Czech Republic: Operating a Business

Společnost s ručením omezeným or SRO (Limited Liability Company)

Number of partners: No minimum.
Maximum: 50.
Capital (max/min): CZK 1
Shareholders and liability: Partners' liability is limited to the amount contributed.

Akciová společnost or AS (Public Limited Company)

Number of partners: No minimum: one or more; can be a sole proprietorship.
Capital (max/min): Minimum CZK 2 million when established without public bid and at least 20% must be released before the constituting general meeting. Minimum CZK 20 million with public bid.
Shareholders and liability: Liability is limited to the amount contributed.

Veřejná bchodní společnost or VOS (General Partnership)

Number of partners: At least 2 natural partners.
Capital (max/min): No minimum capital requirement.
Shareholders and liability: Liability is unlimited for all partners.

Limited Partnership (KS)

Number of partners: At least 2 partners: 1 active partner and 1 sleeping partner.
Capital (max/min): No minimum capital but the input of the partner with limited liability must be at least CZK 5,000.
Shareholders and liability: Liability of active partners is unlimited. Liability of sleeping partners is limited to the amount contributed.

Business Setup Procedures

The Competent Organisation

Ministry of Industry and Trade

Czech Trade Inspection Authority

For Further Information

Consult Doing Business Website, to know about procedures to start a Business in Czech Republic.

Financial Information Directories

Dun & Bradstreet - Worldwide directory with financial information on businesses

Justice.cz - Public register of companies

Recovery Procedures

Principle

Basic principle of recovery is equal conditions for all creditors (par conditio creditorum). For a bankruptcy, there are three basic conditions: decay, many creditors and enough assets for covering the costs of bankruptcy procedure. More information is available in the Act. No182/2006 Coll.
There is also the 2007 Bankruptcy law, which addressed important structural impediments such as the slow and uneven performance of the courts, weakness of the legal standing of creditors, and the lack of provisions for corporate restructuring.

Minimum Debt-to-Capital Ratio Triggering Liquidation

Not specified.

Bankruptcy Laws

Act. No 182/2006 Coll.

Reorganization and Rehabilitation Laws

Act. No 182/2006 Coll.

For Further Statistics

Czech Statistical Office

Opening Hours

 

• Legal Weekly Duration

40 hours

• Maximum Duration

40 hours

• Night Hours

Not limited if maximum duration is fulfilled.

Working Rest Day

Saturday, Sunday

Paid Annual Vacation

After 3 month of testing period workers have the right for vacation in duration of one-twelfth each worked month. The minimum annual holiday is four weeks (20 working days)

Retirement Age

Men 63 years, Women 59-62 years depending on the number of children. In order to reach retirement age, it is necessary to pay pension insurance (to be employed or to operate one's own business) for at least 25 years.
Since 2008, the retirement age for men has been increasing by two months per year from 62 years. Czech policy stipulates that the retirement age will continue increasing at this rate until it reaches 65 years in 2030.

Child Labour and Minimum Age For Employment

15 years are minimum age for employment of young people, but they may not work overtime and do night shifts.

Informal Labour Market

Informal labor market is more important than EU average, but due to tax reform will probably decrease to average values.

Pay

Minimum Wage

The minimum wage is set CZK 16,200 per month for 2022 (official governmental source).

Average Wage

CZK 37,929 in Q1 2022, according to the Czech Statistical Office.

Other Forms of Pay

• Pay For Overtime

25% over the basic rate

• Pay For Rest Days Worked

10% for overtime work completed on weekends or on days not stipulated in the original employment contract.

• Pay For Night Hours

10% for overtime work completed between 10 pm and 6 am

• Pay For Overtime at Night

25% over the basic rate for overtime work.

Social Security Costs

The Areas Covered

Both companies and employees are required to contribute payments to social security, including to health insurance, pension, unemployment insurance, sickness insurance and other benefits.

Contributions

Contributions Paid By the Employer: Employers contribute 33.8% of the employee's gross salary to the state health and social security funds (9% to the state health insurance funds and 24.8% the state social security funds).
Contributions Paid By the Employee: Health insurance 4.5%, old-age and invalidity pension between 3.5% and 6.5%.

Competent Organization

VZP - Health Insurance Company
VZP for Foreigners - Health Insurance Company

Recruitment

Method of Recruitment

The recruitment process takes place more and more via internet. Selection is made on the basis of a job interview (for SME). But for manufacturing it is better to take a recruiting agency. Also labor office can be used.

Recruitment Agencies

There are only private recruiting agencies. Most important are: Grafton, Robert Half, ManPower, Synergie.

Recruitment Websites

Jobs
Prace
CareerJET.cz

The Contract

Dispute Settlement

Social Partners

Employer Associations

SPCR - Confederation of Industry of the Czech Republic
SPCR - Confederation of Industry of the Czech Republic
AMSP - Association of SMEs Crafts of The Czech Republic

Social Dialogue and Involvement of Social Partners

The Czech Republic operates on the principle of free establishment and competition of unions. Establishment of a union is not mandatory in companies. The minimum number of employees needed to establish a company union is three.
Amongst them, the most powerful is Czech-Moravian Confederation of Trade Unions (so called CMKOS). It is an important social partner in tripartite negotiations in the framework of the Council of Economic and Social Agreement of the Czech Republic. It works in the regions of the Czech Republic through Regional Councils of Trade Unions (RROS) and Regional Offices for Legal Assistance (RPP). There are 33 trade unions in the framework of CMKOS.

Unionisation Rate

11% of all employees.

Labour Unions

Other Unions affiliated to CMKOS

Regulation Bodies

Confederation of Industry of the Czech Republic (SPCR)