Establish a Czech Foundation

Would you like to open a foundation in the Czech Republic? This article explains the main routes & conditions to set up this entity. You may explore the following lines and then access our online services to get help in this matter.

 Who can establish foundations in the Czech Republic?

• entities can also create foundations in the Czech Republic.
• any foreign or local individual,

 Below is an infographic with details on this topic:

What types of foundations are available in the Czech Republic?

Under the Civil Code (Act No. 89/2012 Coll.), which replaced the Foundations Act of 1997 in 2014, 3 types of organisations can operate under a foundation structure:

• the foundation – a type of asset-based entity which has the purpose of serving a certain public benefit; the endowment for this entity is established at a minimum value of CZK 500,000;
• the charitable fund – a type of property-based organisation established to support public benefits;
• the institute (ústav) – a legal entity established to provide public-benefit services (public benefit companies can no longer be founded since 2014; existing ones may continue).

IMPORTANT: Foundations in the Czech Republic cannot be established for political movements or be involved in commercial activities for generating profit.

 Here is a video presentation about Czech foundations:

What are the key steps to open a foundation in the Czech Republic?

• Purpose – Must be established at the time a decision to open a foundation is made,
• Name – Must be verified and reserved first,
• Documents – must draft the Foundation Deed at the notary,
• Staff – Must appoint a foundation administrator to deal with the registration formalities, and also the administrative board,
• Minimum capital – Must deposit CZK 500,000 in a bank account,
• Incorporation – The registration of a foundation in the Czech Republic is done in the Foundation Register (nadační rejstřík) kept by the competent regional court,
• Post-incorporation – Must register with the local Tax Office.

What does the foundation deed contain?

• Name and residency of founders,
• Foundation’s purposes,
• Contribution/endowment capital,
• Administrative board,
• Foundation’s rules, etc.

IMPORTANT:

• a foundation in the Czech Republic needs a supervisory board or an inspector (revizor), and its financial statements must be audited when statutory thresholds are met,
• the governing body is the administrative board.

Can Czech foundations receive grants and/or donations?

Yes. These can be used in agreement with the foundation’s purposes.

Can a foundation in the Czech Republic develop business activities?

Only if the profits generated are directed to philanthropic causes or support the purposes of the foundation in question.

Are there any options instead of a foundation established with a specific amount of capital?

Yes, the endowment fund, which is a flexible structure and for which there is no need for a specific capital.

Can foundations be established to protect family assets?

Absolutely. Our Czech agents can assist in this endeavor.

Is accounting needed for a Czech foundation?

Yes. You may explore our accounting services here.

What is the taxation of foundations in czech republic?

• 21% CIT on commercial income generated,
• no taxation for foundations without income.

Would you like to know more about Czech foundations and the stages of incorporation? Interested in opening a company in the Czech Republic? You may contact our Czech specialists and benefit from our tailored services.