Czech Company Formation - S.R.O. Services

The rules for buying and selling property in the country are byzantine, especially for non-EU citizens. Most non-Czechs are unable to directly own property. Thus, the most common method for obtaining ownership by non-residents is through the purchase of a special purpose vehicle (SPV), specifically a limited liability company (known as a "společnost s ručením omezením," or s.r.o.). To buy property, it is enough to form a “real estate s.r.o.,” an entity without any business activity other than the purchase, ownership, rent and sale of property. The investor forms or purchases the firm and becomes the only shareholder in it. This company in turn owns the property. Once established, the s.r.o. can also be used for financing arrangements in relation to the property.

Effective 1 May, 2004 (when the Czech Republic entered the European Union), EU citizens are, under certain circumstances, able to buy real estate without an s.r.o. An EU citizen can apply for a temporary EU card, which enables the purchase of property in the Czech Republic under his or her own name.

Companies.cz offers both off-the-shelf SPV limited liability companies and EU cards. Thus you can choose which tool you prefer:

Company Formation

Companies.cz is the Czech Republic's first true on-line company formations service and specialize in providing readymade limited liability companies (s.r.o.) for foreigners for the purposes of purchasing real estate or operating businesses. Our fee structure is transparent and fixed fees start from as little as CZK 44,000 (excl.  VAT) for a readymade limited liability company (available the same day the order is placed).

Readymade companies offered by us have many advantages over those built from scratch. Most significantly, they can immediately be used for a transaction, as they are already registered in the Czech Republic. They are also guaranteed to have no activities, obligations or claims against them, and to have their registered capital paid in full. Furthermore, the entire transaction can be carried out online – it is not necessary to travel to Prague in order to effect it.

The whole procedure of company transfer can be divided into 2 steps:

1. Transfer of shares of the company to the new shareholder(s) & appointing client as executive director of the company. Thus client is allowed to act on behalf of the company immediately. In order to transfer a ready-made company to a client we need following information on shareholders and executive directors:

• Name & surname,
• Date of birth,
• Passport number,
• Citizenship
• Address

2. Submitting proposal to Municipal Court concerning change of the ownership of the company within 3 months after transfer of shares. In order to submit the proposal, client has to provide us with Criminal extract from home country for each executive director (not older then 3 months). We will also need new registered address of the company (new reg. address will be address of the purchased property). In case property is not finished and it is not possible to change the reg. address, then client has to pay additional fee of CZK 6,000 excl. VAT (annual fee for registered address).

Cost of company formation:

• CZK 44,000 excl. VAT for the company
• CZK 5,000 excl. VAT for the new notarial deed (only in case of co. name change, different split of the shares than 100% or 50% - 50%, or in case that purchased property is outside of Prague)

EU Card (temporary residency permit)

As you want to purchase real estate in the Czech Republic, we can use Purchase or Future Purchase Agreement as the official reason for granting of the residency permit.

General documents needed for EU card:

4 passport pictures

Original passport – a copy of the passport should be sent in advance via email

Original health Insurance Card valid in the Czech Republic / ideally the blue plastic insurance card issued by the Health Insurance Company / - find out more at: this site.

Filled in Questionnaire / attached / - should be sent in advance, duly filled in

Purchase Contract or Future Purchase Contract – fully signed by the seller and the buyer. In case that the seller is the company, then the signature of the seller has to be completed with the stamp of the company. A copy of this document should be sent via email before applying for the EU card.

Extract from Commercial Registry / in case that the seller is the company / – arranged by us

Extract from the Land Registry – arranged by us

Documents according to the status of the purchased property as mentioned below

If client is buying a real estate property in Prague:

1. Flat is finished

a. Buyer has to declare a proposal of the entry to the Land registry that that the purchase has been proceeded and the change of the ownership is in process from the seller to the buyer.

b. If document specified in point a. doesn’t exist, then it is essential to declare proof of accommodation – can be done in the same flat, but seller has to confirm, that buyer can use the property for living purposes until the client is registered in the Land Registry as the owner of the property. In this case we will also need extract from the Land registry not older then 3 months proving, that the seller is owner of the property

2. Client is buying flat in a development project / flat is not ready:

It is necessary to declare proof of accommodation at any residential address in Prague until the client is registered in the Land Registry as the owner of the property.

3. Client is buying a non-residential real estate property:

it is necessary to declare proof of accommodation at any residential address in Prague for unlimited period of time as the property can not serWve for the residential purposes. In Prague it takes 1 day to apply and collect the card. That is why client has to come in person in order to collect the card.

If client is buying a real estate property outside of Prague:

Should the client purchase a real estate property outside Prague, the same rules for accommodation as above mentioned apply and the client has to sign the Power of Attorney which will enable us to apply for the EU card on his /her behalf. The EU card is issued within few days while applying outside of Prague; however client has to come in person in order to collect the card. Companies.cz cannot provide residential addresses outside of Prague.

All above mentioned documents have to be originals or certified copies, not older than 6 months. We may apply for the EU card in Prague within 2 – 3 working days since the last document is handed over. While applying outside of Prague, we may apply within 5 working days since the last document is handed over.

In case that any other option than above mentioned occur, then all documents will be clarified according to the actual situation.

Client has to come in person to Prague (Mo – Thu) in order to apply for the EU Card and the Card will be issued the same day as we apply. We strongly advise clients to come to Prague at least 1 day before applying for the EU card as we need some time in order to prepare the rest of the documents with the client.

Pricing

If client is buying a real estate property in Prague:

point 1.a. CZK 19,500 excl. VAT

point 1.b. CZK 19,500 excl. VAT + fee for accommodation (CZK 18,000 excl. VAT / 1 year). If client has his own

accommodation = then for free

point 2. CZK 19,500 excl. VAT + fee for accommodation (CZK 18,000 excl. VAT / 1 year). If client has his own accommodation = then for free

point 3. CZK 19,500 excl. VAT + fee for accommodation (CZK 18,000 excl. VAT / 1 year). If client has his own accommodation = then for free

If client is buying a real estate property outside of Prague:

CZK 26,000 excl. VAT plus clients fees for the proof of accommodation.

Important notice for you is that all the above mentioned documents / such as Future Purchase Contract or Purchase Contract etc. /  will have to be translated into Czech by a certified translator - this can raise the costs according to the volume of the documents.

EU Cards are issued by the Czech Government, there is no legal guarantee of getting the residency permit (Czech authorities are also empowered to ask the client for an interview). However, all clients of Companies.cz have thus far received their EU Cards without a problem.

Request company formation or EU card info packet:

Most non-residents are unable to directly own property. For more information, please click here.