How Bosnian and Herzegovinian Businesses Can Secure Payment in the Czech Republic: Practical Legal Steps

Mgr. Vojtěch Sucharda
Mgr. Vojtěch Sucharda
16.3.2026 | ARROWS law firm

As a Bosnian or Herzegovinian business extending credit to Czech partners, you face a critical challenge: what happens when they don't pay? The Czech legal system offers multiple paths to recover your money, from quick extrajudicial settlements to formal court proceedings and enforcement through specialized bailiffs. Understanding these mechanisms determines whether you recover your funds efficiently or lose time and money.

Photograph captures an attorney consulting about cross-border debt recovery.

Quick summary 

  • Key decision factors for Bosnian and Herzegovinian business leaders include acting fast on transport claims. If your debt relates to international trucking or logistics (CMR), the statute of limitations is only one year, so do not wait.
  • Missing the pre-litigation notice requirement means you pay your own legal fees, making this a non-negotiable step in Czech law. You need a Czech judgment or a recognized foreign judgment for enforcement, and suing directly in the Czech Republic is often faster than recognizing a Bosnian judgment.
  • Always check the Czech Insolvency Register before spending money on lawyers. ARROWS Law Firm provides the local license and expertise to navigate these EU and Czech specificities.

Understanding the Czech debt collection landscape

When doing business across borders, extending credit to Czech customers creates opportunities but also introduces risks that differ significantly from your domestic market. The Czech Republic operates within an established legal framework that differs substantially from Bosnian and Herzegovinian law in both procedure and practical enforcement mechanisms.

As a foreign creditor, you must navigate not only language barriers and cultural differences in business practices, but also procedural requirements that have hidden complexity. Requirements that appear straightforward on the surface often contain exceptions and interdependencies that only experienced practitioners fully understand.

The Czech debt collection process divides into two fundamental stages, each with distinct characteristics, timelines, and costs. Understanding this two-stage framework is essential because selecting the wrong approach at the outset can delay your recovery by months or even derail your claim entirely.

The ARROWS Law Firm regularly assists foreign businesses—including companies from Bosnia and Herzegovina - in navigating this complex landscape, combining deep knowledge of Czech legal procedures with practical experience in cross-border debt recovery.

The pre-litigation phase

Before pursuing formal legal action in Czech courts, Czech law requires you to follow specific preliminary steps that are mandatory if you want to recover your legal costs later. This pre-litigation stage, known formally as the předžalobní výzva , represents far more than a courtesy notice to your debtor.

It is a legally mandated procedural requirement that, if executed incorrectly or omitted entirely, will have direct financial consequences for your business. This could potentially cost you tens of thousands of crowns in unreimbursed legal expenses even if you ultimately win your case.

The requirement is straightforward in principle: you must send a formal written demand letter to your debtor at least seven days before filing any legal action. However, the practical execution involves multiple compliance details that foreign businesses often underestimate.

The letter must be sent to the debtor's correct address for service (either their registered office in the Commercial Register or their data box), and you must maintain proof of delivery. For corporate debtors in the Czech Republic, the most effective method is often the Data Box (datová schránka) system, which provides irrefutable proof of delivery.

Alternatively, registered mail with a return receipt is acceptable. The letter must specify the claim with absolute precision, including the legal basis for your demand, the exact amount owed, the due date that has passed, and a clear warning regarding legal proceedings.

The předžalobní výzva must explicitly reference Section 142a of the Czech Code of Civil Procedure and warn the debtor that failure to satisfy the obligation will result in a lawsuit and a claim for reimbursement of costs. The letter should specify a minimum payment period of seven days.

The consequences of getting this letter wrong are significant. If you proceed to court without sending a compliant pre-litigation notice, the Czech judge will refuse to award you reimbursement for your legal costs, even if you win the case on its merits.

1. What information must the demand letter contain to be legally valid?
The letter must identify both creditor and debtor clearly, specify the legal basis for the claim, quantify the exact amount including any accrued default interest, and state the due date. Simply sending an informal payment reminder does not satisfy the requirements of Section 142a.

2. What is the correct way to deliver the pre-litigation notice?
The most secure method for B2B claims in the Czech Republic is via the Data Box (datová schránka), as delivery is legally presumed upon login by the recipient. If you do not have a Data Box, use registered mail with a return receipt to the address listed in the Czech Commercial Register (Obchodní rejstřík).

3. If the debtor pays after receiving the pre-litigation notice, do I still need to pursue court proceedings?
No. The purpose of this notice is precisely to facilitate out-of-court settlement and give the debtor a final opportunity to pay without incurring additional legal costs. Many Czech debtors respond to this formal notice by negotiating a settlement.

Documenting your claim

Before taking any legal action—whether extrajudicial collection efforts or court proceedings—you must compile comprehensive documentation that establishes the debt beyond question. This documentation phase is where many international creditors make critical mistakes that later undermine their recovery efforts.

In the Czech legal system, the burden of allegation and proof lies strictly with the plaintiff, meaning you must substantiate your claim with specific evidence at the time of filing. The essential documentation includes the original signed contract, all invoices issued, and crucially, proof of delivery or performance.

This includes CMR notes (for international transport), signed delivery notes, handover protocols, or service acceptance reports. You will also need email correspondence between the parties, especially where the debtor acknowledges the debt or discusses payment, and records of any partial payments.

The practical challenge here is that contracts and invoices may reference amounts in multiple currencies, or complex payment terms. Additionally, if default interest has accrued, you must have documentation showing the interest rate or rely on the statutory default interest rate.

If relying on the statutory rate, you must correctly calculate it based on the repo rate set by the Czech National Bank valid for the first day of the calendar half-year in which the default occurred, plus 8 percentage points. Small discrepancies in documentation can become grounds for a debtor's objection.

1. If the contract was concluded verbally but confirmed in email, is that sufficient proof in Czech court?
Czech courts accept email correspondence as evidence of contract formation. However, the email thread must clearly establish the essential terms of the contract. We strongly recommend confirming all verbal agreements in writing immediately.

2. What if the debtor has made partial payments—does that affect my claim for the full outstanding amount?
Partial payments actually strengthen your position because they may constitute an implicit acknowledgment of the debt. Importantly, a partial payment can interrupt the statute of limitations, starting a new limitation period from the date of payment.

3. How should I document default interest to include it in my claim?
If your contract specifies a default interest rate, gather the contract clause. If not, Czech law applies the statutory rate (Repo rate + 8%), and while you do not need to document the rate itself, you must clearly calculate the total amount accrued.

The two pathways to recovery: Extrajudicial collection and judicial proceedings

The Czech legal system provides creditors with two distinct recovery pathways, each suited to different circumstances and each with markedly different timelines and costs. Understanding when to use each mechanism is a critical strategic decision.

Extrajudicial debt collection

The extrajudicial or pre-court phase is where a significant majority of Czech debt collection cases are successfully resolved. During this phase, lawyers contact the debtor by telephone and in writing in Czech, explaining the debt, its legal basis, and the consequences of non-payment.

During this phase, we research the debtor's creditworthiness by checking the debtor's registration in the Czech Commercial Register, the Insolvency Register, and the Central Register of Executions. This intelligence is invaluable: if research reveals the debtor is already in insolvency, proceeding to formal litigation may be unwise.

Many debtors respond to firm but professional extrajudicial collection pressure by proposing payment arrangements. A debtor might offer to pay the debt in monthly installments or propose a lump-sum settlement. Negotiations often result in recovery without incurring court fees.

The ARROWS Law Firm regularly handles extrajudicial collection matters for international clients, combining demand letters, negotiation expertise, and practical knowledge of Czech business culture.

Judicial debt recovery

If the debtor does not respond to pre-litigation demands, the creditor must initiate formal court proceedings. The judicial phase subdivides into two distinct procedures: the Electronic Payment Order (elektronický platební rozkaz - EPR) for undisputed monetary claims, and ordinary civil litigation.

For undisputed monetary claims up to CZK 1,000,000 (approx. EUR 40,000), the Electronic Payment Order (EPR) is the most efficient tool as it allows a Czech district court to issue a binding payment order without a hearing. The court reviews the electronic application and, if the claim appears well-founded based on the assertions, issues the order.

The debtor then has 15 days from the date of personal service to either pay the amount or file an objection (odpor). If the debtor does not file an objection within 15 days, the payment order automatically becomes a final, enforceable judgment (pravomocné a vykonatelné rozhodnutí).

You can then proceed directly to enforcement, benefiting from a reduced court fee of 4% of the claimed amount compared to 5% for standard claims. However, if the debtor files an objection (which requires no justification—a simple "I object" suffices), the EPR is cancelled, and the case converts to ordinary civil litigation.

For claims exceeding CZK 1,000,000 or where an EPR cannot be used (e.g., service abroad or unknown address), the standard Payment Order or ordinary litigation applies. Ordinary litigation involves filing a statement of claim, payment of court fees, and court hearings.

The timeline for ordinary civil litigation is longer, with a first-instance judgment typically requiring 6 to 18 months. If appealed, the timeline extends further, meaning a fully litigated case with appeal can consume 2 to 3 years.

The European Payment Order

For creditors located in Bosnia and Herzegovina, the European Payment Order (EOP) is a potential alternative. Although Bosnia is not an EU member, the Regulation applies to cross-border cases where at least one of the parties is domiciled in a Member State different from the Member State of the court.

The EOP procedure begins with filing Form A with the competent Czech court, after which the court reviews the application and issues a European Order for Payment. The debtor then has 30 days to lodge a statement of opposition. If no opposition is filed, the EOP becomes enforceable without requiring further recognition.

The main advantage of the EOP is its standardized form and the fact that it is recognized across the EU. However, for a claim solely against a Czech debtor to be enforced in the Czech Republic, the domestic Electronic Payment Order (EPR) is often strategically superior.

The domestic procedure is deeply integrated into the Czech electronic court systems and the objection period is only 15 days, compared to 30 days for the EOP. The EOP is most valuable if you anticipate needing to enforce the judgment against assets the debtor might have in other EU countries.

1. Should a Bosnian company use the domestic Czech payment order or the European Payment Order?
If the debtor and their assets are in the Czech Republic, the domestic Electronic Payment Order is usually faster due to the shorter 15-day objection period and lower court fees. If the debtor has assets in other EU countries, the EOP is better.

2. What is the practical difference between a payment order that becomes final versus one where the debtor files an opposition?
If the payment order becomes final, you have an enforceable title immediately. If the debtor objects, the order is cancelled, and you must prove your claim in a standard trial, bearing the burden of proof and facing potential delays.

3. Can a Bosnian company file a European Payment Order in a Czech court in English?
While the forms exist in all EU languages, Czech courts generally require submissions to be in the official language (Czech). We recommend filing in Czech to avoid procedural rejection and facilitate subsequent enforcement.

The enforcement phase

Obtaining a judgment is not the end; it is the start of enforcement (exekuce). In the Czech Republic, enforcement is carried out by private bailiffs (soudní exekutor), who are state-authorized but operate as private professionals.

The enforcement process begins when the creditor files an enforcement proposal with a chosen bailiff, who has extensive powers including freezing bank accounts and garnishing wages. Unlike in some jurisdictions, you do not need to identify the assets yourself; the bailiff has access to banking and property databases to locate them.

The costs of enforcement—bailiff's fees and administrative costs—are primarily recovered from the debtor. However, if the debtor is insolvent, the creditor may bear certain minimum costs.

Statute of limitations

Czech law imposes a strict statute of limitations. Understanding this is essential to avoid losing your rights. The general statute of limitations for commercial debts under the Czech Civil Code (Občanský zákoník) is three years, generally measured from the original due date of the invoice.

If your claim arises from an international contract for the carriage of goods by road (CMR Convention), the limitation period is generally only one year. This is a common trap for transport companies; once the limitation period expires, the debtor can raise the "plea of limitation" (námitka promlčení) and the court must dismiss the claim.

However, the limitation period can be interrupted if the debtor provides a written acknowledgment of the debt (uznání dluhu) specifying the reason and amount. Under the Civil Code, such acknowledgment creates a new ten-year limitation period from the date of acknowledgment.

1. If a Czech debtor makes a partial payment, does it reset the limitation period?
A partial payment may constitute an acknowledgment of the debt, but under the current Civil Code, it typically acknowledges only the paid amount unless circumstances imply acknowledgment of the whole. It is safer to secure an explicit written acknowledgment for the remainder.

2. How can I prove that a written acknowledgment was provided?
A formal debt recognition document signed by the debtor is best. It should state the amount and the legal title (invoice numbers).

3. What if I filed a court case but it was dismissed for procedural reasons?
If you refile quickly, the original filing date might be preserved, but this is complex. Always aim to file correctly the first time.

Court costs and fee recovery

Court fees are prepaid by the plaintiff. For an Electronic Payment Order , the fee is 4% of the claimed amount (min. CZK 400), while for standard litigation or a standard Payment Order, it is 5% of the claimed amount (min. CZK 1,000).

Czech law follows the "loser pays" principle, meaning the successful party is entitled to reimbursement of court fees and legal representation costs. Legal representation costs are calculated based on a statutory tariff (advokátní tarif), not necessarily the actual hourly rate paid to the lawyer.

You are also entitled to a flat rate for overhead costs (CZK 300 per "act of legal service"). As mentioned earlier, failure to send the pre-litigation notice (Section 142a) denies you the right to recover these legal representation costs.

Key risks in Czech debt collection

Risks and penalties

How ARROWS helps (office@arws.cz)

Failure to send compliant pre-litigation notice: Even if you win your court case, the court will deny reimbursement of your legal costs if you did not send a properly formatted demand letter (citing § 142a OSŘ) at least 7 days before filing.

Pre-litigation demand letter preparation: We draft legally compliant předžalobní výzva letters, ensure delivery via Data Box or registered mail, and secure your right to cost reimbursement.

Statute of limitations expiration: 3 years for general debts, but only 1 year for international transport (CMR) claims. Missing these deadlines makes the debt unenforceable.

Prompt action & Monitoring: We calculate deadlines immediately. For transport claims, we act with extreme speed to file before the 1-year CMR deadline expires.

Inadequate documentation: Gaps in CMR notes, delivery protocols, or invoices allow debtors to dispute the claim's validity.

Evidence Audit: We review all documents (contracts, CMRs, emails) before filing to identify and fix evidentiary gaps.

Wrong procedure selection: Choosing the EOP when a domestic Electronic Payment Order would be faster, or vice versa.

Strategic selection: We select the procedure (EPR vs. EOP vs. Litigation) that offers the best balance of speed and cost for your specific case.

Pursuing judgment-proof debtors: Wasting fees on enforcement against a company in insolvency.

Asset Due Diligence: We check the Insolvency Register and Central Register of Executions before filing to assess if recovery is realistic.

International considerations for Bosnian and Herzegovinian creditors

As a non-EU business, you face specific cross-border nuances. If you already have a judgment from a court in Bosnia and Herzegovina, it is not automatically enforceable in the Czech Republic under EU regulations because Bosnia is not an EU member.

Recognition is governed by the Czech Act on Private International Law or the bilateral treaty between the Czech Republic and Bosnia and Herzegovina. This requires a separate proceeding in Czech court to "recognize" the Bosnian judgment before it can be enforced, which is often slower than suing directly in the Czech Republic.

Regarding VAT on legal services, Czech legal services provided to a Bosnian business entity (B2B) are generally not subject to Czech VAT. This reverse charge mechanism applies if the recipient is a taxable person, which can save you 21% on legal fees compared to domestic clients.

Claims are usually used in the currency of the contract (e.g., EUR), although court fees must be paid in CZK. The ARROWS Law Firm has extensive experience handling these specific non-EU cross-border matters.

Default interest and late payment claims

If your contract does not specify an interest rate, you are entitled to the statutory default interest. The rate is the repo rate set by the Czech National Bank for the first day of the calendar half-year in which delay occurred, plus 8 percentage points.

You are also automatically entitled to a flat-rate compensation of CZK 1,200 per invoice (implementation of the EU Late Payment Directive) if the debtor is an entrepreneur. For Bosnian businesses, note that this CZK 1,200 is a statutory minimum per claim or invoice, often recoverable alongside the principal.

1. Can I claim both contractual default interest and statutory late payment compensation?
Yes. You can claim the agreed interest (or statutory interest if none agreed) plus the CZK 1,200 flat rate compensation for recovery costs.

2. If I did not specify default interest, what applies?
The statutory rate (CNB Repo + 8%) applies automatically by law.

3. Can a court reduce contractual penalties?
Yes. If a contractual penalty (smluvní pokuta) is manifestly exorbitant, the court has the discretion to moderate (reduce) it to a reasonable amount, taking into account the value and importance of the secured obligation.

Conclusion

Debt collection in the Czech Republic is a structured, rule-based process that rewards speed and procedural accuracy. For Bosnian and Herzegovinian companies, the key lies in overcoming the non-EU barrier by utilizing efficient Czech procedures like the Electronic Payment Order.

The ARROWS Law Firm, based in Prague, specializes in assisting foreign creditors and understands the specific treaties and rules applicable to Bosnian entities. We provide end-to-end support, from the initial demand letter to bailiff enforcement.

If you face an unpaid invoice with a Czech partner, contact us. The investment in professional legal guidance typically saves substantially more in avoided errors and recovered costs. Reach out to us at office@arws.cz.

FAQ – Frequently asked legal questions about debt collection in the Czech Republic

1. How long does it typically take to collect a debt?
Undisputed claims via Electronic Payment Order can result in a judgment within 2–4 months. Enforcement depends on asset liquidity. Litigated cases take 6–18 months.

2. Can I collect a debt if I only have emails?
Yes, but the evidentiary weight is lower than a signed contract. We can assess the strength of your email chain before filing.

3. Is a Bosnian judgment enforceable in the Czech Republic?
Not automatically. It requires a formal recognition proceeding under the Act on Private International Law or bilateral treaties. Suing directly in the Czech Republic is often more efficient.

4. What is the difference between EPR and EOP?
EPR (Domestic Electronic Payment Order) is often faster (15-day objection) and cheaper for claims up to CZK 1M. EOP (European Payment Order) has a 30-day objection period but is easier to enforce in other EU states.

5. What if the debtor objects to the payment order?
The case converts to standard litigation. You must then prove your claim in court hearings.

6. What if the statute of limitations is expiring?
File a lawsuit immediately to stop the clock. Contact ARROWS Law Firm for emergency filing.

Disclaimer: The information contained in this article is for general informational purposes only and serves as a basic guide to the issue as of 2026. Although we strive for maximum accuracy, laws and their interpretation evolve over time. We are ARROWS Law Firm, a member of the Czech Bar Association (our supervisory authority), and for the maximum security of our clients, we are insured for professional liability with a limit of CZK 400,000,000. To verify the current wording of the regulations and their application to your specific situation, it is necessary to contact ARROWS Law Firm directly (office@arws.cz). We are not liable for any damages arising from the independent use of the information in this article without prior individual legal consultation.

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