Property acquisition tools,
shelf companies (SPVs), EU cards

The rules for buying and selling property in the country are byzantine, especially for non-EU citizens. Most non-Czechs are unable to directly own property. Thus the most common method for obtaining ownership by non-residents is through the purchase of a special purpose vehicle (SPV), specifically a limited liability company (known as a "společnost s ručením omezením," or s.r.o.). To buy property, it is enough to form a real estate s.r.o., an entity without any other business activity than the purchase, ownership, rent and sale of property. The investor forms or purchases the firm and becomes the only shareholder in it. This company in turn owns the property. Once established, the s.r.o. can also be used for financing arrangements in relation to the property.

Effective 1 May, 2004 (when the Czech Republic entered the European Union), EU citizens are now, under certain circumstances, able to buy real estate without an s.r.o. An EU citizen is entitled to apply for a temporary residency (EU card), which enables the purchase of property in the Czech Republic under his or her own name. Companies.cz offers both off-the-shelf SPV limited liability companies and EU cards. Our price for a ready made shelf company for the purpose of purchasing real estate is CZK 34,000 (excluding VAT). This price includes all fees. SPV companies are transferred to the client´s ownership and can begin transacting business on the very day that they are purchased.

As for EU cards - the document will be available approximately 60 days after the application is filed. We provide this service, inclusive of all fees but not including VAT, for CZK 19,500.

Before deciding which of our services is appropriate for you, please consider the pros and cons of SPVs and EU cards.

SPVs (shelf companies)

• Can transact business (i.e., property buying) and sign company documents immediately

Disadvantages
• More expensive
• Annual accounting and tax reporting required

EU card

Advantages
• Ability to purchase property in your own name
• Less expensive

Disadvantages
• Only for EU citizens

Companies.cz is the Czech Republic's first true online company formations service. We specialise in all aspects of company formation for a variety of purposes, particularly the purchase of real estate. Contact us today to find out what we can do for you.