How to move your company's registered office from the Czech Republic to a country outside the EU (and vice versa)

Are you doing business in the Czech market, but would you like to relocate your company to Malta, Switzerland, USA or vice versa? We will introduce you to the amendment to the Act on Company Conversions, which newly facilitates the conditions for changing the seat of a company outside the EU.

What does the amendment to the Company Transfers Act bring?

From July 2024, the amendment introduces easier changes of tax domicile - or rather, it expands the possibilities of moving the company's registered office to and from abroad. Previously, you could only change your domicile between EU countries, but now it is possible to relocate a company from the Czech Republic to countries outside the EU and EEA (so-called third countries) and vice versa.

In addition, the amendment of the law also brought a new way of dividing a company by spinning off. Both innovations are intended to facilitate cross-border business and asset management for company owners. The part of the company being divided can now be transferred directly abroad without unnecessary intermediate steps.

Relocating a company from a third country to the Czech Republic

If the legislation of a third country allows it and the foreign company is not in liquidation, you can relocate its registered office from outside the EU to the Czech Republic.

The relocation will not result in the dissolution of the current company or the creation of a new one - it will only change the legal form of the foreign company to the desired Czech entity.

Once the company is removed from the commercial register of the third country, its new registered office in the Czech Republic will take effect. Therefore, do not forget to register the company for corporate income tax or VAT.

If you would also transfer depreciated tangible assets from abroad to the Czech Republic, the accounting is based on the converted foreign price and the rules for non-cash contributions from abroad (Section 32c of the Income Tax Act).

Relocating a company from the Czech Republic to a non-EU country

When relocating a company from the Czech Republic to a third country, similar conditions apply as for relocation within the EU or EEA, namely:

• the legislation of the third country must allow the transfer of companies;
• the Czech entity will not be dissolved, but only the legal form will be changed according to the destination country.

The new registered office and legal form of the company will be effective from the date of registration in the foreign register (commercial, economic entities, etc.)

After relocating abroad, do not forget to file an income tax return in the Czech Republic. The end of the tax period will be determined by whether you continue to do business in the Czech Republic or not:

• If you stop doing business in the Czech Republic after moving abroad, you will file a tax return for the period preceding the date you changed your tax residence from the Czech Republic to abroad.
• If you continue to do business in the Czech Republic through a permanent establishment, you will still have the normal obligation to file a tax return and the end of the tax period will be the end of the current or business year.

Entrust your company conversion to experienced

When converting companies, it's important to master not only the legal aspects, but also the accounting and tax aspects. Make the whole process easier for yourself by entrusting it to the experts. Contact us using the form below and we will propose a solution.

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