Company registration in Czech Republic

Things to Know Before Opening a Company in the Czech Republic

As of 2025, Czech companies offer several clear advantages: an official and reliable jurisdiction, simple, fast, and relatively low-cost incorporation, the ability to register for citizens of any country, and tax authorities that are quite supportive. These benefits have been widely discussed, and they are indeed real.

However, many clients who contact us us fail to consider the downsides, which other company registration services often hide. Once these issues come to light later, enthusiasm for registering a Czech legal entity disappears, and we all end up wasting valuable time. We prefer to be honest from the very beginning – so that neither of us spends time unnecessarily. If these factors are not a problem for you, be sure to contact us, and we will organize for your services in the best possible way.

Before setting up a legal entity, keep in mind the following factors:

Challenges when opening a bank account for non-resident-owned

Opening a corporate bank account in the country is no longer a mere formality; it is not as simple as the director walking into a bank, signing papers, and receiving account details. If the director of a Czech legal entity is a non-resident (not a Czech citizen and without a long-term visa, residence permit, or permanent residency), be prepared for significant difficulties in opening a bank account.

To learn more, please check out detailed information on opening a bank account on our website. To summarize briefly: if the legal entity director is not a Czech resident, the account opening process requires applying to Czech banks with a detailed description of the company’s business activities. Crucially, the director must be able to personally submit these applications and communicate directly with the bank. In fact, nearly all state banks now insist that the director handles this process themselves.

Another key requirement is that a substantial part of the company’s business must be conducted in the Czech Republic. This means having actual (or at least prospective) suppliers or clients in the country – real, operational business partners.

If the legal entity director is a non-EU citizen without Czech residency, opening a bank account in the country will be extremely difficult (if not impossible). For EU citizens, the process is somewhat easier but still far from straightforward. However, the good news is that Czech legal entities are not required to have a local bank account or payment systems, and many of the clients successfully operate their businesses this way. In fact, state law does not legally require companies to maintain a bank account at all.

Czech residency through ownership? Forget about it

You may have read online – even in 2025 – that setting up a business in the Czech Republic makes it relatively easy to obtain Czech residency. We frequently receive inquiries about this, so here is the actual situation. Technically – yes, you can register a company, prepare a simple and inexpensive set of documents, and apply for residency. However, the actual chances of approval are nearly zero. This loophole worked until around 2010-2012, but due to an increasing number of foreigners in the country, state authorities shut it down completely. Immigration officials now routinely reject such applications and they are legally justified in doing so. We have a dedicated page on our website explaining the current situation with Czech residency permits (prepare a link for you, coming soon), including the situation for companies.

If your main goal for establishing a legal entity is getting residency, we strongly advise against this idea. You will waste time and money with almost no chance of success.

All new Czech legal entities are initially non-VAT payers

Every newly established company in the country is NOT automatically a VAT payer and does not receive a VAT number. Each organization must separately apply for VAT registration. Due to widespread VAT fraud schemes involving Czech companies in the past, the state tax authorities now strictly check every new VAT registration application. You will need to provide a justification to the tax office explaining why your requires a VAT number. There is no guarantee that your application will be processed quickly, with no assurance of a successful result.

Unfortunately, we cannot predict how smoothly your VAT registration will proceed, as this largely depends on accounting-specific factors. Due to these challenges, pre-registered legal entities with existing VAT numbers are available for purchase on the market. However, they come at an expensive cost, starting from 5,000-6,000 EUR for the simplest cases.