Business Types in Czech Republic.
There are several business types to choose from, the most common ones are listed here:
- Trade Licence (= živnostenský list , "zivno") - freelancer, enterpreneur.
- limited liability company (LLC, LTD) (= s.r.o.) - typical for: entrepreneurs, (foreign) mothercompany,
- branch office - typical for: foreign mothercompany,
- joint stock company (= a.s.) - typical for: holding with multiple s.r.o's, public shares,
- partnership - not very common for foreigners,
- co-operation ("drustvo") - ("used to be") typical for buildings with multiple owners
Private Individuals (employee, živnostenský list, s.r.o.)
For 95% of the foreigners that want to make a living in Czech Republic there are 3 possibilities:being employee, being freelancer (using a živnostenský list) or having an s.r.o.
If an employer offers a position as employee, you may also consider working freelance.
In case you wish to be a 'free man / woman', the choice is between freelance and s.r.o.
Companies (branchoffice, s.r.o, a.s.)
For (foreign) companies wishing to open a branch or daughter here there are 2 possibilities:a branch office or an s.r.o.
A branchoffice is almost the same as an s.r.o., minus the liability (it lies with the parent).
The founding process is about the same, especially if the shares of the s.r.o. are owned for 100% by the parent, so Alexio recommends starting an s.r.o.: Taxwise there are more possibilities and should take things a turn for the worse, because of the s.r.o.'s own liability, it doesn't affect the parent (that much).
An a.s. requires a starting capital of minimum 2.000.000 CZK, a board of directors, a board of supervisors and audits. These are usually enough reasons ordinary s.r.o. is chosen.
For normal business purposes, there is no good reason to open an a.s., unless the intention is to give out public shares (rare) or Czech legislation requires an a.s. company form because of the company activity.