Doing Business in the Czech republic

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Are you going to grow to the Czech Republic? This guide may help you overcome difficulties when approaching Czech market and understand Czech business environment. You may also ask us for advice - www.rsm.cz

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Doing Business in the Czech republic

  1. 1. Doing Business in the Czech Republic
  2. 2. RSM International is one of the largest networks of independent audit and consulting firms in the world. RSM International is represented in 111 countries and brings together the talents of 35,000 individuals. RSM member firms are driven by a common vision of providing high quality professional services to ambitious and growing organisations. In a world of different cultures, it’s good to have advisors who are consistent everywhere.
  3. 3. Monika Marečková Managing Partner monika.mareckova@rsm.cz DOING BUSINESS IN THE CZECH REPUBLIC | 3 ­­­­­Foreword Welcome to the Czech Republic. I believe this publication will guide you through the world of Czech business and, hopefully, you will decide to do business here. If you have already made the decision, you will be given a warm reception in a country with a rich history and good conditions for both doing business and living. Our country offers a stable economic and political situation and a strategic location in the heart of Europe. The Czech Republic is a member of the EU, offers skilled and educated workers, attractive tax legislation and a number of incentives for foreign investors. The following chapters will answer certain key questions that may arise and help you understand the characteristics and workings of this market. As legislation and business practices are subject to change and reinterpretations, it is sensible to seek local advice from appropriately qualified professional sources to deal with specific matters. This RSM Doing Business In guide offers access to an in-depth knowledge and understanding of local business in the Czech Republic in customs, tax and regulatory matters. Our aim is to attract companies to do business in the Czech Republic and to make it as easy and reliable as possible. We provide our clients with active and quality support in the fields of mergers & acquisitions, corporate finance, valuation, tax, trust services, audit, accounting, and payroll. The material included in this guide was compiled on the basis of data and information available at July 2015.
  4. 4. The Prague Astronomical Clock (the Prague Orloj), installed in 1410 Previous image - Castle Konopiště
  5. 5. Contents 1 About RSM International 6 2 About RSM TACOMA 7 What defines us? 7 Our clients 7 3 General Information of doing business in the Czech Republic 9 Basic facts 9 Background & history 9 Climate 10 Constitutional Institutions 11 Economy 13 Economic Freedom Index 15 Czech Republic’s ranking in ‘Doing Business 2015’ 18 4 Taxation 24 4.1. Corporate income tax 4.2. Withholding tax 4.3. Payroll taxation 4.4. VAT 5 Labour Law in Czech Republic 28 Employment contract 28 Working hours 29 Holidays & absences 29 6 Accounting 30 7 Intellectual Property 33 Industry property rights 33 Copyright 34 Intellectual protection bodies 35 Protecting intellectual rights abroad 35 Combating counterfeiting & piracy 35 8 Contact details 36
  6. 6. Amphawa6 | DOING BUSINESS IN THE CZECH REPUBLIC 1 About RSM International RSM International is a worldwide network of independent audit, tax and advisory firms. Member firms of RSM International are separate and independent legal entities. RSM International does not itself provide accounting or consultancy services. All such services are provided by affiliate members practicing on their own account. RSM International is represented by affiliate independent members in 111 countries and brings together the talents of over 35,000 individuals in over 700 offices worldwide. Thenetwork’stotalfeeincomeofUSD4.2bnplacesitamongstthetopseveninternational accounting organizations worldwide. Affiliate member firms are driven by a common vision of providing high quality professional services, both in their domestic markets and in serving the international professional service needs of their client base. RSM International is a member of the Forum of Firms and of EGIAN (The European Group of International Accounting Networks and Associations). The objective of the Forum of Firms is to promote consistent and high quality standards of financial and auditing practices worldwide, while EGIAN provides a forum for the members to develop common positions on specific technical and legislative issues and to debate these issues with key professional stakeholders and regulators. Amphawa floating market, Bangkok
  7. 7. DOING BUSINESS IN THE CZECH REPUBLIC | 7 2 About RSM TACOMA What defines us? WE UNDERSTAND YOUR BUSINESS RSM TACOMA is a leading advisory firm focusing mainly on project and transaction services, acquisitions, mergers and restructuring. In addition, we specialize in: • Corporate Finance • Valuation • Tax • Trust Services • Consulting • Accounting and Payroll • Family Office RSM TACOMA understands its clients and actively provides them with high quality services. Quality is the attitude for RSM TACOMA. RSM TACOMA is the logical choice for successful and expanding businesses. RSM TACOMA is an active member of one of the biggest consultancy groups in the world – RSM International. Our clients Large and medium-sized companies. Leading international and Czech banks, insurers, investment and financial companies, funds, chambers of industry and commerce, service providers, building contractors and developers, Czech ministries and other administrative authorities, regions and chartered towns, and international investors entering the Czech market. • 18 Czech Top 100 companies. • 6 Fortune 500 companies.
  8. 8. 8 | DOING BUSINESS IN THE CZECH REPUBLIC Lake in Rock City, National Park of Adrspachĉ č
  9. 9. DOING BUSINESS IN THE CZECH REPUBLIC | 9 3 General information of doing ­ business in the Czech Republic Basic facts The Czech Republic is a landlocked country in Central Europe. The country is bordered by Poland to the northeast, Slovakia to the east, Austria to the south, and Germany to the west and northwest. The Czech Republic is a pluralist multi-party parliamentary representative democracy. The Parliament has two chambers: the Chamber of Deputies and the Senate. It is a member of the European Union, NATO, the OECD, the OSCE, the Council of Europe and the Visegrád Group. The Czech Republic has a land area of about 80,000 square kilometers. The population of the Czech Republic is 10.6 million inhabitants with GDP $198 billion, $25.530 per capita at purchasing power parity. Unemployment is currently stabilized around 6 percent. The inflation rate is 0.3 percent. Foreign direct investment inflow is calculated to be $4.9 billion. The national language is Czech. Background and history The Czech state, known as Bohemia and later as the Bohemian Crown, was formed in the late 9th century. The country reached its greatest territorial extent during the 13th and 14th century, under the rule of the Přemyslid and Luxembourg dynasties. Following the Battle of Mohács in 1526, the Kingdom of Bohemia was integrated into the Habsburg monarchy as one of its three principal parts alongside Austria and Hungary. Bohemia later became the industrial powerhouse of the monarchy and the core of the Republic of Czechoslovakia which was formed in 1918, following the collapse of the Austro-Hungarian Empire after World War I. After the Munich Agreement (signed by Nazi Germany, France, Britain and Italy), Polish annexation of Zaolzie and German occupation of Czechoslovakia and the consequent disillusion with the Western response and gratitude for the liberation of the major portion of Czechoslovakia by the Red Army, the Communist Party of Czechoslovakia won plurality (38%) in the 1946 elections. After World War II, the political system in Czechoslovakia was greatly affected by the introduction of a Soviet-style Communist regime, as it was in the other countries of Central and Eastern Europe. The system of power was distorted. In effect this imbalance meant that the three branches of power necessary for democratic development - executive, legislative and judicial - were substituted by a unified Communist power. Its power was based on the constitution and for forty years it ruled all layers of social and political life throughout the country with the help of oppressive institutions.
  10. 10. 10 | DOING BUSINESS IN THE CZECH REPUBLIC In a 1948 coup d’état, Czechoslovakia became a communist-ruled state. In 1968, the increasing dissatisfaction culminated in attempts to reform the communist regime. The events, known as the Prague Spring of 1968, ended with an invasion by the armies of the Warsaw Pact countries (with the exception Romania and Albania); the troops remained in the country until the 1989 Velvet Revolution, when the communist regime collapsed. The Velvet Revolution of 1989 peacefully overthrew a Communist dictatorship and led to the election of dissident playwright Vaclav Havel as president of a democratic Czechoslovakia. Wide diversity of political parties was well-established even before the break-up of Czechoslovakia on 31 December, 1992. The constitution of the Czech Republic, which became valid on the day of the birth of the new state, explicitly defined civil rights, the relationship between the executive and legislative branches of power, and the independence of the judiciary. The Czech Republic separated from Slovakia in the “velvet divorce”, becoming an independent nation in 1993 and joining the European Union in 2004. In the early legislative elections held in 2013 the two most successful parties were the leftish Czech Social Democratic Party and the new party ANO 2011. Since then governs coalition under Prime Minister Bohuslav Sobotka. Historically, the Czech Republic has been among the world’s most industrialized states, and its economy was significantly affected by the 2009 recession, with declines in both industrial production and exports within the European Union. The Czech Republic made economic reforms such as fast privatizations. Annual gross domestic product (GDP) growth stood at around 6% until the outbreak of the recent global economic crisis, nowadays it fluctuates around 2.5%. The country is the first former member of the Comecon to achieve the status of a developed country according to the World Bank. In addition, the Czech Republic has the highest human development in Central and Eastern Europe, ranking as a “Very High Human Development” nation. It is also ranked as the most democratic and healthy (by infant mortality) country in the region and as the eleventh most peaceful country in Europe. Climate The Czech Republic has a temperate continental climate, with relatively hot summers and cold, cloudy and snowy winters. Most rain falls during the summer. The temperature difference between summer and winter is relatively high, due to the landlocked geographical position.
  11. 11. DOING BUSINESS IN THE CZECH REPUBLIC | 11 Constitutional Institutions The President Until 2012, the office of president was filled following an indirect election by the Parliament of the Czech Republic. In February 2012, a change to a direct election was passed by the Senate, and after the related implementation law also was passed by both chambers of Parliament, it was enacted by presidential assent on 1 August 2012; meaning that it legally entered into force on 1 October 2012. The first president elected in the direct election was Miloš Zeman in 2013. The Czech president has a considerable role in political affairs, because many powers can only be exercised with the signatures of both the President and the Prime Minister. However, presidential power is limited; the most important is the right to veto any bill which has already been passed by Parliament, with the exception of constitutional bills. This power is void in times of constitutional or other political crises. The President is the Supreme Commander of the Armed Forces. Parliament Parliament consists of two chambers - the Chamber of Deputies and the Senate. It passes all bills valid in the territory of the Czech Republic and expresses approval of important international treaties, such as those concerning human rights and fundamental freedoms, political treaties, and general economic treaties. It decides the most important acts of the state, such as declaring war or approving the deployment of foreign armies on Czech soil. Chamber of Deputies The Chamber of Deputies is made up of 200 deputies who are elected for a term of four years. The President can dissolve the Chamber of Deputies in cases outlined in the constitution. Political lobbies, ongoing parliamentary commissions and committees operate in the historical building which houses the Chamber. Senate The Senate is made up of 81 senators elected a six-year term. Every two years one- third of the Senate’s seats come up for re-election. The Senate cannot be dissolved. Parliamentary Activity A resolution by a parliamentary chamber is passed by a clear majority of deputies or senators present. A constitutional bill or an international treaty must be passed by a 60% majority of the total number of deputies and senators present. The Legislative Process Bills are sent to the Chamber of Deputies. The right of legislative initiative is possessed by a deputy, a group of deputies, the Senate, the Cabinet or local or regional cabinet representatives. A bill passed by the Chamber of Deputies is sent to the Senate which has the power to veto it, send it back to the Chamber of Deputies with amendments, or table the bill.
  12. 12. 12 | DOING BUSINESS IN THE CZECH REPUBLIC Elections to the Legislative Bodies Elections to the Chamber of Deputies and the Senate take place by secret ballot on the basis of general, equal and direct voting. The Chamber of Deputies is elected on the basis of proportional representation. Political parties must obtain five percent of the popular vote in order to gain seats in the chamber. The Senate is elected on the basis of majority vote. All citizens of the Czech Republic over 18 years of age have the right to vote for representatives in both chambers of Parliament. Candidates for the Chamber of Deputies must be over 21 years of age, while candidates for the Senate must be over 40 years of age. The Government The Government is the supreme body of executive power. It consists of the Prime Minister, Deputy Prime Minister and Ministers, and coordinates activities of the ministries and the central bodies of the state administration and manages the state administration throughout the territory of the state. The Government has exclusive legislative initiative in terms of the state budget. The Supreme Audit Office The Supreme Audit Office is an independent controlling agency which audits the management of state property and the implementation of the state budget. It scrutinizes how the resources of the state budget of the Czech Republic are raised and used. The Czech National Bank This is the central state bank of the Czech Republic. Under the law, the main goal of the bank is to preserve the stability and purchasing power of the currency, and while pursuing this goal, the bank is not dependent on the cabinet of the Czech Republic. The president and executives of the bank are appointed by the Head of State. The Constitutional Court The Constitutional Court was set up to protect constitutional rights. It consists of 15 judges who are appointed by the President - with the consent of the Senate - for a term of ten years. In their decisions, the judges are bound only by constitutional laws, international treaties, and by a law governing the procedure of the constitutional court. The Supreme Court The Supreme Court is the supreme judicial body in all matters within the jurisdiction of the courts, except those within the jurisdiction of the constitutional court or the supreme administrative court. The judges are only bound by law and they are in a position to decide whether other legal regulations are in accordance with the law.
  13. 13. DOING BUSINESS IN THE CZECH REPUBLIC | 13 Economy Of the emerging democracies in Central and Eastern Europe, the Czech Republic has one of the most developed industrialized economies. It is one of the most stable and prosperous of the post-Communist states of Central and Eastern Europe, and an EU member state. GDP per capita at purchasing power parity was $25.530 in 2014, which is 80 % of the EU average. The principal industries are heavy and general machine-building, iron and steel production, metalworking, chemical production, electronics, transportation equipment, textiles, glass, brewing, china, ceramics, and pharmaceuticals. Main agricultural products are sugar beet, fodder roots, potatoes, wheat, and hops. While the conservative inward-looking Czech financial system has remained relative healthy, the small, open, export-driven Czech economy remains very sensitive to changes in the economic performance of its main export markets, especially Germany. When Western Europe and Germany fell into recession in late 2008, demand for Czech goods plunged, leading to double digit drops in industrial production and exports. As a result, real GDP fell by 4.1% in 2009, with most of the decline occurring during the first quarter. Real GDP, however, has slowly recovered with positive quarter-on- quarter growth starting in the second half of 2009 and continuing throughout 2010. The automotive industry remains the largest single industry and, together with its suppliers, accounts for as much as 20% of Czech manufacturing and 35% of the Czech economy as a whole. The Czech Republic produced more than a million cars for the first time in 2010, over 80% of which were exported. Foreign and domestic businesses alike voice concerns about corruption, especially in public procurement. Other long-term challenges include dealing with a rapidly aging population, funding an unsustainable pension and health care system, and diversifying away from manufacturing and toward a more high-tech, services-based, knowledge economy. Although the Czech Republic was affected by the financial crisis, 2014 is consider as year of economical revive, as most of economic indicators restored to pre-crisis era.
  14. 14. 14 | DOING BUSINESS IN THE CZECH REPUBLIC Types of Czech Business Companies Limited Liability Company (Společnost s ručením omezeným) A limited liability company is the most common form of companies in the Czech Republic. It offers simpler administration than a Joint Stock Company and one person can be both the sole owner and executive. For a limited liability company to function it must have a minimum registered capital of CZK 100.000 (Czech koruna). It can be founded by at least one individual or legal entity. Joint-Stock Company (Akciová společnost) A joint stock company is more suitable for larger businesses and a larger number of shareholders. This type of company offers certain advantages regarding financing due to a higher paid-in capital and stricter management controls. The minimum required capital is CZK 2,000,000 or EUR 80,000, and a minimum of 30% must be paid upon registration for cash contributions and 100% of in-kind contributions. Shareholders can be Czech, foreigners, individuals or legal entities. General partnership (Veřejná obchodní společnost) In a general partnership, several partners - individuals or legal entities, operate under a corporate name. All parties are liable for all of the debts of the partnership to the extent of their contribution or investment. The partnership functions under an agreement. The purpose is a business at a larger scale. Limited Partnership (Komanditní společnost) In a limited partnership, the liability of one or more partners (individuals or legal entities) is limited to the amount of their paid and unpaid contributions. The amount of the contributions both paid and unpaid must be recorded in the Commercial Register. Such partners are known as limited partners. One or more partners, individuals or legal entities, are known as general partners and are liable for the partnerships obligations to the extent of all of their assets. The general partners can make management decisions and have the right to decide the future of the company. The limited partnership also functions under an agreement.
  15. 15. DOING BUSINESS IN THE CZECH REPUBLIC | 15 Economic Freedom Index The Czech Republic’s economic freedom score is 72.2, making its economy the 26th freest in the 2014 Index. Its overall score is 1.3 point better than last year, with notable improvements in half of the 10 economic freedoms, including investment freedom, business freedom, and freedom from corruption. The Czech Republic is ranked 15th out of 43 countries in the Europe region, and its overall score is higher than the regional and global averages. Strong commitments to economic and structural reforms have helped the Czech Republic develop a modern and flexible economy. Open to global trade and investment, the country enjoys high degrees of trade freedom, fiscal freedom, and financial freedom. The private sector accounts for about 80 percent of GDP and is the main driver of economic growth. Years of stable and robust economic expansion came to a stop in 2009 as a result of the global financial and economic downturn, but the Czech Republic weathered the turmoil relatively well. Further growth in economic freedom in the Czech Republic will require strengthened management of public finances, better protection of property rights, and more effective elimination of corruption. The government is placing a high priority on fiscal discipline and striving for budgetary balance after years of fiscal deficits. Business Freedom Incorporating a business has become less time-consuming, and licensing requirements have been eased. The minimum capital requirement is now less than 30 percent of the level of average annual income. Trade Freedom EU members have a low 1.1 percent average tariff rate and, in general, few non-tariff barriers to trade. However, the EU has high or escalating tariffs for agricultural and manufacturing products, and its MFN tariff code is complex. Non-tariff barriers reflected in the EU and Czech policy include agricultural and manufacturing subsidies, quotas, import restrictions and bans on some goods and services, market access restrictions in some service sectors, non-transparent and restrictive regulations and standards, and inconsistent regulatory and customs administration among the EU members. Services market restrictions are beyond the EU policy, and non-transparent government procurement and the enforcement of intellectual property rights remain problematic.
  16. 16. 16 | DOING BUSINESS IN THE CZECH REPUBLIC Fiscal Freedom The Czech Republic has relatively low tax rates. The flat income tax rate is 15 percent, and the top corporate tax rate has been reduced from 20 percent to 19 percent. Other taxes include a value-added tax (VAT), a real estate transfer tax, and an inheritance tax on non-family recipients. The overall tax burden is equivalent to 35.3 percent of GDP. Government Spending The government is critically involved in the economy, particularly in social programs. Tax increases and budget cuts have yielded surpluses in recent years, and government spending has stabilized at 43 percent of GDP. Public debt is around 45 percent of the domestic economy. Monetary Freedom Although a range of price controls are maintained, the state has taken steps to reduce subsidies for state pensions and green energy. Investment Freedom Legally, foreign and domestic investors are treated identically. The government screens foreign investment projects in banking, insurance, and defence, where the state is a partner. Slow legislative and judicial reform, uneven contract enforcement, bureaucracy, and corruption are obstacles to foreign investment. Most major state-owned companies have been privatized with foreign participation. There are no restrictions on payments or current transfers, and residents and non-residents may hold foreign exchange accounts. Branches or offices of foreign companies may buy local real estate, except for farmland or woodland. Financial Freedom TheCzechRepublic’sfinancialsectorisoneofCentralandEasternEurope’smostadvanced. The state is the controlling shareholder in two banks. Foreign-controlled banks account for over 80 percent of assets. Insurance companies and pension funds include significant foreign participation. The supervisory framework is well established. Capital markets are small and lack transparency, but regulatory bodies have been merged to streamline oversight. The global financial turmoil’s impact on banking has been relatively modest. The relatively well regulated financial market continues to grow steadily. The banking sector remains competitive and resilient, offering a wider range of financial products.
  17. 17. DOING BUSINESS IN THE CZECH REPUBLIC | 17 Property Rights Property rights are protected by law, and contracts are generally secure. The judiciary is independent, but decisions vary from court to court. Commercial disputes can take years to resolve. Company registration is controlled by the courts and can be slow and complicated. Enforcing judgments and foreclosing security interests in land and personal property can be difficult. Freedom from Corruption In 2012, several scandals involving senior government officials highlighted ongoing corruption and lack of transparency and caused the European Commission to cut around $650 million of EU aid to the Czech Republic. Corruption is perceived as significant. The Czech Republic ranks 53rd out of 174 countries in Transparency International’s Corruption Perceptions Index for 2014. Allegations of corruption most often involve the court-controlled company registration system and the police. The Czech Republic has ratified the OECD’s anti-bribery convention, but there is little or no enforcement. It has signed but not ratified the U.N. Convention Against Corruption. Labor Freedom The labor market is relatively flexible, although the non-salary cost of employees can be burdensome. Percentage Change Business Freedom 70.1 +4.3 Trade Freedom 87.8 +1.0 Fiscal Freedom 81.7 -0.3 Government Spending 43.8 +0.3 Monetary Freedom 79.4 -2.3 Investment Freedom 80.0 +1.0 Financial Freedom 80.0 No change Property Rights 70.0 No change Freedom From Corruption 45.3 +1.3 Labor Freedom 84.0 -1.5 100-80 79.9-70 69.9-60 59.9-50 49.9-0 N/A Free Mostly free Moderately free Mostly unfree Repressed not ranked Table 1 Summary of Business Freedom Table 2 Distribution of Global Economic Freedom
  18. 18. 18 | DOING BUSINESS IN THE CZECH REPUBLIC Czech Republic’s Ranking in Doing Business 2011 To make the data comparable across economies, the indicators refer to a specific type of business, generally a local limited liability company operating in the largest business city. As standard assumptions are used in the data collection, comparisons and benchmarks are valid across economies. The data not only highlight the extent of obstacles to doing business; they also help identify the source of those obstacles, supporting policymakers in designing reform. The data set covers 189 economies: 47 in Sub-Saharan Africa, 32 in Latin America and the Caribbean, 26 in Eastern Europe and Central Asia, 25 in East Asia and Pacific, 20 in the Middle East and North Africa and 8 in South Asia, as well as 31 OECD high- income economies. Czech Republic - Compared to global good practice economy as well as selected economies: The Czech Republic is ranked 44 out of 189 economies in Ease of Doing Business. Ease of Doing Business 44 Starting a Business 110 Dealing with Construction Permits 139 Getting Electricity 123 Registering Property 31 Getting Credit 23 Protecting Minority Investors 83 Paying Taxes 119 Trading Across Borders 58 Enforcing Contracts 37 Resolving Insolvency 20 Table 3 The Czech Republic’s Ease of Doing Business ranking
  19. 19. Bangkok city skyline Topic Indicator Starting a Business Procedures (number) 9 Time (days) 19 Cost (% of income per capita) 8 Paid-in min. capital (% of income per capita) 0 Dealing with Construction Permits Procedures (number) 24 Time (days) 143 Cost (% of income per capita) 0.3 Getting Electricity Procedures (number) 6 Time (days) 129 Cost (% of income per capita) 175.8 Registering Property Procedures (number) 3 Time (days) 24 Cost (% of property value) 4 Getting Credit Strength of legal rights index (0-12) 7 Depth of credit information index (0-8) 7 Credit registry coverage (% of adults) 6.4 Credit bureau coverage (% of adults) 76.6 Protecting Minority Investors Extent of disclosure index (0-10) 2 Extent of director liability index (0-10) 5 Ease of shareholder suits index (0-10) 9 Extent of conflict of interest regulation index (0-10) 5.3 Extent of shareholder rights index (0-10.5) 7.5 Strength of governance structure index (0-10.5) 5.5 Extent of corporate transparency index (0-9) 3.5 Extent of shareholder governance index (0-10) 5.5 Strength of minority investor protection index (0-10) 5.4 Paying Taxes Payments (number per year) 8 Time (hours per year) 413 Profit tax (%) 7.6 Labour tax and contributions (%) 38.4 Other taxes (%) 2.6 Total tax rate (% profit) 48.5 Trading Across Borders Documents to export (number) 4 Cost to export (US$ per container) 1240 Cost to export (deflated US$ per container) 1240 Documents to import (number) 6 Time to import (days) 17 Cost to import (US$ per container) 1215 Cost to import (deflated US$ per container) 1215 Enforcing Contracts Time (days) 611 Cost (% of claim) 33 Procedures (number) 27 Resolving Insolvency Time (years) 2.1 Cost (% of estate) 17 Outcome (0 as piecemeal sale and 1 as going concern) 1 Recovery rate (cents on the dollar) 65.6 Commencement of proceedings index (0-3) 3 Management of debtor’s assets index (0-6) 5.5 Reorganization proceedings index (0-3) 3 Creditor participation index (0-4) 2 Strength of insolvency framework index (0-16) 13.5 Table 4 The Czech Republic’s Ease of Doing Business
  20. 20. 20 | DOING BUSINESS IN THE CZECH REPUBLICTraditional Thai boats, Railay Beach, Krabi Starting a Business A number of studies have shown that among the benefits of streamlining the process to start a business have been greater firm satisfaction and savings and more registered businesses, financial resources and job opportunities. Economies with higher entry cost are associated with a larger informal sector and a smaller number of legally registered firms. The Czech Republic’s accession to the EU in 2004 put the regulation of business activities in line with European standards and EU legislation. Setting up a business in the Czech Republic has thus become much easier and more transparent not only for entities domiciled in any EU Member State but also for entities domiciled outside the EU. Any business activity in the Czech Republic is generally subject to the issuance of a trade licence (regulated by the Trade Licensing Act) or another specific permit (regulated by a number of specific acts), depending on the type of business activity. Czech law generally provides that a foreign legal entity may undertake business activities in the Czech Republic under the same conditions and to the same extent as Czech entities. Under the Czech Trade Licensing Act, a legal entity with its seat in another EU Member State can temporarily provide its services within the territory of the Czech Republic based on trade licences issued in the Member State. If this legal entity’s activities become more regular and meet the legal definition of a business activity (i.e. continuous business activity carried out independently, at its own responsibility and aimed at generating a profit), it should either apply for the respective trade licences or other permits in the Czech Republic and subsequently register its branch in the Czech Commercial Register or set up a subsidiary in the Czech Republic. Dealing with building permits Complying with building regulations in developing economies can be so costly in time and money that many builders opt out. Builders may pay bribes to pass inspections or simply build illegally. Therefore, entrepreneurs tend to move to grey economy where they operate with less concern for safety, leaving everyone worse off. Registering Property Ensuring formal property rights is fundamental, which also applies to effective administration of real estate. No transfer of real estate is effective unless entered in the Land Register.
  21. 21. DOING BUSINESS IN THE CZECH REPUBLIC | 21 Getting Credit The depth of credit information index measures rules and practices affecting the coverage, scope and accessibility of credit information available through either a public credit registry or a private credit bureau. Credit information system mitigates the information asymmetry in lending and enables lenders to view a borrower’s financial history, providing them with valuable information to consider when assessing risk. Credit information system benefits borrowers as well, allowing good borrowers to establish a reputable credit history which will enable them to access credit more easily. The Legal Rights Index measures the degree to which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. Protecting Investors Stronger investor protection matters for the ability of companies to raise the capital needed to grow, innovate, diversify and complete. This is all the more crucial in times of financial crisis when entrepreneurs must navigate through defiant environments to finance their activities. Paying Taxes Taxes are essential to provide public amenities, infrastructure and services which are crucial for a properly functioning economy. Data shows that economies where it is more difficult and costly to pay taxes have larger shares of informal sector activity. Trading Across Borders Making trade between countries easier is increasingly important for business in today’s globalized world. Excessive document requirements, burdensome customs procedures, inefficient port operations and inadequate infrastructure all lead to extra costs and delays for exporters and importers, stifling trade potential. Trade facilitation tools such as electronic data interchange systems, risk-based inspections help improve an economy’s trading environment and boost firms’ international competitiveness.
  22. 22. 22 | DOING BUSINESS IN THE CZECH REPUBLIC Enforcing Contracts Well-functioning courts help businesses expand their network and markets. Where contract enforcement is efficient, firms have greater access to credit and are more likely to engage with new borrowers or customers. Data measures the efficiency of the judicial system in resolving a commercial sale dispute before local courts. Following the step-by-step evolution of a standardized case study, data relating to the time, cost and procedural complexity of resolving a commercial lawsuit are collected through the study of the codes of civil procedure and other court regulations, as well as through a survey completed by local litigation lawyers. Closing a Business A robust bankruptcy system functions as a filter, ensuring the survival of economically efficient companies and reallocating the resources of inefficient ones. Fast and cheap insolvency proceedings result in businesses’ fast return to normal operation and increase returns to creditors. By improving the expectations of creditors and debtors about the outcome of insolvency proceedings, well-functioning insolvency systems can facilitate access to finance, save more viable businesses, and thereby improve growth and sustainability in the economy overall. The Czech Republic made it easier to deal with insolvency by introducing further legal amendments to restrict setoffs in insolvency cases and suspending for some insolvent debtors the obligation to file for bankruptcy. Changes to business regulation The Czech Republic simplified its labour tax processes and reduced employer contribution rates for social security. The Czech Republic made it easier to deal with insolvency by introducing further regulations.
  23. 23. DOING BUSINESS IN THE CZECH REPUBLIC | 23 City of Telč, in central south Czech Republic, is a UNESCO World Heritage siteč
  24. 24. 24 | DOING BUSINESS IN THE CZECH REPUBLIC 4 Taxation For residents the world-wide income is taxable, for non-residents only Czech-sourced income is included in the tax base. 4.1. Corporate income tax The tax base is the accounting result adjusted in compliance with the special provision of the Income Taxes Act. The corporate tax rate is 19%. Certain listed investment funds pay a 5% corporate tax. The rate of corporate tax has been reduced constantly to encourage economic activity. For instance in 1992, the corporate tax rate was 45%. Non-deductible costs include items such as business entertainment (particularly costs incurred for refreshments, hospitality, or gifts), cash deficiencies and damage compensation. Dividends Tax of 15% is imposed on dividends paid by Czech corporations, unless the participation exemption applies. Capital Gains Capital gains in the Czech Republic are taxed as part of the general tax base and as such are taxed at 19%, unless the participation exemption applies. Participation exemption The participation exemption of capital gains and dividends is applicable on condition that 10% of the shares in a subsidiary are held for at least 12 months. Interest Income from interest is deemed to be a part of the general tax base and as such is taxed at 19% unless paid between related parties (exemption is applicable on condition that 25% of the shares in a subsidiary are held for at least 24 months). Thin Capitalization Financial expenses related to loans made available by related parties are not tax- deductible if the related-party debt to equity ratio exceeds 4:1. Tax Losses In the Czech Republic losses can be carried forward for 5 years. There is no carryback of losses.
  25. 25. DOING BUSINESS IN THE CZECH REPUBLIC | 25 Incentives Incentives such as training and job-creation grants are available in the manufacturing industry. However, these depend on the utilization of EU funds by local bodies and they are often subject to changes. In order to be eligible for such incentives you have to, for example, establish, expand or modernize the production, and be environmentally friendly. There is also a special tax allowance for entities undertaking research & development. Group relief No tax consolidation is available. Any company which qualifies as a controlling entity as defined by Czech accounting law is obliged to compile group consolidated financial statements. This must be done in compliance with Czech GAAP consolidation rules. However, any accounting consolidation is disregarded for tax purposes. Anti-avoidance rules There are no specific CFC rules in the Czech Republic. Only very general rules regulate the issue of anti-avoidance in international taxation. In principal, general abuse of law and substance-over-form rules are in place. Transfer pricing Related-party transactions must comply with the arm’s length principle, i.e. the prices agreed between related entities must correspond to fair market prices. Any deviation from this principle needs to be properly documented; otherwise the Tax Office may adjust the tax base by the difference between the arm’s length price and the price agreed. Reporting Dates The tax year in the Czech Republic is the calendar year ending on 31 December. The taxpayer may change the tax year to a fiscal year based on an announcement of the change to the competent Tax Office 3 months before the change. The standard deadline for filing a tax return is 3 months after the end of the tax year (i.e. 1 April in the case of a calendar year). If the taxpayer’s financial statements are subject to statutoryreviewbyanauditorinaccordancewiththeCzechAccountingAct,orifthetaxpayer authorizes a tax adviser to prepare the tax return provided that the Power of Attorney is filed with the Tax Office by the end of the regular deadline, the deadline is extended to 6 months following the end of the tax year (i.e. 1 July in the case of a calendar year). 4.2. Withholding tax Tax is deducted at source from the following payments to non-residents: • Interest 15% • Dividends 15% • Royalties 15%
  26. 26. 26 | DOING BUSINESS IN THE CZECH REPUBLIC The above rates can be reduced under an applicable double tax treaty. 4.3. Payroll taxation A taxpayer who employs employees in the territory of the Czech Republic is obliged to register for payroll tax in the Czech Republic and deduct, on a monthly basis, tax advances, social security and health insurance contributions from employees’ salaries. Payroll tax in the Czech Republic is currently at 15% out of the “super-gross wage” which is computed as the gross wage increased by the employer’s part of social security and health insurance (i.e. the super-gross wage is usually at 134% of the gross wage). Social security premiums are paid on a monthly basis, in the following volume: • 6.5% of gross income is paid by the employee (withheld by the employer), • 25% of gross income is paid by the employer. Health insurance premiums are paid on a monthly basis, in the following volume: • 4.5% of gross income is paid by the employee (withheld by the employer), • 9% of gross income is paid by the employer. 4.4. VAT VAT applies to supplies of goods and services, imported goods and intra-EU supplies of goods in the Czech Republic. Value Added Tax Rates • Standard 21% • First reduced 15% • Second reduced 10% Interest -15% Dividends -15% Royalties -15% Table 6 Withholding taxes Rates Normal 20% Reduced 14% Table 5 Tax rates
  27. 27. DOING BUSINESS IN THE CZECH REPUBLIC | 27 The Dancing House, Prague
  28. 28. 28 | DOING BUSINESS IN THE CZECH REPUBLIC Giant Buddha in Grand Palace, Bangkok The current VAT rates in the Czech Republic are 21% (a standard VAT rate applicable to most supplies), 15% (a first reduced VAT rate applicable only to specific supplies such as food, social housing or healthcare), and a new rate of 10% (a second reduced VAT rate applicable to baby food, products for the preparation of gluten-free food, pharmaceuticals and books). VAT payers registered in the Czech Republic are entitled to input VAT deduction provided that the inputs are used within their business activities for effecting taxable supplies or other supplies where the entitlement to the input VAT deduction is permitted by the Czech VAT Act. In the case of VAT registration, the VAT payer is also entitled to VAT deduction on taxable supplies purchased in a period of a maximum of 12 months before VAT registration, provided that such supplies are part of the VAT payer’s assets as at the effective date of the VAT registration. The taxation period is a calendar month for all newly registered VAT payers. The taxation period could be changed to quarterly after two years at the earliest provided that the total annual turnover does not exceed the statutory limit, which currently at CZK 10,000,000. If either the total volume of goods supplied by a taxpayer from other EU Member States to the Czech Republic or the total volume of goods sold from the Czech Republic to other EU Member States exceeds CZK.
  29. 29. DOING BUSINESS IN THE CZECH REPUBLIC | 29 5 Labor Law in Czech Republic The legal framework governing labour and employment issues is mainly provided for by the Labour Code. Furthermore, there are several collective agreements in place between the employers and employees’ representatives that provide specific rules for some sectors of the economy. Following its accession to the EU, the Czech Republic was obliged to incorporate a number of EU directives on labour relations, which apply generally throughout the EU. Employment contracts Types of contract Employment law defines various types of employment contracts, including the following: • Permanent contracts • Fixed-term employment contracts • Part-time employment contracts • Agreements to complete a job, Agreement to perform work. Trial period The length of the trial period must be stipulated in writing, which varies according to the type of contract. For permanent contracts the trial period is three months and up to six months for management employees. Employment contract termination Employment contracts can be terminated as follows: • By expiry of a particular term or upon completion of a specific task (for fixed or uncertain-term contracts) • By rescission by mutual agreement • Bydismissal(withajustcause, cancelationofthe jobposition,collectivedis¬missal or dismissal due to the employee’s lack of adaptation to new technologies) • Termination during the trial period • By notice served by the employee • By notice served by the employer subject to specific conditions
  30. 30. 30 | DOING BUSINESS IN THE CZECH REPUBLIC Working Hours Except specific cases and sectors of the economy, working hours do not exceed 40 hours per week. Employees are entitled to a rest break of at least 30 minutes provided for a maximum of six hours of work. Overtime is limited to a certain number of hours per year but this limit may vary depending on the particular collective agreement. Such agreements also provide for some specific rules related to shift work, night work, and so on. The law permits flexible working hours under specific conditions provided that they do not exceed certain limits. Holidays and Absences Holidays Employees are entitled to 20 working days of holidays per year. Employees’ entitlement to holiday may be increased by the employer. Employees with less than 1 year’s continuous service are entitled to a pro-rata part of holiday. Holiday is usually not taken during the trial period and may only be taken with the employer’s consent. The employer is entitled specify the holiday dates. However, the period of holidays is usually a matter of mutual agreement. Public holidays Under law, there are 13 national public holidays. Public holidays are not movable and are not changed in order to minimize mid-week interruptions. Absences Labor law lists a series of circumstances that can justify absences from work. In the case of sickness, the employee receives a wage compensation for the first 14 calendar days, i.e. 10 working days. However, the first three days are not paid. From the 15th calendar day onwards, the employee receives sickness benefits from the Czech Social Security Administration. The amounts of wage compensation provided by the employer or sickness benefits provided by the Social Security Administration are capped by three limits.
  31. 31. DOING BUSINESS IN THE CZECH REPUBLIC | 31 6 Accounting Accounting regulations and standards System and scope of accounting laws in the Czech Republic Basic rules and regulations are set out in Act No. 563/1991 Coll., on Accounting, as amended (the “Accounting Act”). The Accounting Act refers to: • Decrees of the Ministry of Finance of the Czech Republic (“MF CR”) issued for each type of organization (banks and financial institutions, private businesses, insurance companies, state-funded organizations, foundations, not-for-profit organizations, and political parties); and • Czech accounting standards prepared and promulgated by the MF CR, which describe in detail the accounting procedures for each type of organization (see the previous point). The Accounting Act also defines the basic requirements for preparing and publishing annual reports and the conditions that trigger the need for a mandatory statutory audit of financial statements. Companies whose securities are publicly traded are subject to stricter rules for publication of financial information, especially information that must be included within annual reports and the obligation to present financial information on an ongoing basis to the Czech National Bank, which acts as the common regulator of the financial markets. Yet more extensive requirements on these organizations are stipulated by the Capital Market Trading Act. The main authority regulating accounting and audits is still the state but developments in this area are shared by a number of professional organizations: the Chamber of Auditors of the Czech Republic, the Union of Accountants, and, in particular, the all-encompassing National Accounting Council. The latter primarily comments on bills and interpretations of accounting regulations. Although the interpretations by the National Accounting Council are not incorporated into accounting legislation and therefore not binding, their influence on practice has been growing. Obligatory application of IFRS for issuers of public securities A company whose securities are traded on regulated public markets in the EU Member States is required to compile and present both financial statements and consolidated financial statements prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union instead of financial statements prepared under Czech regulations. All other private businesses in the Czech Republic can apply IFRS directly instead of Czech accounting regulations when compiling their consolidated financial statements.
  32. 32. 32 | DOING BUSINESS IN THE CZECH REPUBLIC The obligation described above to present financial statements in accordance with IFRS has no effect on the current corporate income tax liability. As tax laws are based on bookkeeping done in accordance with Czech regulations, companies that report in accordance with IFRS must also maintain accounting records sufficient to enable them to ascertain their business result in accordance with Czech accounting regulations. In practice, an adjustement of the accounting records kept in accordance with IFRS to the accounting records kept in accordance with Czech accounting regulations is done outside the accounting system, with the reconciliation of the business results and equity being performed subsequently. If technically feasible, it is possible to do bookkeeping both in accordance with IFRS and Czech accounting regulations directly in the accounting system. Voluntary application of IFRS Companies Companies whose securities are temporarily NOT traded on regulated public marketsintheEUMemberStatescaneithercontinuedoingthebookkeepinginaccordance with IFRS and report financial statements in accordance with IFRS (on condition that the requirements prescribed in the Accounting Act are met) or do the bookkeeping under the Czech accounting regulations. The companies presuming preparation of consolidated financial statements (or the consolidation package) in accordance with IFRS as the consolidating or the consolidated company can either report in accordance with IFRS or under the Czech accounting regulations. As stated in the previous article, tax laws are based on bookkeeping carried out in accordance with Czech regulations. Companies that report in accordance with IFRS must also maintain accounting records sufficient to enable them to ascertain their business result in accordance with Czech accounting regulations. Main differences between financial reporting under Czech accounting standards and IFRS Financial reporting requirements are laid down in the EU Fourth and Seventh Directives. Some key terms and principles are taken from IFRS, the most important being the priority that facts be portrayed truly and accurately. Other basic principles – such as the accruals principle, the prudence principle, and the going concern principle – are also in accordance with internationally recognized financial reporting principles. This applies in particular to banks, financial institutions, and private businesses. Accounting rules valid for other types of organizations are closer to valid tax regulations and the needs of the state. Although Czech accounting principles and IFRS are becoming closer, the financial reporting and accounting system in the Czech Republic is still strongly influenced by tax laws.
  33. 33. DOING BUSINESS IN THE CZECH REPUBLIC | 33 Despite the efforts to harmonize accounting regulations with IFRS in recent years, there are areas of significant differences between IFRS and Czech financial reporting. Such areas include, for example, financial leasing. Other areas where Czech regulations differ from IFRS are, for example, provisions, reporting of extraordinary items, accounting for revenues including long-term contracts (it is prohibited to use the percentage of completion method to account for revenues) and accounting for business combinations. Czech regulations also require information in the financial statements to be significantly more succinct than that required by IFRS. Publication and disclosure obligations Each year, all entities must submit electronically their approved financial statements to the commercial register maintained by the court of competent jurisdiction. Entities whose financial statements must be audited by statutory auditors are also required to present annual reports. These must include the audited financial statements as well as the auditor’s report and information about previous and anticipated financial and business developments. Companies controlled by other entities must also include in their annual reports a related-party report under Section 66a of the Commercial Code. This report must also be audited by the company’s auditor. Issuers of public securities are also obliged to disclose on an ongoing basis semi-annual reports to the Czech National Bank. The reports must contain the balance sheet and the profit and loss account and certain other financial information. The reports need not be audited however.
  34. 34. 34 | DOING BUSINESS IN THE CZECH REPUBLIC 7 Intellectual Property Intellectual property law covers all legal property rights over original creations, such as commercial and artistic products. Protection is granted to both tangible and intangible works (i.e. musical, literary and artistic works, ideas, discoveries and inventions, words, phrases, symbols and designs). Industrial property rights Copyrights, trademarks, patents and industrial designs are the most common forms of intellectual property protection. Industrial property rights cover: • Technical products (inventions and utility models) • Industrial design items (industrial models, including designs) • Identification rights (designations of origin and trade marks) • Other types of works, such as improved integrated circuits (semiconductor topographies), new animal breeds and farming methods. Under industrial property law, inventions that fulfill certain conditions may be granted patents. A utility model is a new, industrially-useful technical solution which goes beyond the bounds of mere professional know-how. For items with a lower level of inventiveness or less economic importance, a simpler, quicker and less costly form of protection than a patent may be chosen for the invention. The topography of semiconductor products is a series of fixed or coded interrelated patterns representing a three-dimensional permanent arrangement of layers. An “industrial model” is understood to mean the appearance of a product or its parts (marks of lines, outlines, colour, shape and the materials or decorations used). A registered trade mark is a distinctive sign or indicator that allows people to distinguish one’s products or services from another’s already present on the market. It can be a name, a logo, the shape of a product or its packaging. A “designation of origin” is understood to mean the name of an area or location identifying goods typical of the location for their quality or special characteristics.
  35. 35. DOING BUSINESS IN THE CZECH REPUBLIC | 35 The geographical indication is the name of an area that identifies goods coming from that area. A product is entitled to geographical indication protection if it has a specific quality, reputation or other characteristic that is tied to a specific geographical area where it has to be produced, processed and prepared. The types of property rights resulting from a creative activity are: • Industrial rights (such as right to inventions, utility models and industrial models) • Copyright. Ownership rights arising from non-creative activities mainly include the right of the producer of a sound recording to use the recording and to assign to a third party by contract an entitlement to exercise the right. The types of designation rights are: • Trade mark • Designation of origin • Geographical indication. Rights to the protection of personality include the protection of a person’s private life, reputation, dignity and privacy. Copyright Copyright grants the creator of an original piece of work exclusive rights to his or her work for a certain period. It is not necessary to register works to be entitled to protection. The intellectual property right is, in fact, automatic. Property rights last, unless otherwise stipulated, for the period of the author’s life and for 70 years after his or her death. Copyright includes: • Personality rights of the author - the personal interests of the author and his or her connection to the work • Property rights of the author - the asset value of the work. The Act on Copyright and Rights Related to Copyright is the main law covering this issue. For copyright protection to arise for a computer program in the Czech Republic, no actual registration is necessary, as all computer programs are subject to informal protection. Databases are also protected under copyright law regardless of what form they take. Advertising is regarded under the Copyright Act as a work of art and is protected in the same way. However, the Act does not protect actual suggestions before they have been put into effect and nor does it protect ideas, processes or methods. Design is the legally protected form of industrial models (see above). As to the multimedia, the producer of an audiovisual recording has exclusive
  36. 36. 36 | DOING BUSINESS IN THE CZECH REPUBLIC property rights to use the audiovisual recording and to assign to another by contract an entitlement to exercise this right. Industrial drawings are the legally protected form of utility models (see above). Works of cartography (maps) are regarded as collective works under the Copyright Act, since individual contributions cannot be used independently. The Copyright Act also covers literary works and other scientific and artistic works, as well as television broadcasts. Commercial strategies Commercial strategies may be commercially confidential and therefore included among industrialpropertyrights.Relatedconceptsincludeknow-howandconfidentialinformation. Intellectual protection authorities The Industrial Property Office collects all applications for intellectual property rights and examines their eligibility. It keeps records of all products covered by industrial property rights. A list of the products is published in the Official Journal and in its public registers. Protecting intellectual rights abroad The Czech Republic is a member of the World Intellectual Property Organization (WIPO) andtheEuropeanPatentOrganisation(EPO),andissignatorytotheAgreementonTrade- Related Aspects of Intellectual Property Rights (the TRIPS Agreement) administered by the World Trade Organization. Combating counterfeiting and piracy The Ministry of Industry and Trade has established an inter-ministerial commission on combating violation of intellectual property rights. Its aim is to help increase protection and respect for intellectual property rights in the Czech Republic. The Government of the Czech Republic has developed an Action Plan against Piracy and Counterfeiting.
  37. 37. Charles DOING BUSINESS IN THE CZECH REPUBLIC | 37 Charles Bridge with Prague Castle in the background
  38. 38. 38 | DOING BUSINESS IN THE CZECH REPUBLIC 8 Contact details About RSM TACOMA RSM TACOMA is a leading Czech advisory firm providing services in respect of mergers & acquisitions, corporate finance, valuation, tax, trust services, audit, management consulting, accounting, and payroll. RSM TACOMA has been active in the Czech market since 1993, and in 2011 joined RSM International, the seventh largest global independent consulting network. For more information, visit our website at www.rsm-tacoma.cz. RSM TACOMA Amazon Court Karolinská 661/4 186 00 Prague Czech Republic T +420 226 219 000 E info@rsm.cz W www.rsm.cz RSM International 11 Old Jewry London EC2R 8DU T +(0)20 7601 1080 F +(0)20 7601 1090 W www.rsm.global
  39. 39. DOING BUSINESS IN THE CZECH REPUBLIC | 39 9 About RSM International RSM International is the world’s 7th largest network of audit, tax and advisory firms and the 6th largest global provider of tax services. The network has fully independent member firms and correspondents in 112 countries. The member firms have a combined total of 37,443 staff including 3,279 partners in 732 offices. For more information on RSM international, visit www.rsmi.com The aim of this publication is to provide general information about doing business in the Czech Republic and every effort has been made to ensure the contents are accurate and current. However tax rates, legislation and economic conditions referred to in this publication are only accurate at time of writing. Information in this publication is in no way intended to replace or supersede independent or other professional advice. Copies of this booklet or additional information can be obtained from the RSM International Executive Office or RSM TACOMA. RSM International is the name given to a network of independent accounting and consulting firms each of which practices in its own right. RSM International does not exist in any jurisdiction as a separate legal entity. The network is administered by RSM International Limited, a company registered in England and Wales (company number 4040598) whose registered office is at 11 Old Jewry, London EC2R 8DU. Intellec­ tual property rights used by members of the network including the trademark RSM International are owned by RSM International Association, an association governed by 60 et seq. of the Civil Code of Switzerland whose seat is in Zug.
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  50. 50. 50 | DOING BUSINESS IN THE CZECH REPUBLIC Contacts For the member firms of RSM International in Thailand: RSM Advisory (Thailand) Limited Mr Gareth Hughes – Managing Director Mr Mark Butters – Business Services Director RSM Audit Services (Thailand) Limited Mr Prawit Wipusirikup – Audit Principal Mr Surachai Damnoenwong – Audit Principal RSM Recruitment (Thailand) Limited Mr Mike Holloway – Director 26th Floor, Sathorn City Tower 175 South Sathorn Road Thungmahamek, Sathorn Bangkok 10120 Thailand T: +66 (0) 2670 9002-6 F: +66 (0) 2670 9027-8 E: AskUs@rsmthailand.com W: www.rsmthailand.com
  51. 51. Damnoen Saduak floating market, near Bangkok
  52. 52. RSM International Executive Office 11 Old Jewry London EC2R 8DU United Kingdom T: +44 (0)20 7601 1080 F: +44 (0)20 7601 1090 E: rsmcommunications@rsmi.com www.rsmi.com RSM is the brand used by a network of independent accounting and advisory firms each of which practices in its own right. The network is not itself a separate legal entity of any description in any jurisdiction. The network is administered by RSM International Limited, a company registered in England and Wales (company number 4040598) whose registered office is at 11 Old Jewry, London EC2R 8DU. The brand and trademark RSM and other intellectual property rights used by members of the network are owned by RSM International Association, an association governed by article 60 et seq of the Civil Code of Switzerland whose seat is in Zug. © RSM International Association, 2012

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