The procedure for establishing a Czech limited liability company has become easier after an amendment to the Business Corporations Act since 1 January 2021. If the registered capital does not exceed CZK 20,000, it is not required to open a bank account for its payment.
The amendment will help those for whom a company with a low initial registered capital is sufficient and who will primarily use other sources to pay for the formation and operation of the company. If the total contributions to the registered capital do not exceed CZK 20,000 (apoprox. 750 €), they may be paid up in cash, i.e. not only to the bank account set up for this purpose as was the case in the past.
To open a bank account, the representatives must complete AML, KYC and other procedures, which may delay and complicate the establishment of a company and start of business, respectivelly, especially if founded by foreign persons (foreign legal entities, foreigners). Therefore, the process of establishing a limited liability company in Czechia with a registered capital not exceeding CZK 20,000 can be expected to be much easier and faster thanks to the amendment. A company can now be even established in one day.