Legal environment

What do I need to know about the Czech legal system?

The Czech Republic is an investor-friendly western democracy with a stable and modern legal environment. Czech laws are compatible with EU laws.

Is the Czech legal system similar to developed European legal systems?

Yes. The Czech legal system is based on the civil law system, in particular the Germanic branch of civil law. The legal system is based on written sources of law, namely acts (adopted by Parliament), delegated legislation (adopted by the government or ministries), ratified international treaties and EU law.

Are investments in the Czech Republic protected by any investment protection treaties?

Yes. The Czech Republic has signed 94 bilateral investment treaties.

Are intellectual property rights protected in the Czech Republic?

Yes. The Czech Republic is a signatory to the Bern, Paris and Universal Copyright Conventions.

Does the court system work well and are investors’ rights enforceable in the courts?

Yes. The Czech courts work well and investors’ rights are enforceable in the courts.

Are court fees reasonable?

Yes. Where a monetary claim is brought to court, the court fee comprises 5% of the claim amounting to CZK 40 million or for higher claims, the court fees are CZK 2 million plus 1% of the claim over CZK 40 million, but only up to CZK 250 million. The maximum court fee is CZK 4.1 million (EUR 150,000) for claims amounting to CZK 250 million (approx. EUR 9.1 million) and higher.

Is alternative dispute resolution available in the Czech Republic?

Yes. The most frequent dispute resolution mechanism for parties seeking to avoid litigation in court is arbitration.

Can I enforce foreign judgments issued by a court based in an EU member state in the Czech Republic?

Yes. Foreign judgements issued by EU courts are enforceable subject to the Brussels Regulation and the Hague Convention on Choice of Court Agreements. Can I enforce foreign arbitral awards in the Czech Republic? Yes. Foreign arbitral awards are enforceable subject to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards signed in New York on 10 June 1958.

Are the common corporate structures available in the Czech Republic?

Yes. Business in the Czech Republic is conducted by a variety of different entities which are also common in the EU. These include the following types of companies: limited liability companies, joint-stock companies, general

commercial partnerships and limited partnerships. Foreign entities can register to conduct business in the Czech Republic via a branch or through participation in a Czech entity under the same conditions as Czech entities. In addition, the following European forms of legal entities are allowed to operate in the Czech Republic: (i) European Economic Interest Grouping, (ii) European Company (Societas Europea) and (iii) European Cooperative Society.

Is the investment risk small in the Czech Republic?

Yes. The Czech Republic’s sovereign debt has been given investment grade ratings by the rating agencies Moody’s (Aa3), Standard & Poor’s (foreign currency: AA-; local currency: AA) and Fitch (AA-).

The Czech Republic is a member of