Establishment of Czech Branch
Establishment of Branch in Czech Republic
Czech branch (permanent establishment in Czech Republic)
A branch office (in Czech: “organizační složka”) is not a separate legal entity, but functions as the representative of the establishing foreign company and incurs obligations on the foreign company's behalf. The law under which the branch's parent entity was founded also applies to the branch's internal dealings.
For the establishment and the existence of the Czech branch office it is necessary to authorize an individual as a Head of the Czech branch office. Such individual shall be entered in the Czech Commercial Register and is entitled to undertake all acts concerning the branch office on behalf of the founder.
Establishment of Czech branch
Establishing a Czech branch office under the Czech law involves two steps. The first step is to obtain an applicable Czech trade license or certificate (it depends upon the nature of each of the businesses to be carried out). The application shall be filed in the Czech Trade License Office for the geographic area within which the Czech branch office will have the registered office. The second step is the registration of the Czech branch in the Czech Commercial Register. Compared to legal entities from third countries, legal entities from the EU do not mandatorily have to be registered in the Czech Commercial Register. However, registration is always recommendable as it makes all dealings and processes in the Czech Republic much easier.
Registration of Czech branch in Czech Commercial Register
To register a branch, the following documents are required:
(a) notarized copy of the founder company´s corporate documentation (extract from the commercial register);
(b) two original certified copies of corporate resolutions indicating the establishment of the Czech branch office and pointing out the entity empowered to act on behalf of the Founder (Head of the branch office);
(c) Czech trade license or trade certificate;
(d) notarized specimen signature of the Head of the Czech branch office;
(e) the consent of the owner of the premises, where the seat of the Czech branch will be registered;
(f) record of non-criminal activity of the Head of the Czech branch office issued by the Czech Criminal Register not earlier than three months prior to its presentation to the Commercial Court and similar records from his/her home country and all countries where he/she has been residing for more than three months during the last three years;
(g) representation by the Head of the Czech branch office that he/she has not been subject to bankruptcy during the past three years and that no ban on business activities related to the intended activities of the Czech branch is currently imposed by any court or any administrative authority up on him/her.
A Czech branch´s authorization to conduct business activities in the Czech Republic is established on the day the branch is entered into the Czech Commercial Register. The registration court shall decide on the registration of the branch office within 5 business days from the date of application. The scope of business of the Czech branch must correspond to the scope of business of the company (i.e. the branch office cannot pursue business activities which do not fall within the scope of business of the founder).
The necessary forms for entering the Czech company into the Commercial Register can be found in Czech on the website of the Commercial Register at the Czech Ministry of Justice. Documents presented to the Commercial Register must be in Czech, including all their attachments; any deeds in a foreign language must have a legally certified translation unless it is drawn up in one of the official languages of the European Union (in that case a simple translation is sufficient). For certain types of foreign deeds (e.g. an extract from a criminal register or commercial register) a special form of higher authentication is required, one that certifies the authenticity of the issuing authority, generally identified as an apostille or ‘super-legalisation’, depending on whether the country issuing the deed is a signatory to the so-called Hague Apostille Convention.
The statutory deadline for registration of the company is five working days from submission of the application. If, within this period, the court does not register the company or requests additional documents from the applicants, the company is considered as registered. The notary can register the company into the Commercial Register almost immediately.
In order to submit an application to the Czech Commercial Register or Czech Trade Register, it is not mandatory to be represented by a lawyer. Nonetheless, with respect to fulfilment of formal requirements, we recommend that an attorney-at-law is engaged.
The average amount of time needed to establish a Czech branch is approximately 19 days but registration within a couple of days is also possible.
After the new Czech branch is registered in the Czech Commercial Register you can check the registration at the web page of the Czech Ministry of Justice and the company must ensure that all required information is registered with the Czech Financial Authority.
Czech Data Box
The head of the new Czech branch will receive access details to the data box. The Czech data box is an electronic storage site used for the delivery of official documents and for communication with Czech public authorities. Data boxes are established and managed by the Czech Ministry of Interior. A data box is not obligatory for citizens and private individuals who carry out business activities. Establishment of a data box is obligatory for all Czech legal entities. A document (data message), which is delivered to a data box, is delivered at the moment the authorised individual logs into the data box. The fiction of delivery applies in case of data box. If you do not log in to your data box within a period of 10 days from the day on which the document was delivered to the data box, this document is deemed to have been delivered on the last day before the expiry of this period. Delivery of the document has the same legal effect as personal delivery. For more information, please see Datove schranky, unfortunately in Czech language only.
Delivery of access data to the Czech Data Box abroad
Access data can only be sent to following countries, which allows the delivery service exclusively to the addressee's own hands. In the event that the Authorized Person (eg head of the Czech branch) has an address of residence in one of the countries that do not allow the service to be delivered solely to the addressee, a data box and access rights are created, but an explanatory letter is sent to that person stating the reasons why access data cannot be sent. This letter also includes a proposal for how to obtain access data using Czech POINT at embassies of the Czech Republic.
In such cases, the recipient of a letter at the Czech POINT office will ask the embassy to revoke the original access data and issue new ones. The application will specify the e-mail address to which the activation link is sent. With its help and using the data in the application confirmation, it then collects new access data to its data box on its computer (see instructions for collecting access data using the so-called virtual envelope).
ECOVIS Ježek is a Czech law firm providing, amongst others, legal advice in connection with establishment of Czech branch offices and their registration.
Eliška Čáslavská has many years of experience in corporate matters related to Czech companies and Czech branch offices.
If you need quality legal advice and representation in Czech corporate matters, you can contact us at any time.
t: +420 226 236 600 | e: eliska.caslavska@ecovislegal.cz
Professional assistance in establishment of Czech branch
Our Czech law firm can assists you in opening of the Czech branch and starting the business in the Czech Republic. We can ensure for all steps and for proper registration with the Czech Commercial Register.
For more information, contact us at:
ECOVIS ježek, advokátní kancelář s.r.o.
Betlémské nám. 6
110 00 Praha 1
e-mail: mojmir.jezek@ecovislegal.cz
www.ecovislegal.cz
About ECOVIS ježek advokátní kancelář s.r.o.
The Czech law office in Prague ECOVIS ježek practices mainly in the area of Czech commercial law, Czech real estate law, representation at Czech courts, administrative bodies and arbitration courts, as well as Czech finance and banking law, and provides full-fledged advice in all areas, making it a suitable alternative for clients of international law offices. The international dimension of the Czech legal services provided is ensured through past experience and through co-operation with leading legal offices in most European countries, the US, and other jurisdictions. The Czech lawyers of the ECOVIS ježek team have many years of experience from leading international law offices and tax companies, in providing legal advice to multinational corporations, large Czech companies, but also to medium-sized companies and individual clients. For more information, go to www.ecovislegal.cz/en.
The information contained on this website is a legal advertisement. Do not consider anything on this website as legal advice and nothing on this website is an advocate-client relationship. Before discussing anything about what you read on these pages, arrange a legal consultation with us. Past results are not a guarantee of future results, and previous results do not indicate or predict future results. Each case is different and must be judged according to its own circumstances.
