Starting a business in
🇨🇿Czech Republic
Checked November 4, 2026 · How we score
Corporate tax
21%
Top income tax
23%
Setup from
$1,200
all-in, first year
Time to form
14 days
can be done remotely
Taxes in Czechia
| Corporate income tax | 21% 21% corporate income tax since 2024 (previously 19%). Pillar Two applies to large groups. Research deduction of 100% available. |
|---|---|
| Personal income tax (top) | 23% 15% on income up to 36x the average monthly wage (about CZK 1.8m); 23% above. Self-employed (OSVČ) can use flat expense deductions (30%–80%) or a lump-sum tax scheme. |
| Tax system | Worldwide income |
| Capital gains tax | 15%15%/23% on gains; securities are exempt after a 3-year holding period (with annual limits), and time-test exemptions apply to property. |
| Dividend withholding (non-residents) | 15% |
| VAT / GST | 21% |
| Social security | Employee 11% (pension 6.5%, health 4.5%), employer 33.8%. Dividend WHT is 15% (35% for non-treaty/blacklisted jurisdictions; 0% for EU parent companies). |
Forming a company in Czechia
| Usual entity | s.r.o. (limited liability company) |
|---|---|
| Minimum capital | None |
| Setup cost (all-in) | $1,200–$3,000 |
| Annual running cost | $2,000–$4,500 |
| Time to incorporate | 14 days |
| Form remotely as a foreigner | Yes |
| Local director required | No |
| Local address required | Yes |
| Owners on public register | Yes |
| Statutory audit for small companies | No |
| Business banking for non-residents | Moderate |
Residency and visas
No digital nomad visa; non-EU founders use a long-term business visa/residence permit based on a trade licence (živnost) or company directorship, which requires a registered address and proof of funds. EU citizens register residence after 3 months.
| Digital nomad visa | No |
|---|---|
| Golden visa | No |
| Ease of residency for founders | 3/5 (1 = easiest) |
Special tax regimes
Lump-sum tax for sole traders
Fixed monthly payment (about CZK 8,000 in 2026) that covers income tax, social and health insurance for small self-employed people.
Flat expense deductions
Self-employed can deduct 40%–80% of revenue as presumed expenses instead of real costs.
Research & development deduction
100%–110% deduction of qualifying R&D costs from the tax base.
Pros and cons
Why founders pick Czechia
- No minimum capital for an s.r.o.
- Stable legal system and EU access
- 15% dividend and 15% personal tax up to a high threshold
- Strong tech and engineering talent pool
Watch out for
- 21% corporate tax is mid-range for the region
- Notarised documents and a Czech registered address are required
- Employer contributions of 33.8% on salaries
- 21% VAT and heavy reporting (VAT control statements)
- No digital nomad visa
Best for: Founders targeting Central Europe · Freelancers using the lump-sum regime · Tech companies with Czech talent
Czechia: common questions
Can a foreigner open an s.r.o. in the Czech Republic?
Yes. A notary creates the deed, and non-residents can sign by power of attorney. You need a Czech registered office address and a trade licence, and registration with the Commercial Register typically takes 1–3 weeks.
What is the corporate tax in Czechia?
21% since 2024. Dividends are subject to a further 15% withholding for individuals and non-EU companies (reduced by treaty, 0% for qualifying EU parents).
Does Czechia have a digital nomad visa?
No dedicated nomad visa exists. Non-EU freelancers use a long-term business visa or residence permit by registering a trade licence (živnostenský list), proving funds and a local address.
What is the Czech lump-sum tax?
A fixed monthly payment (paušálnà daň) of around CZK 8,000 that covers income tax, social security and health insurance for self-employed people with revenue under CZK 2m, with no annual tax return.
How much does it cost to run a Czech s.r.o.?
Roughly USD 2,000–4,500 per year for accounting (CZK 3,000–8,000 per month), registered office and filings, plus payroll costs if you hire staff.
Sources
- Czech Financial Administration
- Business Portal Czech Republic
- PwC Worldwide Tax Summaries – Czech Republic
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Not tax or legal advice. Rates and rules change; we check official sources and update every page, but verify with a licensed adviser in the country before acting. Spotted something out of date? Use the correction form below.