Prague City Council is set to debate measures on Tuesday to help small
businesses impacted by the coronavirus pandemic. These include proposals to
forgive rent in city-owned properties and financial support of up to CZK
Last week Prague councilors decided not to charge tenants interest fees on late payments for the duration of emergency measures to contain the spread of Covid-19. Those include closing restaurants, bistros, cafés and bars, and the restriction of movement.
On Monday, the Czech government decided to extend these measures until at least April 1 and unanimously approved suspending electronic sales records (EET) until three months after the emergency ends. This means taxpayers will not have to record sales.
Nearly 17,000 will cease to exist in the Czech Republic by the end of 2019,
according to the estimates of the Czech Credit Bureau (CRIF), which is the
highest number in the country’s history.
The first three quarters of this year saw nearly 12,000 companies close, which is only 15,000 more than for the whole of 2018.
At the same time, around new 31,000 companies are expected to be registered in the country in 2019, which is the third-highest number since 1989 and only a two-percent drop on the previous year.
The Czech Republic has placed 41st on the World Bank’s Ease of Doing
Business ranking for 2019. New Zealand topped the list, followed by
Singapore and Hong Kong.
A country’s performance is judged on a variety of factors, and a higher ranking indicates better, usually simpler, regulations for businesses and stronger protections of property rights.
The Czech Republic excelled in conditions for foreign trade but did poorly as concerns excessive bureaucracy in starting a business and in gaining a construction permit where it placed 134th and 157th respectively.
The informal chain of small Vietnamese stores makes up the largest retail
chain in the Czech Republic and possibly composes up to a fifth of the
market, according to the head of the Confederation of Trade and Tourism
Tomáš Prouza. Speaking to the Czech News Agency, Mr. Prouza said that a
new law amendment which is currently being prepared could affect these
small-retailer alliances by re-evaluating them as a significant market
According to him, inspectors currently have problems when dealing with the owners of such stores in part because of the murkiness surrounding their company ID. By classifying such retailers as an alliance of traders under the new legislation could help tax them more effectively.
During the first half of 2019, the Czech Republic registered a three year low in the amount of new companies being set up, data from the website Bisnode shows. A record amount of businesses, 7964, was also shut-down during the same measured period. Overall, the number of companies registered in the country grew to just under 450,000.
The Czech Republic’s system of company tax is one of the most complicated in the EU, claims a study made in collaboration by the consultancy BDO and two German universities. The Czech Republic ranked fourth from bottom among EU states and its tax system was considered below average in the world-wide ranking.
Some 18,306 companies were registered in the Czech Republic last year, the
second-highest number in history. At the same time, 13,328 companies ceased
to exist, the greatest number on record.
According to the Czech Credit Bureau (CRIF), at the end of 2018 there were 31,634 companies in total still registered as operational.
CRIF analyst Věra Kameníčková said the number of newly established firms stayed close to historical highs for most of 2018, in line with continued economic growth and prevailing optimism among businesses and consumers.
In annual terms, there were 929 fewer new companies registered than in 2017 while 1,135 more disappeared in 2018 than in the previous year. The net increase thus decreased by 2,064 year-on-year and was the lowest in the last five years.
It is generally still easier in the Czech Republic than elsewhere in the EU to hide crucial parts of corporate structures – including the ultimate beneficial owners of a business – from public scrutiny. While registering a business in a non-transparent tax haven is one way for owners to hide their identities, a growing number are taking a more brazen route: paying so-called “white horses” – often homeless people – to act as frontmen.