The Czech Republic has created favorable conditions for attracting foreign capital to the country. Among the advantages that attract investors and entrepreneurs from the CIS countries here are equal conditions for Czech citizens and foreigners in doing business, low taxes, a steadily developing economy, growing purchasing power of Czech citizens, a favorable geographical location of the country, the presence of resorts of European importance, a well-developed tourism industry. In addition, many believe that buying a ready-made business in the Czech Republic is the easiest way for business immigration to Europe.
Why it is worth buying a ready-made business in the Czech Republic: briefly about the main thing
Starting a business from scratch, especially in a foreign country, is always difficult, since no one can guarantee one hundred percent success. Moreover, in order for the business to begin to generate income, it may require not so much financial investment as a large investment of time and effort.
Acquisition of a ready-made business in the Czech Republic will help speed up the process. A ready-made business is an already registered firm or company that has a legal address and is registered with the tax authorities.
Such a firm can:
- to be a company with no history. In other words, after registration, its activities did not start and the company exists only on paper;
- engage in a certain type of activity, but at the same time be unprofitable;
- be self-sufficient or bring minimal profit;
- receive a stable profit.
In any case, the buyer benefits from:
- all formalities for registering a business have already been passed;
- the purchase procedure is quite simple and takes a minimum of time;
- when re-registering a company, you can make adjustments: change the legal address, name, etc.;
- the owner of the company enjoys privileges when applying for a business visa, obtaining a residence permit and permanent residence, when conducting real estate transactions, has the right to conclude transactions with residents from the EU, etc.;
- family members of the purchaser can benefit from the family reunification program.
Which industries are the most promising for investing in the Czech Republic
Making a decision to buy an existing enterprise or firm in the Czech Republic requires a clear understanding of what will have to be done in the future and how to make the business generate income. In other words, you need to decide on the industries in which it is worth investing your money. This task is extremely responsible, so it is worth mentioning some of the pitfalls that may lie in wait for a foreign businessman who decides to buy a ready-made business in the Czech Republic.
- First, few people will get rid of a profitable business without good reason. Therefore, before buying a company that is being sold “due to the relocation of the former owner to a new place of residence,” “because of deteriorating health,” because “he is tired of business,” etc., you should check the real state of affairs by ordering a paid audit. Often, the sale of a company can be caused by elementary bankruptcy or company debts.
- Secondly, you need to soberly assess your knowledge in this area and be ready for constant work on yourself. It is impossible to successfully manage a restaurant or hotel and not understand the intricacies of the restaurant or hotel business. Therefore, you should give preference to that business sector in which the buyer will feel confident.
- Third, there is no guarantee that a successful firm, which brought in good income under the previous owner, will remain as prosperous after the change of ownership. In small and medium-sized businesses, the key to success is often the personality of the head of the company, his connections, established schemes of activity, and with his departure the business becomes unviable.
Speaking about which of the types of business activities can become more promising, one should distinguish the situation when it comes to acquiring an already existing, well-developed business in the Czech Republic, from the situation when everything needs to be started practically from scratch.
First of all, beginners should determine those types of services or products that are most in demand in a particular area, that is, study free niches for business.
In addition, it should be borne in mind that the psychology and mentality of Czechs is markedly different from the mentality of CIS citizens. In this regard, many industries close to Russians or Belarusians will fail here.
For example, Czechs - patriots of their national cuisine and Chinese fast food are perceived as exotic.
You shouldn't try to sell building materials here either - Czechs prefer to buy such products in megamarkets of well-known brands.
In addition, like all Europeans, Czechs value the quality of service very highly and instantly share their impressions on social networks. Therefore, it is necessary to initially earn the trust of customers.
The most promising business sectors in the Czech Republic include:
- the sphere of construction - repair and restoration of old buildings, construction of new houses;
- hair and body care - beauty salons, massage and beauty salons, hairdressing salons, etc .;
- veterinary medicine;
- IT technologies;
- gas stations;
- retail trade - food, souvenirs;
- taxi services, cargo transportation.
At the same time, it should be remembered that it will not be possible to make a million dollar fortune in the Czech Republic quickly - you can count on an average of 6-9% of income per year. For example, the guaranteed rental income for residential real estate will be from 4 to 7% per year.
Organizational and legal forms of doing business in the Czech Republic
The correct choice of the form for doing business can have a decisive impact on the further business activities of foreign citizens in the Czech Republic, relieve them of unnecessary financial obligations or bureaucratic procedures. The entrepreneurs themselves decide which organizational and legal form of doing business to choose.
Foreigners (as well as Czech citizens) have the opportunity to conduct their business activities in the following forms:
- limited liability company or S.R.O. with a flat income tax of 19%. An LLC can have up to 50 founders, while its head can be a foreign citizen. The amount of the authorized capital is from 1 CZK and above. To qualify for a long-term national visa to the Czech Republic, the fund must be at least 100 thousand crowns. This form is considered the most popular among the citizens of the CIS;
- open or closed joint stock company - A.S. The authorized capital of such a commercial organization (from 2 million Czech crowns in closed companies and 20 million in open companies) is divided into shares;
- European company - SE with a registered capital of over 120 thousand euros;
- limited company - K.S. on contributed capital;
- public trading company - V.O.S. or full partnership;
- cooperative - družstvo.
Where to look for ready-made companies in the Czech Republic
In the Czech Republic, as in Russia, there are many companies that sell shelf companies, in particular:
- eduvpragu.ru
- firmapartner.ru
- rnocentre.cz
- nesro.com
- profi-kancelar.cz
- firmacr.cz
Judging by the number of sites and the variety of offers, this type of “product” is in demand and this business is actively developing.
As a rule, firms that were specially created for this are put up for sale, have a clean history, a legal address and are registered. In addition, offers for the sale of companies with an ideal history, operating for 2-3 years, are in demand.
The time frame for re-registering a company for a new owner is very tight - from 24 hours to two days.
Today, over 300 thousand firms and companies are registered and operate in the Czech Republic. Most of them appeared after the 1989 “Velvet Revolution”. A study conducted by the international agency Ipsos showed that 58% of the current owners of these firms are not going to continue the "family business" and are ready to sell their business when they receive lucrative offers.
The algorithm for finding a company to buy is simple: go, for example, to the website of the Prague agency “Europe for You” and select “New company in the Czech Republic for 1000 euros” from the menu.
On the page that opens, from the list of companies for sale, select one for viewing.
We study information about the company: the date and place of its registration, status, price, etc.
Many sites offer the "Apply" service: the client describes his preferences, and the company offers him suitable options. This is exactly the case when you can really make a profitable investment.
Confidentiality always accompanies business, so a profitable company is unlikely to be laid out in free access - such offers will wait for a really interested and serious buyer.
In addition to contacting specialized firms, you can search for offers as follows:
- on forums, in the headings of private ads (lifecz.ru)
- on Czech internet free classifieds boards (runet.cz, doska-cz.ru, objavlenija.respublika.cz/68-prodam-biznes).
Here you can find a huge number of offers for the sale of a business, its brief description, price and contact information. However, this option, in comparison with the previous one, has a number of disadvantages. In particular, there is a high probability of buying a pig in a poke (especially if the company has been dormant for several years) with possible wage arrears, unpaid fines and other unfulfilled obligations.
In order not to acquire a troubled firm, you should first check the "purity" of its history. In part, this can be done on the website of the Czech Ministry of Justice, where financial statements of Czech companies are publicly available. The very fact of having regular reports will speak in favor of the company you are interested in.
In addition, it is advisable to contact an accountant who previously worked for the company and will be able to tell what taxes were paid, whether there were unregistered employees in the company, etc.
It will not be superfluous to ask the seller to provide extracts from the social insurance authorities and the financial administration that the company has no debts, as well as a certificate that the company has no criminal record.
The company's e-mail box can also tell a lot - the Czech Law No. 300/2008 obliged each company to create an e-mail address to which government agencies send messages.
It is most reasonable to buy second-hand companies in the Czech Republic with a really operating business or the presence of real estate registered on it.
How to make a purchase correctly
The registration procedure consists of several stages, which will differ depending on how the company was acquired. In the case of a purchase through a specialized company (for example, "Europe for You"), the procedure will be as follows:
- contact the company by phone or email;
- fill out and send to the address of the company a personal questionnaire with the indication of passport and contact details, information about the possible renaming of the company, personal presence or distant registration. If a name change is planned, it is necessary to take into account the requirement that the new name should not repeat the existing ones. Therefore, the new name should be checked at http://overovac.cz/;
- receive from the company for approval a draft purchase agreement, samples of powers of attorney and statements;
- prepare the necessary package of documents and send it to the company;
- make payment in the manner and within the time frame stipulated in the contract;
- receive in person or by express mail originals and copies of documents on the purchase, ownership of the company and its registration with the Czech government.
The company undertakes all actions related to the re-registration of documents in the Trade Register, the Register of Entrepreneurs, the Ministry of Finance, and a banking institution.
Another plus of buying a business through a specialized company is the opportunity to use additional services: accounting support, providing a legal address for a year.
In the case of buying a ready-made company "off-hand", the buyer has to do all this on his own.
Documents that will be required when making a deal
In order to start the checkout process, the seller needs to receive from the buyer:
- a photocopy of the passport;
- a police clearance certificate in the Russian Federation (the certificate is valid for three months);
- a customer-approved contract for the purchase of a company;
- Director's statement with sample signatures for the Trade Register;
- permission from the owner of the property - in case of a change in the legal address;
- powers of attorney for signing an agreement on the purchase of 100% share of the authorized capital, for registering changes in the Commercial Court, obtaining a police clearance certificate in the Czech Republic.
The powers of attorney in the Czech language are certified by the Czech consulate in Moscow. A police clearance certificate in the Russian Federation must be apostilled.
After one hundred percent payment and completion of the transaction, the seller must transfer to the buyer within two weeks:
- papers for registration of the company for the new owner: the original of the sale agreement, copies of extracts from the registers (merchants and entrepreneurs), the founder's decision to transfer the share to the client's name and change the director, the founder's decision to appoint a new director, the current version of the charter, the certificate of registration in Ministry of Finance of the Czech Republic, an agreement on opening a bank account, seal, etc .;
- certificate of absence of debts from the company offered for sale.
The cost of a ready-made company and the terms of reissuance of documents
The cost of a ready-made company in the Czech Republic depends on a number of factors: first of all, on who is selling and which company is being sold.
The location of the company also affects - in Prague and Central Bohemia, prices are 20-30% higher than in Brno or Ostrava.
When buying from specialized companies, the average prices for the acquisition of ready-made companies are as follows:
- with a "clean" history, registered for sale - from 800 to 1200 euros. This includes payment for services. For an additional fee, it is possible to provide additional services:
- purchase for a year or more of a legal address - from 200 to 800 euros;
- remote opening of a bank account - from 800 euros;
- obtaining an apostille for the client's documents - 100 euros;
- with experience, but no profit, with the so-called zero turnover - from 900 to 1300 euros. This option has lost its popularity due to increased immigration to the country. To obtain a residence permit in the Czech Republic, it is necessary for the company to be active: money was received on its account, contracts were concluded, the director received remuneration, at least 4,700 crowns per month were received by the Czech Pension Fund, the Medical Insurance Company. Without all this, even a business visa may be refused;
- the most expensive are companies that generate income. Their prices will also depend on the availability of real estate or vehicles on the balance sheet of the company. In each individual case, the cost of such a company will be negotiated separately and can amount to a large amount - from 500 thousand euros and above (for example, for a hotel or a network of gas stations).
Additional costs include the costs of notarization, apostillization, and forwarding of documents (registered letter - 4 euros, EMS - up to 30 euros, DHL - 60 euros).
When buying from private individuals, prices for ready-made companies that do not have work experience can vary from 400 to 800 euros. However, the risks will be higher here.
The time for processing documents is from 1 to 2-3 weeks. In this case, the buyer has the right to manage the company from the moment of signing the agreement on its acquisition.
Taxation in the Czech Republic
The government of the Czech Republic is trying to make investment in the country more attractive to foreign businesses. Tax policy plays an important role in this process. The taxation of entrepreneurs in the Czech Republic is practically the same as in other EU countries.
- The main mandatory tax is income tax. In 2021, the rate of this tax is 19%. With a zero balance, no income tax is paid.
- The second important tax is value added. The current VAT rate in the Czech Republic is 21%. This tax is obligatory for those companies whose turnover in 12 months amounted to 1 million CZK and more. You can also pay VAT voluntarily - if the company recognizes it as beneficial for itself.
- The third tax is on real estate: apartments, houses, land. The amount of this tax depends on the area, the way the property is used, the number of storeys, and the location in which it belongs. You can calculate the tax amount on the website. In the case of the sale of real estate, you will have to pay the standard sales tax of 4% of the amount.
Correct bookkeeping is the key to success
A professional accountant who speaks Czech and is well versed in Czech law is the key to a successful business in the Czech Republic, or at least a quiet life. Accounting, preparation of financial statements, filing returns, payroll, insurance, tax reduction - all these and many other tasks are solved by an accountant.
The average salary of a full-time accountant in the Czech Republic is 25-30 thousand CZK. Therefore, it makes sense for small firms to use the help of consulting companies and order accounting services. Depending on your needs, you can order one-time consultations, VAT refunds, reporting on different types of taxes, tax optimization, etc., or you can ask for full accounting support. In this case, the costs will be from two to six thousand Czech crowns per month.
Opening a company in the Czech Republic from scratch
There are two ways to open your own company in the Czech Republic from scratch: independently and through a specialized company.
Opening a company on your own will require more time and effort: it is necessary to determine the scope and form of business activity, have the appropriate qualifications, and, if necessary, obtain licenses. In addition, you will need to prepare all the necessary documents, pay state fees and notary fees, translate documents into Czech, certify all constituent documents with a notary, make an authorized capital, etc. Benefits include low cost savings and independence from intermediaries.
Registering a new company with the help of a consulting company will require about the same amount of time and money as buying a registered company. The advantage is that at the exit you will receive a ready-made company registered in your name.
Business in the Czech Republic: what worries Russian citizens the most
Russian citizens who decide for themselves the issue of acquiring or opening a company in the Czech Republic are most interested in questions of the essence of doing business.
Is it possible to acquire a company in the Czech Republic without the personal presence of the buyer?
In case of an independent execution of the transaction, the personal presence of the buyer is required. In the case of acquiring a company through a specialized company, such an opportunity is provided - registration takes place by power of attorney.
Is it possible to change the name, legal address, type of activity after the purchase of the company?
Any changes to the name or address of the company are best made during the process of registering or re-registering the company in the name of the new owner. After the documents are completed, making changes will require additional efforts and financial costs (from 200 to 600 euros).
When, after buying a business, can you apply for permanent residence in the Czech Republic?
According to Czech legislation, you can apply for permanent residence after five years of residence in the country in the status of a residence permit. In connection with the strengthening of government control over the issue of business visas, a company purchased in the Czech Republic should not be fictitious - when extending a residence permit, the authorities first of all pay attention to how the company pays taxes and its balance sheet.
What should you look for when buying a business?
When buying a ready-made company, you should remember that a well-functioning business is sold "quietly", without attracting the attention of competitors and not scaring away regular customers. It is also necessary to remember about establishing personal contacts - often information received from friends or acquaintances helps to find a suitable object for a profitable investment of capital.
Moments that require increased attention from the buyer: the seller's persistence in urgently completing the transaction, the inaccessibility of information about the financial and legal status of the company, unconvincing reasons for selling the business, providing inaccurate or distorted information about the company's activities.
In this case, it is worth monitoring the company and signing a special agreement before the purchase on the guarantee of the absence of debts, unpaid loans, according to which all responsibility falls on the seller.
Conclusion
The Czech Republic, a member of the EU, a country located in the very center of Europe, is of great interest to citizens of the CIS in terms of organizing their own business here and the subsequent registration of a residence permit and permanent residence. The economy is developing steadily in the state, there is transparent legislation, a simple procedure for registering a business, and the Czech government is interested in the inflow of foreign investments.
One of the most popular ways to settle in this country for a long time is to buy a business in the Czech Republic. A large selection of offers, the presence of specialized companies for the sale of firms and the provision of services for the execution of the transaction makes this process much easier.
It should be borne in mind that recently the policy of the Czech state in relation to firms with zero income has tightened: in order for a business owner to obtain a residence permit, and subsequently permanent residence in the Czech Republic, his company must work, create jobs and generate income ...
