A holding company in Czech Republic is a legal entity which is set up with the purpose of owning assets in other companies. It represents a parent company which can control the management and the investment policies of other smaller companies. It is important to know that the activities of a holding company in Czech Republic are limited, as it can’t perform commercial activities. Our team of lawyers in Czech Republic can offer legal assistance on the legislation regulating the incorporation of a holding company.
Holding companies regime in Czech Republic
A holding company in Czech Republic can be set up under various legal entities available under the Czech legislation, but many investors prefer to incorporate it as a limited liability company. This is also the most common type of business form registered in this country.
It is important to know that the Czech authorities do not impose restrictions of the business activities carried out in various economic fields by a holding company.
Companies registered under this regime are not subjected to a special taxation system, as they are taxed following the regulations applicable for commercial companies.
They will need to register for taxation purposes, including value added tax (VAT).
Those who are interested in opening a holding company in Czech Republic can benefit from the provisions of the double taxation treaties signed by the local authorities with other countries. However, the regulation is applicable only in the situation in which the investors are national citizens of one of these countries. At the moment, Czech Republic signed 83 double taxation agreements and our team of attorneys in Czech Republic can provide in-depth information on such regulations.
Taxation of a holding company in Czech Republic
A company in Czech Republic is taxed for its profits with a corporate tax rate established at 19%.
The company is also imposed with the withholding tax on dividends paid to non-residents, which are imposed in accordance with the treaties signed between the states.
In the case of a non-treaty country, the withholding tax is imposed at a rate of 35%, while in the situation in which there is an applicable treaty, the rate is much lower, between 0% and 15%.
Businessmen interested in finding out more details on the regulations related to a holding company can address to our law firm in Czech Republic.