How to Enter the Czech Market as an Irish Company: Legal and Operational Essentials

This comprehensive guide addresses the critical strategic and legal considerations Irish companies must navigate when establishing operations in the Czech Republic. Irish businesses face a fundamental transition from the Common Law legal framework to the Civil Law system, requiring careful attention to corporate structure, compliance, and tax obligations. This report provides actionable intelligence for successful market entry while minimizing legal risks.

Understanding the fundamental legal transition from Ireland to the Czech Republic

The transition from Ireland's Common Law legal tradition to the Czech Republic's Civil Law system represents far more than a simple change in jurisdiction. The philosophical and operational differences between these two legal systems create unexpected complications that affect every aspect of business operations.

In the Common Law system familiar to Irish businesses, courts create binding precedent through case decisions. The Czech Civil Law system, by contrast, relies on comprehensive statutory codes and formal written regulations where the law is explicit and courts follow these written provisions.

The implications of this transition are substantial and concrete. Irish company directors accustomed to a Company Secretary role as the primary compliance officer will find that Czech law places different emphasis and responsibility.

Under Czech law, the statutory representative—known as the jednatel—bears personal liability for the company's compliance and regulatory adherence. This represents not merely a title change but a material shift in accountability.

The jednatel's duties include what Czech law calls the "Duty of Care of a Proper Manager" ( péče řádného hospodáře ). This standard differs from fiduciary duties in Irish law, and violations can result in personal liability for damages, potential criminal liability, and personal responsibility for company debts.

Irish businesses frequently attempt to simply copy their Irish Articles of Association and founding documents into Czech legal forms, an approach that creates registration delays. Czech corporate law mandates specific provisions regarding voting procedures, profit distribution, and management authority.

Missing these mandatory elements renders company formation invalid, forcing businesses to restart the registration process at considerable expense. The seemingly simple step of translating Irish corporate documents into Czech requires expert local knowledge to ensure compliance with mandatory legal provisions.

The choice between branch and subsidiary structures

Irish companies entering the Czech market must make a fundamental decision that carries profound consequences for liability, taxation, and operational flexibility: whether to establish a branch office or create a subsidiary limited liability company (s.r.o.).

A branch office ( odštěpný závod ) represents an extension of the parent company and carries the most significant liability exposure for Irish firms. A branch is not a separate legal entity, meaning the Irish parent company retains full liability for all actions and debts.

All branch operations must maintain double-entry accounting records, must register in the Commercial Register, and must comply with all Czech regulations despite lacking separate legal status. The primary advantage of a branch is potentially simpler administrative structure in the early stages.

A limited liability company (s.r.o.) creates an entirely separate legal entity with its own legal personality, rights, and obligations. This structure provides substantial liability protection—the Czech parent company is liable only for debts and obligations up to its registered capital and assets.

The s.r.o. structure requires minimum registered capital, though the Czech Republic reduced this requirement to the symbolic level of 1 Czech koruna. The s.r.o. must have at least one managing director (jednatel) and must maintain its own accounting records in Czech.

For most Irish companies, despite higher establishment costs, the s.r.o. structure offers superior risk management because it creates a firewall between the Irish parent company and Czech operations. This structure becomes essential for companies operating in higher-risk industries or seeking to limit their exposure.

Establishing legal entity status: Registration requirements and procedural complexity

Irish companies beginning the Czech registration process face their first significant shock when confronted with the formal requirements of the Czech Civil Law system. Unlike Ireland's increasingly digital-first processes, the Czech Republic maintains extensive requirements for notarized documents and certified signatures.

For the establishment of an s.r.o., Czech law requires that the founding deed must be executed before a Czech notary public in the form of a public deed ( notářský zápis ). This requirement creates several practical challenges for Irish companies.

First, the Irish parent company cannot simply authorize an agent remotely; Czech law requires that the founders either sign the deed personally or provide a specially certified power of attorney. Second, the founding deed must contain specific mandatory provisions prescribed by the Business Corporations Act.

The notary's role in Czech legal procedure differs significantly from the notarization process with which Irish businesses are familiar. Czech notaries do not merely witness signatures; they verify the authenticity of documents and confirm the legal capacity of the parties.

Once the notarized founding deed is prepared, the Irish company must ensure all supporting documents comply with Czech requirements for translation and authentication. Every document issued outside the Czech Republic must be translated into Czech by a certified Czech translator.

Ireland is a party to the Hague Apostille Convention, so an apostille is generally required to authenticate the origin of foreign public documents. These authentication requirements are not formalities that Czech banks and authorities might overlook—they enforce them strictly.

A simple English-language translation prepared by a general translation service will not satisfy Czech authorities. The translation must be provided by a translator certified and registered with the Czech government, who must affix their official seal and provide their registration number.

Registration in the Commercial Register and Trade Licensing Register

After the founding deed is properly notarized and all supporting documents are authenticated and translated, the Irish company must submit its application to the Commercial Register ( Obchodní rejstřík ). This official registry serves as the definitive record of all Czech legal entities.

Critically, a company does not achieve legal status and cannot legally conduct business until it is registered in the Commercial Register. The period between the company's formation and its registration is a limbo period where the company technically does not exist for business purposes.

The Commercial Register application must be submitted within six months of the founding deed's execution. The typical processing time is five working days if the submission contains no errors, but errors in supporting documents trigger rejection and require resubmission.

Alongside Commercial Register registration, the Irish company must obtain a trade license ( živnostenské oprávnění ) from the Trade Licensing Office. While Commercial Register registration creates legal entity status, trade licensing authorization is required before the company can actually commence specific business activities.

For many general business activities, the process is a straightforward notification requiring roughly 2-3 working days processing time. However, for "regulated" or "concession" trades—including financial services—formal validation of qualifications applies.

Conducting business without a valid trade license constitutes unauthorized business activity subject to fines reaching up to 500,000 Czech korunas for notifiable trades.

Ultimate beneficial owner (UBO) registration requirements

A regulatory requirement that Irish companies frequently overlook until confronted by banking or tax authorities is the registration of Ultimate Beneficial Owners in the Czech UBO Register. Under Act No. 37/2021 Coll., Czech law requires that every Czech legal entity identify and register all natural persons who are the ultimate beneficial owners.

A UBO is any natural person who directly or indirectly holds more than 25 percent of the company's capital or voting rights, or who is entitled to receive more than 25 percent of the company's profits. This applies whether ownership is held directly or indirectly through chains of ownership.

If after exhausting all reasonable efforts the company cannot identify a UBO meeting these criteria, the law establishes a substitute mechanism. In such cases, members of the company's top management must be registered as UBOs.

When a UBO is not properly registered, the company is prohibited from paying profit distributions or dividend payments to that shareholder. Additionally, an unregistered UBO loses voting rights at general meetings and cannot exercise shareholder prerogatives.

The company must submit UBO information electronically to the competent registration court or through a notary public. Irish companies establishing Czech subsidiaries must ensure that this registration occurs immediately after Commercial Register registration.

Banking and financial infrastructure challenges

The establishment of corporate entity status is frequently overshadowed by the difficulty of opening a bank account in the Czech Republic. Companies are often shocked to discover that opening a bank account requires a separate and equally time-consuming compliance process.

Czech banks impose exceptionally strict AML requirements for foreign-owned structures, particularly those with complex ownership arrangements. If an Irish company has a complex ownership structure, banks frequently refuse to open accounts until the ultimate beneficial ownership is verified.

Without a Czech bank account, the company cannot legally conduct certain business activities or pay taxes easily. The documentation requirements for bank account opening exceed standard identification procedures, often requiring in-person meetings with company representatives.

The procedural timeline for bank account opening, once all documentation is gathered, typically extends 2-4 weeks after submission. However, incomplete documents or unclear business purposes can extend the operational timeline by 4-8 weeks specifically due to banking delays.

Cross-border payment requirements and compliance

Once a Czech bank account is established, Irish companies must navigate the regulatory requirements for cross-border payments. These requirements exist at European Union-level regulations, Czech national regulations, and individual bank policies.

The Czech Republic maintains an electronic communication system for official government correspondence known as the Data Box ( datová schránka ), which is mandatory for all legal entities. Upon registration in the Commercial Register, the company is automatically assigned a Data Box, which serves as the primary channel for communication with authorities.

Failure to monitor the Data Box creates the risk that the company receives no notice of important regulatory communications. Under the fiction of delivery, a message is deemed delivered 10 days after arriving in the Data Box, even if not opened.

International transfers, particularly those involving larger amounts or unfamiliar counterparties, are frequently subject to enhanced scrutiny by Czech banks. Banks may delay payment processing pending verification of transaction purpose or source of funds.

FAQ – Legal Tips on Banking and Financial Infrastructure

• How long does it typically take to open a bank account in the Czech Republic after the company is registered?
  From the date the bank receives complete and properly documented application materials, processing typically requires 2-4 weeks. However, gathering all required documents, obtaining certifications, and resolving any information gaps often extends the total timeline to 4-8 weeks or longer. Irish companies should not assume they can establish banking infrastructure on the timeline of Irish bank account opening. Need legal help? Contact us at office@arws.cz.
• If our Czech bank rejects an international transfer from our Irish parent company, what options do we have?
  Czech banks are required to reject transfers lacking sufficient documentation of legitimate business purpose or proper authorization. Rather than escalating complaints, contact your bank's compliance department to determine what specific information they require to approve the transfer. The bank will usually specify exactly what documentation would resolve their concerns. Resolving this cooperatively typically achieves approval within 1-2 weeks. For immediate assistance, write to us at office@arws.cz.
• Do we need to establish a Czech bank account if we conduct only minimal business activities in the Czech Republic?
  While EU law allows using an account from another member state, Czech practice makes a local account highly advisable. Tax authorities and Social Security Administration refunds are often problematic with foreign IBANs, and many local utilities or service providers may not accept direct debits from non-Czech accounts. For operational efficiency and regulatory compliance, establishing a Czech account is essential for companies conducting regular business activities. Contact us at office@arws.cz.

Tax obligations and financial reporting requirements

Irish companies establishing operations in the Czech Republic immediately trigger Czech taxation obligations. The Czech Republic applies a corporate income tax rate of 21 percent on company profits, which represents the standard rate that applies to most business activities.

VAT registration requirements trigger based on specific turnover thresholds. For companies conducting business exclusively within the Czech Republic, VAT registration becomes mandatory when turnover exceeds 2,000,000 Czech korunas in any 12 consecutive calendar months.

However, for companies conducting intra-community transactions or receiving services from abroad, the status of an "Identified Person" or full VAT payer may trigger immediately regardless of domestic turnover. Irish companies receiving services from their Irish parent often become liable for VAT under the reverse charge mechanism.

Registered companies must maintain detailed records of all VAT-taxable transactions and file VAT returns on a monthly or quarterly basis. They must also file "Control Reports" ( Kontrolní hlášení ) matching individual invoices against the system.

The VAT return filing deadline is the 25th day of the month following the reporting period. Failure to file VAT returns or Control Reports triggers automatic penalties, which can reach 50,000 Czech korunas for failing to file a Control Report after a summons.

Accounting records, financial statement preparation, and filing requirements

Czech law imposes extensive accounting and financial reporting obligations on all businesses operating in the Czech Republic. The Accounting Act requires that all Czech legal entities maintain double-entry accounting records that provide a complete and truthful representation of the company's financial position.

Since 2024, Czech law allows companies to maintain accounts in a functional currency (EUR, USD, or GBP) if it represents the primary economic environment of the entity. However, the requirement for Czech-language descriptions in accounting records remains, creating an operational barrier for foreign companies.

Most Irish companies find that engaging a Czech accounting firm to handle accounting functions is the practical solution. Irish companies must also file annual financial statements with the Commercial Register, including a Balance Sheet and Income Statement.

The financial statement filing requirement serves not merely as a reporting obligation but as a critical registration maintenance function. Failure to file financial statements triggers penalties and administrative consequences, including potential striking of the company from the register.

Deadline compliance and registration obligations

Irish companies commonly underestimate the quantity and specificity of regulatory filing deadlines governing Czech operations. Beyond VAT and financial statement deadlines, companies must comply with deadlines for registering employees with social security and health insurance authorities.

The initial tax registration for income tax must occur within 15 days of company establishment with the Czech tax authority. Employment-related registrations must occur within 8 days of the employee commencing work.

Companies hiring foreign employees face additional complexity, as foreign employees must be reported to the Labour Office on the day of commencement. Failure to do so creates exposure to substantial fines under illegal employment provisions.

The practical consequence is that the period immediately following company registration is critical for regulatory compliance. Seemingly independent registrations are actually interconnected, as social security registration often requires proof of tax registration.

FAQ – Legal Tips on Taxation and Financial Reporting

• Must we file financial statements in Czech if our parent company files consolidated financial statements in English?
  Yes. Czech law requires that all Czech legal entities file financial statements in the Collection of Deeds of the Commercial Register. These must be prepared according to Czech accounting standards (or IFRS if applicable/mandated) and must be in the Czech language. The requirement is strict and cannot be waived based on parent company reporting practices. For immediate assistance, write to us at office@arws.cz.
• What happens if we miss the VAT filing deadline or submit an incorrect VAT calculation?
  Late VAT filing triggers penalties. Interest on late payment is calculated at the Czech National Bank's repo rate plus eight percentage points. Additionally, failure to submit the "Control Report" on time attracts specific fines ranging from 1,000 to 50,000 Czech korunas depending on the delay and whether the authority had to send a summons.
• Can we maintain accounting records in English and translate them to Czech only for filing purposes?
  The underlying accounting documents and entries must be intelligible and comply with the Czech Accounting Act. While software may be in English, the outputs and descriptions must be accessible to Czech authorities in Czech. Since 2024, you may use EUR, USD, or GBP as a functional currency for accounting if specific conditions are met, but the compliance with Czech accounting standards remains mandatory. Need legal help? Contact us at office@arws.cz.

Employment law and labor compliance

Irish companies establishing Czech operations frequently proceed with employment as if Irish employment law continues to apply. However, Czech labor law imposes substantially different requirements that create legal risks if ignored.

A valid employment contract in the Czech Republic must be concluded in writing and must include certain mandatory minimum provisions. These include the type of work, the place where work will be performed, and the date employment commences.

Beyond these statutory minimums, the employer must also inform employees in writing regarding the job description, annual leave entitlement, notice periods, and weekly working hours. Failure to include mandatory provisions can render contract terms unenforceable.

Czech law limits fixed-term contracts to a maximum of three years duration, and limits the number of consecutive renewals to two additional contracts. After this period, employees are presumed to be permanently employed regardless of how the contract is formally characterized.

The requirement that employment contracts be concluded in a language the employee understands creates complications for foreign employees. The practical solution most companies adopt is bilingual contracts drafted in both Czech and the employee's native language.

Foreign employee employment and permit requirements

Irish companies frequently attempt to staff their Czech operations with Irish expatriates or third-country employees. The regulatory framework differs substantially depending on whether the foreign employee is an EU citizen or a third-country national.

EU citizens (including Irish citizens) have freedom of movement within the European Union and may work in the Czech Republic without work permits. However, the employer must still report their employment to the Labour Office no later than the day of commencement.

Third-country nationals generally must obtain an Employee Card or a Blue Card before commencing employment. The application requires extensive documentation, including a vacancy report to the Labour Office and a signed employment contract.

Companies that hire foreign employees before valid permits are obtained face penalties for illegal employment. The fine for enabling illegal work can reach up to 10,000,000 Czech korunas, and the employer may be liable for the costs of the foreigner's expulsion.

Social security and health insurance contributions create an additional layer of complexity. The employer is responsible for calculating contributions accurately and remitting them to authorities.

Mandatory workplace policies and compliance

Czech employment law mandates that employers establish certain workplace policies and compliance procedures. For companies employing 50 or more employees, Czech law mandates implementation of a whistleblowing policy establishing internal channels for reporting workplace violations.

The statutory maximum working week is 40 hours, and the employer must provide employees with work breaks of at least 30 minutes after a maximum of 6 hours of work. Employees are entitled to minimum continuous rest of 11 hours between shifts.

Overtime work can only be ordered in exceptional operational reasons and is capped by law. Overtime must be compensated at minimum 125 percent of regular wage rates (or time off in lieu), with additional premiums for night or weekend work.

Companies frequently violate these requirements through inadequate compensation structures or record-keeping failures. The employer must maintain precise records of working time for each employee showing shift start and end times.

FAQ – Legal Tips on Employment Compliance

• Can we transfer an Irish employee to our Czech subsidiary without going through formal employment permit procedures since she is an EU citizen?
  Irish and EU citizens enjoy freedom of movement and may work in the Czech Republic without formal work permits. However, the employer must report the employment to the Labour Office on the day of commencement. Furthermore, proper employment contracts in compliance with Czech law must be concluded, and social security and health insurance contributions must be registered and paid in the Czech Republic (unless an A1 certificate applies for posted workers). Contact us at office@arws.cz.
• What happens if we hire a third-country employee before their Employee Card is approved?
  Hiring a non-EU national without a valid work/residence permit constitutes illegal employment. The employer faces potential penalties up to 10,000,000 Czech korunas. Proper procedure requires obtaining the Employee Card approval before the employee actually begins working. For immediate assistance, write to us at office@arws.cz.
• Must we implement whistleblowing procedures if we have only 40 employees?
  The mandatory requirement to establish an internal whistleblowing system under the Czech Whistleblower Protection Act applies to employers with 50 or more employees. Employers with fewer than 50 employees are not legally required to implement the formal internal system, though they must not penalize whistleblowers. Need legal help? Contact us at office@arws.cz.

Risk management: Identification and mitigation strategies

Risks and Sanctions	How ARROWS Law Firm Helps – office@arws.cz
Incomplete or Inadequate Founding Documentation: Founding deed missing mandatory Czech law provisions, improperly notarized documents, or missing required signatures rendering company formation invalid and preventing Commercial Register registration.	Expert Document Preparation: ARROWS Law Firm lawyers prepare founding deeds and corporate documents ensuring full compliance with Czech Business Corporations Act requirements.
Translation and Authentication Failures: English-language documents submitted without certified Czech translation or proper apostille resulting in Commercial Register rejection and application delays extending timelines 4-8 weeks.	Professional Translation Coordination: ARROWS Law Firm coordinates certified translation of all corporate documents and arranges apostille or superlegalization through proper governmental authorities.
Tax Registration Non-Compliance: Failure to register with Czech tax authority within statutory deadlines triggering penalties, creation of uncertainty about actual tax liability commencement date, and potential tax audits examining all activities from company establishment.	Coordinated Tax Registration: ARROWS Law Firm ensures timely registration with tax authorities coordinated with Commercial Register and trade licensing registrations, preventing deadline violations.
VAT Registration and Calculation Errors: Incorrect VAT threshold determination, failure to register when required (especially for cross-border services), or incorrect VAT calculations triggering penalties and interest charges.	VAT Compliance Strategy: ARROWS Law Firm evaluates company's specific turnover and transaction types, determines VAT registration requirements, and ensures timely registration.
Employment Non-Compliance: Hiring foreign employees without Employee Cards; inadequate employment contracts missing Czech-mandated provisions; non-payment or underpayment of social security contributions.	Employment Law Compliance: ARROWS Law Firm prepares Czech-compliant employment contracts, manages foreign employee permitting procedures, and ensures proper social security and health insurance registration.
Accounting and Financial Statement Non-Compliance: Failure to maintain Czech-language double-entry accounting records; late filing of annual financial statements; inadequate financial statement preparation triggering Commercial Register fines and tax authority investigations.	Accounting Coordination: ARROWS Law Firm coordinates with certified Czech accounting firms ensuring proper maintenance of accounting records, timely preparation of financial statements compliant with Czech standards.
UBO Registration Failures: Failure to register Ultimate Beneficial Owners as required by law triggering prohibition on dividend payments, suspension of voting rights, fines to 500,000 Czech korunas, and practical inability to operate.	UBO Registration Management: ARROWS Law Firm identifies all natural persons meeting UBO definition under Czech law, prepares required documentation, and manages electronic registration.
Banking Infrastructure Delays: Inability to open Czech bank account due to incomplete documentation, missing certifications, or unclear business purpose resulting in inability to receive payments, pay employees, or demonstrate legitimate business operations.	Bank Account Opening Support: ARROWS Law Firm prepares complete documentation packages addressing bank AML compliance requirements and obtains necessary certifications.

Executive summary for management

For Irish companies establishing Czech operations, several factors require immediate senior management attention and decision-making:

• Legal System Transition Creates Irreversible Structural Implications: The transition from Common Law to Civil Law jurisdiction fundamentally alters corporate governance, director liability, and regulatory compliance requirements. The choice between branch and subsidiary structure carries permanent consequences for asset protection and liability exposure that cannot be easily reversed after implementation. Senior management must engage qualified Czech legal counsel before commencing operations to ensure structural decisions align with corporate risk tolerance and strategic objectives.
• Regulatory Compliance Timeline Extends Far Beyond Company Registration: While Commercial Register registration appears achievable in 5-10 business days, obtaining bank accounts, registering employees, filing tax returns, and achieving full operational status typically requires 8-12 weeks or longer. Companies with compressed operational timelines face substantial risk of non-compliance, fines, and operational disruption. Management must plan implementation schedules accommodating realistic regulatory timelines rather than assumptions based on Irish experience.
• Documentation Requirements and Procedural Complexity Create Compound Risks: Czech law's extensive formality requirements regarding notarization, translation, certification, and authentication are not optional administrative procedures but mandatory legal requirements affecting contract validity. Procedural errors cascade through subsequent regulatory registrations, creating compound delays and penalties. Attempting to manage documentation requirements through general business service providers rather than specialized Czech legal counsel frequently results in rejection.
• Tax and Employment Compliance Creates Ongoing Operational Burdens: Beyond initial setup, ongoing compliance with Czech tax law, employment law, and regulatory requirements demands continuous attention. Failure in any compliance area triggers cascading penalties and regulatory consequences affecting the company's ability to conduct normal operations.
• Specialized Legal Counsel Rapidly Becomes Essential Rather Than Optional: The complexity and interconnectedness of Czech regulatory requirements create substantial risk that management attempting to navigate setup processes independently will create costly errors. ARROWS Law Firm's daily engagement with these issues for international clients significantly reduces implementation timelines, eliminates procedural errors, and ensures compliance structures protecting the company from fines.

Conclusion of the article

Irish companies seeking to establish operations in the Czech Republic face a fundamentally different legal, regulatory, and operational environment than the Common Law jurisdiction they know. The transition from Irish company law to Czech civil law and the extensive formality requirements for documentation create substantial complexity.

The choice between establishing a branch or subsidiary structure carries permanent consequences for liability protection and asset security. The need to register with tax authorities, trade licensing offices, social security administrations, and health insurance companies creates interconnected deadlines where missing one deadline cascades through subsequent registrations.

ARROWS Law Firm's lawyers regularly handle these complex market entry processes for Irish and other international companies establishing Czech operations. Because ARROWS Law Firm specialists understand both the Czech regulatory environment and the specific challenges foreign companies face, engagement with ARROWS dramatically reduces implementation timelines.

The seemingly straightforward step of establishing a Czech company involves more complexity than it initially appears, with individual steps containing hidden exceptions. Contact ARROWS Law Firm today at office@arws.cz and allow our experienced lawyers to manage your Czech market entry.

FAQ – Frequently asked legal questions about entering the Czech market as an Irish company

1. Do I need to reside in the Czech Republic to serve as managing director of my Czech company?
No, residency in the Czech Republic is not required. You may manage the company from Ireland and serve as managing director (jednatel) remotely. However, you must provide a clean criminal record extract from Ireland (officially translated to Czech) and you must be properly registered as a managing director in the Commercial Register. If you as an Irish individual serve as managing director, you should also understand that Czech law imposes personal liability on managing directors for breaches of the "duty of care of a proper manager." Contact us at office@arws.cz.

2. What is the minimum capital required to establish a Czech limited liability company (s.r.o.)?
The minimum registered capital is 1 Czech koruna, one of the lowest capital requirements in the European Union. This symbolic capital requirement makes Czech market entry accessible to businesses of virtually any size. However, companies underestimating the capital required for actual operational startup frequently encounter difficulties funding initial operations. While capital requirements are minimal, practical operational funding requirements are often substantial, and a higher capital is often recommended for credibility.

3. How long does the entire process of establishing a Czech company take from decision to full operational status?
Commercial Register registration typically completes within 5 working days if documentation is error-free (or even faster via direct notary registration). However, the entire process including gathering authenticated documents, obtaining trade licenses, opening bank accounts, registering with tax authorities and social security, and establishing employment compliance typically requires 8-12 weeks. Companies frequently underestimate this timeline and encounter operational disruption due to incomplete setup.

4. Can we maintain accounting records in English if our company operates primarily with English-speaking employees?
No. Czech law mandates that accounting records be compliant with the Accounting Act, which requires they be intelligible and in the Czech language for control purposes. While the functional currency can be EUR, USD, or GBP (since 2024), the description of the records must be available in Czech. Most companies engage a Czech accounting firm to ensure compliance. Do not hesitate to contact our firm – office@arws.cz.

5. What happens if we hire foreign employees without obtaining proper Employment Permits and Residence Permits first?
Hiring non-EU foreign employees before proper permits are obtained constitutes illegal employment under Czech law. The company faces potential penalties reaching 10,000,000 Czech korunas and can be liable for expulsion costs. Individual company managers may face criminal liability. Proper procedure requires obtaining the Employee Card or Blue Card approval before employment commences.

6. How frequently must we update information in the Commercial Register after company formation?
Companies must file updated information whenever material changes occur regarding managing directors, shareholders, registered office address, business scope, or other information in the Commercial Register. The requirement is continuous—companies cannot allow outdated information to remain registered. Material information changes must typically be registered without undue delay. If you require advice on when Commercial Register updates are required, contact office@arws.cz.

Disclaimer: The information contained in this article is for general informational purposes only and serves as a basic guide to the issue. Although we strive for maximum accuracy in the content, legal regulations and their interpretation evolve over time. To verify the current wording of the regulations and their application to your specific situation, it is therefore necessary to contact ARROWS Law Firm directly (office@arws.cz). We accept no responsibility for any damage or complications arising from the independent use of the information in this article without our prior individual legal consultation and expert assessment. Each case requires a tailor-made solution, so please do not hesitate to contact us.