Choose to register your company (SRO) in Prague, Czech Republic

Register your company in Prague, Czech Republic

Prague, the capital of the Czech Republic, stands as one of Central Europe’s most dynamic business centers. With ~1.3 million residents in the city and more than 2.6 million in the metropolitan area, Prague contributes nearly 25% of the country’s GDP. Known for its strategic location at the heart of Europe, modern infrastructure, and highly educated workforce, Prague attracts entrepreneurs, family offices, and investors looking to establish or expand their companies in the EU.

 

Společnost s ručením omezeným (s.r.o.) – the most common Czech company type

The most popular legal form for both local and foreign entrepreneurs in Prague is the společnost s ručením omezeným (s.r.o.), equivalent to a private limited company. It combines flexibility with limited liability protection, making it ideal for SMEs and subsidiaries of international groups.

• Share capital: The minimum registered capital for an s.r.o. is only CZK 1 (~€0.04). In practice, investors contribute higher amounts (CZK 100,000–200,000) to strengthen credibility.
• Shareholders: Can be one or multiple (natural or legal persons), with 100% foreign ownership allowed.
• Directors: At least one executive director (jednatel) is required. Residency is not mandatory, though local substance is recommended.
• Liability: Limited to the amount of unpaid registered capital.

 

Corporate income tax in the Czech Republic

Czech resident companies are taxed on worldwide income at a flat 19% corporate income tax rate. Non-resident companies pay CIT only on Czech-sourced income. Certain investment funds enjoy reduced 5% CIT, while pension funds are fully exempt. Dividend taxation: Dividends distributed to Czech or EU parent companies may be exempt under the EU Parent-Subsidiary Directive if ownership thresholds are met. Otherwise, dividends are subject to a 15% withholding tax, reduced to 0–10% under applicable double tax treaties.

 

VAT regime in Prague

The standard VAT rate is 21%. Reduced rates include 15% for food, medical supplies, and accommodation, and 10% for books and pharmaceuticals. Businesses must register for VAT if turnover exceeds CZK 2 million (approx. €80,000) within 12 months. Voluntary registration is also possible for companies trading internationally.

 

Accounting, annual accounts, and compliance 

Czech companies are required to keep statutory accounts in accordance with Czech Accounting Standards (CAS). Annual financial statements must be approved by the general meeting of shareholders and filed with the Commercial Register. Larger companies may require an audit (based on turnover, assets, and employee thresholds). Corporate income tax returns are filed annually, with advance tax payments due during the year.

 

Main business districts and streets in Prague

• Na Příkopě – prestigious financial and retail hub with banks, advisory firms, and corporate offices.
• Václavské náměstí (Wenceslas Square) – central boulevard with offices, hotels, and shopping centers.
• Pařížská ulice – luxury avenue hosting high-end boutiques, private banking, and embassies.
• Florenc & Karlín – modern office clusters, tech startups, and coworking spaces.
• Pankrác & Anděl – prime mixed-use business districts with headquarters buildings and malls.

 

Growing sectors in Prague, Czech Republic

• Information Technology & Startups: Prague hosts an expanding tech ecosystem with unicorns like Avast (cybersecurity) and Kiwi.com (travel tech).
• Financial Services: Prague is home to ČSOB, Komerční banka, and Raiffeisenbank Czech Republic, with a growing fintech sector.
• Real Estate & Construction: Developers such as Penta Real Estate and CPI Property Group drive new projects across Karlín, Smíchov, and Pankrác.
• Manufacturing & Automotive: Škoda Auto and related suppliers anchor Prague’s industrial base.
• Tourism & Hospitality: Hotels, restaurants, and cultural services represent key GDP contributors.

 

Real estate opportunities for investors

Prague’s commercial and residential property market remains robust, with yields averaging 4–5% for prime office assets. Regeneration projects in Karlín, Smíchov, and Holešovice attract institutional investors. Demand for logistics hubs is growing around the D1 and D5 motorways, while mixed-use developments in the city center remain a focus for both developers and private equity funds.

 

Register your s.r.o. in Prague with Damalion

Setting up a společnost s ručením omezeným (s.r.o.) in Prague becomes seamless with Damalion. Our experts provide end-to-end support so you can focus on building your business while we handle the complexities of Czech compliance and administration. Our tailored services include:

• Legal structuring: Guidance on choosing the right entity (s.r.o., a.s., or branch) for your strategy.
• Business permits: Assistance with Czech trade licenses and regulated industry approvals.
• Corporate governance: Local director services, shareholder agreements, and registered office solutions.
• Banking: Introductions to Czech and EU banks for capital deposits, current accounts, and financing.
• Accounting & tax: Ongoing bookkeeping, annual accounts filing, and CIT/VAT compliance.
• Private debt access: For mid-sized companies, Damalion connects you with lenders to support growth, refinancing, or expansion. Learn more about our Private Debt Services in the Czech Republic.

Whether you are a local entrepreneur or an international investor, Damalion ensures a smooth company s.r.o. register in Prague, aligning your business with the city’s dynamic economy and regulatory framework.

Contact Damalion today to begin your company registration journey in Prague, Czech Republic.

 

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