A branch opened in the Czech Republic is considered an extension of a foreign company and does not have legal personality. For all its actions, the foreign company is considered responsible. The name of a branch is the same as the parent company’s name followed by the termination “organizational unit”.
A branch cannot acquire real estate in the Czech Republic, just lease Czech property and may be managed only by a Czech resident or a foreign with Czech residency permit.
The lists of actions that the branch opened in the Czech Republic will perform must be written in full in the application deposit at the Commercial Registry. The branch is then allowed to perform only those actions.
The applicable law used in the internal dealings of a Czech branch is the foreign law which regulates the parent company’s activities.
The video below provides more information on the Czech branch:
The procedure of establishing a branch in the Czech Republic requires a few steps and some mandatory documents.
After opening a bank account, where the initial capital is subscribed, the parent company must prepare the following documents:
- an application (with the name of the foreign company, the country were it was settled, the type of company, the names of the owners, the share capital),
- the foreign company’s articles of association or the memorandum of association,
- the certificate of registration,
- the name and address of the branch,
- the decision of opening a branch, the name of the branch’s representative.
The parent company’s registration certificate, articles of association and the name of the secretary and directors must be followed by an authorized Czech translation.
The first step of incorporating a branch in the Czech Republic is registering in the Trade Licensing Office and receiving an extract of the trade license. The licenses may be issued for a professional trade, a vocational trade, a permitted trade or an unqualified trade.
After that, the appropriate documents must be deposited at the Business Commercial Registry of the Regional Commercial Court and a unique identification number must be received.
The last step is registering for taxes, a process that is performed simultaneously with registering for social security and health insurance.
Owning a branch in the Czech Republic may be considered advantageous from an administrative point of view - there are not so many obligations to present accounts. The main disadvantage is the full liability of the parent company for its actions.
Our specialists in company formation in Czech Republic can help you register a branch in this country or any other type of company.