Would you like to open a foundation in the Czech Republic? This article presents information about the key requirements for this entity. Please explore the main requirements and also reach out to our Czech lawyers for extra support and guidance.
| Quick Facts | |
|---|---|
| Applicable laws |
– the Civil Code, – the Law on Public Registers, – the Public Benefit Corporations Act |
| Establishment purposes | For public and private benefits |
| Types of foundations |
– associations, – foundations, – institutes, – endowment funds, – social cooperatives |
| Creation requirements for foundations | At least one member can create a foundation in the Czech Republic. |
| Mandatory registration (YES/NO) | Yes, foundations must be registered. |
| Registration authority | The Czech Commercial Register |
| Creation document | The foundation document |
| Documents required to create a foundation |
– information about the founders, – the name of the foundation, – the legal address, – the purpose of the foundation, – the rights and duties of members, – information about the management of the foundation |
| Local address required (YES/NO) | Yes |
| Share capital requirement (YES/NO) | CZK 500,000 (approx. EUR 20,000) |
| Taxation of Czech foundations | Foundations are exempt from taxes on non-commercial operations. |
| Accounting requirements (if any) | Foundations must keep accounting records and draw up annual financial statements. |
| Possibility to conduct economic activities through a Czech foundation (YES/NO) | Yes |
| Advantages |
– foundations can be used for various charitable purposes, – they can also be used for estate planning purposes, – they benefit from various tax exemptions. |
| Support in setting up a foundation in the Czech Republic (YES/NO) | Yes, our Czech law firm can assist with the setup of a foundation. |
Table of Contents
How are foundations known in the Czech Republic?
- Non-profit organizations,
- Nadace in the Czech language.
NOTE: Foundations in the Czech Republic are legal entities that are used for a specific purpose.
What are the key characteristics of a foundation in the Czech Republic?
- a Czech foundation has legal personality,
- it cannot be used for personal profit,
- a Czech foundation has its own rules and status,
- it must be founded by at least one individual.
What types of foundations are available in the Czech Republic?
- Non-profit organization/foundation – for charitable projects in the long term.
- Endowment fund – for charitable projects in the short term.
- Institute – for social services.
Below is an infographic on Czech foundations:
What is the minimum endowment required?
CZK 500,000.
What is the key document for establishing a foundation in the Czech Republic?
The founding document, drawn up as a notarial deed.
What are the key steps in opening a Czech foundation?
- establish the purpose of the foundation.
- draft the documents and notarize them,
- appoint an administrator and the board of directors,
- deposit the required capital to a temporary Czech bank account,
- get the registration certificate from the Czech Public Registry.
IMPORTANT: The key purpose of a Czech foundation will be for the public benefit.
Should a Czech foundation have a registered office?
Yes, it is mandatory.
Is a supervisory board needed for a Czech foundation?
Yes, alongside a foundation auditor.
Can foreigners establish foundations in the Czech Republic?
Yes. Moreover, founders can act anonymously through the organization if they want to.
Can a Czech foundation carry out other activities too?
Yes, but under specific conditions and with limitations.
Does a Czech foundation have an expiry date?
It can be established from the beginning. Once serving its purpose, the charity/foundation can be closed.
Can a Czech foundation receive non-cash contributions?
Yes.
Can a Czech foundation have and manage its own assets?
Absolutely.
Do I need to register a Czech foundation for tax purposes?
Yes, with the Czech Financial Authority.
What is the taxation of a Czech foundation?
There is no taxation imposed on foundations/charities operating under the “publicly beneficial taxpayer” status,
21% CIT is imposed on foundations that also develop activities for generating profits. The same tax is imposed on family foundations.
What is the time frame to open a Czech foundation?
About 8-12 weeks.
Ready to explore more about the conditions of opening a foundation in the Czech Republic? Please feel free to contact our Czech law firm and ask for advice.