In 2025,
the Czech Republic once again confirms its status as one of the most attractive jurisdictions for international investors: according to the European Commission, foreign direct investment in the country increased by 18% over the past year, and the average time to obtain a permit for a major investment project has been reduced to 60 days thanks to the introduction of investment passports. But behind these figures lies a much deeper question: why is the Czech Republic becoming the strategic choice for those who build a business aimed at long-term tax efficiency and transparency?
Many entrepreneurs face a paradox: on the one hand, they need access to EU markets and a stable legal environment, and on the other, they are looking for ways to minimize their tax burden and obtain guarantees for investment protection. In a context of constant changes to tax legislation and tightening disclosure requirements,
the choice of jurisdiction becomes critically important.
In this article I will describe in detail how the COREDO team helps investors not only to register a company in the Czech Republic, but also to build an optimal tax and corporate structure, using all available benefits, subsidies and capital protection tools. If you are looking not just for an overview but for a practical guide to effective investing in the Czech Republic – I recommend reading to the end: you will get answers to key questions and learn about strategies that really work.
Main taxes for investment companies in the Czech Republic
In COREDO’s practice we regularly encounter questions about the tax structure in the Czech Republic. Understanding tax obligations is the foundation for making strategic decisions.
Corporate tax rates and features for 2025
In 2025, the corporate tax in the Czech Republic remains at 21%. This rate applies to all resident companies, as well as to foreign companies conducting activities through a permanent establishment. It is important to note that the tax base is formed on the basis of worldwide income if a company is recognized as a tax resident of the Czech Republic. For large companies with turnover exceeding €750 million, a minimum tax of 15% is being introduced, which reflects European trends towards tightening tax discipline and combating aggressive tax planning.
COREDO’s experience shows: by properly structuring a business and using international agreements on the avoidance of double taxation, you can significantly reduce the effective tax burden, particularly for holding and investment structures.
Value Added Tax (VAT) for investors
VAT in the Czech Republic is set at 21%, with reduced rates of 10% and 15% for certain categories of socially significant goods and services. Accelerated VAT refund procedures are provided for export-oriented companies, which is especially relevant for technology projects and startups operating in international markets.
A solution developed by COREDO for a number of clients allowed them to optimize their supply structure and achieve regular VAT refunds within 30–45 days, which significantly improved cash flow and increased the investment attractiveness of the business.
Tax on dividends and capital gains
Dividends paid by Czech companies are subject to a withholding tax (Srážková daň) at a rate of 15%. However, for EU parent companies holding at least 10% of the shares for 12 months, a participation exemption applies, allowing dividends to be completely exempt from taxation. Capital gains are taxed at the corporate tax rate, but exemptions are possible under certain conditions, for example, on the sale of shares that have been held for more than three years.
COREDO’s practice confirms: proper structuring of share ownership and timely obtaining of parent company status can significantly minimize taxes on dividends and capital gains, which is especially important for investment funds and holdings.
Tax incentives for foreign investors
Czech legislation offers a wide range of tax benefits and incentives aimed at attracting long-term investments, especially in innovative and technological projects.
Profit tax exemption for up to 10 years
For new investments in priority sectors (technology, scientific research, manufacturing), a profit tax exemption regime of up to 10 years is provided. This allows companies to reinvest profits in
business development without diverting resources to tax payments.
The solutions implemented by the COREDO team have already allowed several clients to obtain tax holidays for the entire investment cycle, which has significantly increased their competitiveness in the market.
Subsidies for technological equipment and scientific research
The state subsidizes up to 50% of the costs of acquiring technological equipment and also provides tax relief for companies investing in scientific research and innovation. To obtain such subsidies, preparation of a comprehensive business plan and undergoing an audit procedure are required.
Our experience at COREDO has shown: with proper document preparation and process support, the probability of subsidy approval exceeds 80%.
Preferential loans from the state fund: grants for future investments
Investors can use preferential loans for business development through the state fund Dotace pro investice do budoucna.
The amount and lending terms depend on the sector and investment volume, but in some cases the loan rate can be significantly below market. The COREDO team accompanied clients at all stages of obtaining such loans, from preparing the application to monitoring the targeted use of funds.
Taxation of income from investments
For effective tax planning, it is important to consider the specifics of taxation of different investment instruments.
Taxation of income from the sale of securities and unit certificates
Income from the sale of securities that have been held for more than three years is exempt from profit tax. Separate rules apply to unit certificates: income from them is taxed at a rate of 15%
, However, when reinvesting funds into Czech assets, tax deductions may be available. Solutions implemented by COREDO have allowed clients to structure transactions so as to maximize tax exemptions and minimize liabilities upon exit from investments.
Tax consequences of holding shares and stakes in companies
Holding stakes in Czech companies through a parent company structure (with a stake of at least 10% and a holding period of at least 12 months) allows taking advantage of the participation exemption. This allows not paying tax on dividends and capital gains when the stakes are later sold. This approach is widely used in international practice and has proven effective in COREDO’s cases.
Changes in Czech Tax Legislation 2025
The 2025 developments require special attention in strategic investment planning.
Introduction of a minimum tax for large companies
From 2025, a minimum tax of 15% is introduced for companies with revenues exceeding EUR 750 million. This aligns with global trends and is aimed at combating aggressive tax planning.
For investment structures this means the need for a thorough assessment of the tax burden and a review of corporate strategies. COREDO’s experience shows that with the right choice of holding jurisdiction and the use of international agreements, it is possible to maintain a competitive tax rate even under the new rules.
Increase in social and health insurance contributions
In 2025 mandatory social and health insurance contributions increase, affecting overall business profitability.
For entrepreneurs using the simplified tax system, it is important to take the new contribution ranges into account and plan the budget considering these changes.
Updates to the simplified tax system
New tax brackets and fixed rates for small entrepreneurs are being introduced, which simplifies administration but requires regular monitoring of changes. COREDO’s solutions allow clients to adapt promptly to new requirements and avoid penalties for untimely fulfillment of tax obligations.
Registration of an investment company in the Czech Republic
Company registration in the Czech Republic: is a strictly regulated process that requires attention to detail and compliance with all formal requirements.
Registration stages and required documents
The registration process includes several key stages:
- Preparation of founding documents and selection of a unique company name.
- Determination of the structure of shareholders and directors.
- Submission of documents to the Commercial Register and tax authorities.
- obtaining a license to carry out investment activities (if necessary).
The COREDO team supports clients at every stage, ensuring the correct preparation of documents and minimizing registration times.
Disclosure requirements for foreign investors
Since 2025, requirements for disclosure of information on beneficial owners and financial reporting have been tightened.
Foreign investors are required to provide an expanded set of documents confirming the source of funds and ownership structure. Our experience at COREDO shows: transparency and timely disclosure of information significantly reduce the risks of account freezes and claims from regulators.
Tax risk management and compliance
In today’s environment, effective management of tax risks has become an integral part of an investment strategy.
Data protection and GDPR compliance
Compliance with GDPR standards and
personal data protection is a mandatory requirement for all companies working with EU residents.
COREDO’s solutions provide for the implementation of comprehensive data protection policies and regular audits of procedures, which minimizes the risk of fines and reputational damage.
Control of foreign tax rates and avoidance of double taxation
The Czech Republic has concluded more than 90 double taxation agreements, allowing taxes already paid abroad to be taken into account when calculating liabilities in the Czech Republic.
For investors, this is a key tool for tax optimization. COREDO’s practice shows that the proper application of international agreements can significantly reduce the overall tax burden and avoid double taxation on cross-border investments.
Practical steps for investors to reduce taxes
Moving from theory to practice, I will outline the key tools and solutions that enable investors to use the tax advantages of the Czech Republic as effectively as possible.
Using tax reliefs and incentives
Optimizing the tax burden begins with an analysis of all available reliefs: tax holidays, subsidies, accelerated VAT refunds, reduced rates for innovative projects.
The COREDO team has implemented projects where the overall tax burden was reduced by more than 30% through the effective use of these tools.
Application of the participation exemption regime
Structuring ownership through a parent company with a share of at least 10% and a holding period of at least 12 months allows dividends and capital gains to be fully exempt from taxation.
This approach is particularly effective for holding structures and investment funds operating with portfolios of Czech assets.
Accounting for foreign taxes and double taxation treaties
When planning international investments, it is important to take into account not only Czech but also foreign tax obligations. COREDO’s solutions provide for a comprehensive analysis of tax treaties and optimization of ownership structures to minimize the overall tax base.
Key takeaways for investors
- The Czech Republic remains one of the most transparent and stable jurisdictions for investment business in the EU.
- The corporate tax (21%) and the minimum tax regime (15% for large companies) require strategic planning, but with proper structuring and the use of incentives the effective tax burden can be significantly reduced.
- Using investment passports, tax holidays, subsidies, and international agreements enables establishing an effective investment and tax strategy.
- COREDO’s practice confirms: investment success in the Czech Republic depends on a comprehensive approach, from proper company registration to continuous monitoring of legislative changes and managing tax risks.
Comparison of taxes and incentives for investment companies in the Czech Republic, 2025
| Tax/Incentive |
Rate/Conditions |
Notes |
| Corporate tax |
21% |
For all companies |
| VAT |
21% (reduced rates 10-15%) |
For socially significant goods |
| Dividend tax |
15% |
Withheld at source |
| Minimum tax |
15% |
For companies with turnover exceeding EUR 750 million |
| Corporate income tax exemption |
Up to 10 years |
For new investments |
| Equipment subsidies |
Up to 50% |
For technological equipment |
| Preferential loans |
According to the fund’s terms |
Grants for investments in the future |
Conclusion
Investing in the Czech Republic: it is not just access to the EU market, but also an opportunity to build a business with an optimal tax structure, transparent rules of the game and access to government incentives. company registration in the Czech Republic and sound tax planning allow investors to implement long-term strategies, minimize risks and increase the profitability of projects. COREDO’s experience proves: success in the Czech Republic is achieved thanks to a comprehensive approach, expert support and continuous monitoring of changes in legislation.
