiary has limited financial and legal liability. Furthermore, among other important benefits of establishing a holding company in the Czech Republic are the following:
- • the nationality of the owners of the Czech companies bears no restriction;
- • the holding company cannot be pursued for remuneration in case of losses of the subsidiaries and therefore it is protected from them;
- • in case a strategic plan is made and the business has some parts based in lower taxes sectors, then the company will evidently have to pay lower taxes.
You can ask our team of company registration specialists for counsel and they will make sure that your best interests are being looked after in creating a holding company in the Czech Republic.
Aspects to consider when establishing a Czech holding company
If you wish to form a holding company, according to the Czech law, you will need to file registration by giving the articles of incorporation for your company and the name of it. This has to be done for both the holding company as well as for the subsidiaries.
FAQ about Czech holding companies
1. Why do foreign investors open holding companies in the Czech Republic?
Czech holding companies present varied advantages. Foreign investors can own real estate properties, trademarks, and can operate different activities. Lower taxation is another benefit of such companies.
2. What is the suitable structure for a Czech holding company?
A foreign investor can set up a Czech holding company as a corporation or a limited company. The registration and formalities are straightforward and can be managed by our experts.
3. Are there any restrictions in terms of nationality for opening a holding company in Czech Republic?
No, there is no nationality restriction for foreign investors who want to open Czech holding companies. Anyone can set up such a structure as long as the applicable legislation is respected.
4. What are the documents for opening a Czech holding company?
A holding company in Czech Republic can be established with the Articles of Association, the main documents necessary for such structure. You can discuss all the formalities with our Czech company formation agents.
5. Can I establish a holding company in the electricity field in Czech Republic?
Yes, a Czech holding company can be registered in any kind of sector as long as there are no restrictions imposed by the government. You can discuss all the details with our specialists.
6. Is the VAT registration imposed for Czech holding companies?
Yes, holding companies in Czech Republic must be registered for taxation purposes, including VAT. We also mention that such structures are protected against fiscal evasion by the double taxation treaties signed by Czech Republic with countries worldwide.
7. How long does it take to register a Czech holding company?
Holding companies in Czech Republic can be incorporated in a few days if the documents are accepted by the relevant authorities. For a smooth and fast process, you can hire the services of our Czech company formation specialists.
8. Is there a restriction for opening a Czech holding company in a specific sector?
No, there is no constraint regarding the field in which a Czech holding company can be established. This is another great benefit for international investors in Czech Republic.
9. How do I grow a Czech holding company?
The development and success of a Czech holding company depend on the industry is incorporated, financial sources, a clear business plan, and finding different opportunities.
10. Can I benefit from support for opening a Czech holding company?
Yes, one of our Czech company formation representatives can help you establish a holding company by managing the procedures implicated, plus other essential aspects. You can send your inquiries if you would like to know more about the support we can offer.
Making investments in Czech Republic
The Czech Republic is a beneficial destination for foreign investment due to the opportunities offered to attract as many foreign entrepreneurs as possible. With a stable economy and clear investment strategies involving various advantages, the Czech Republic is certainly a very good choice for international players who want to benefit from a solid and appreciated business climate.
The strategic geographical location, the accessible and experienced workforce, the well-developed infrastructure, and the beneficial incentives offered to foreign investors are some of the advantages appreciated by foreigners in the Czech Republic when it comes to investments. Here are some figures and statistics that highlight the above mentioned aspects:
- In matters of total FDIs, Czech Republic registered nearly USD 171 billion in 2019.
- According to the 2020 Doing Business report that contains information about the ease of doing business, Czech Republic ranked 41 out of 190 countries in the world.
- China, USA, and South Korea represent the main investors in the Czech Republic. Also, many EU countries, among which Luxembourg and Germany, direct their investments in this country, in a large percent.
- The manufacturing sector absorbs most of the FDIs in the Czech Republic, followed by real estate and wholesale & retail trade.
Working with our Czech company formation agents
No matter if you intend to open a Czech holding company or any other type of structure, we recommend you talk to our specialists in company formation. We have a dedicated and experienced team of agents who can handle all the formalities and represent international entrepreneurs and their businesses in a professional manner.
Choosing to set up a holding company also implies analyzing business, economic and operational demands. Feel free to contact our consultants in company incorporation and they will assist you with all the procedures that need to be completed.
Meet us in Brno
Call us at +420 721 565 868 to set up an appointment with our specialists in company formation in Brno. Alternatively you can incorporate your company without traveling to Czech Republic.
As an CorpexLab client, you will benefit from the joint expertize of local experts and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in Czech Republic.
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