European company

A European company or Societas Europaea (SE) is a prestigious and modern legal form of enterprise whose purpose is to simplify the free movement of capital in the European Union and to unify legal forms of business companies in the EU.

The main advantage is the possibility to move the company's domicile within the EU without its liquidation. The change of domicile brings with it the change from home legislation to the legislation of the country where the domicile is newly based.

A European company can freely choose any of the EU countries based on the most profitable area of business e.g.:

  • low income tax in Cyprus (10%)
  • suitable holding regime in the Netherlands
  • optimization of taxation of prepared transactions (the selling of interests or business with accounts receivable)

You will gain a multinational image a become a trustworthy partner for international business.

WHAT DOES A EUROPEAN COMPANY BRING?

  • utilization of contracts with the Czech Republic for safe investment
    • a stronger position for the company when dealing with the Czech Republic
    • a European company can use the contract with the Czech Republic concerning safe investment as a back-up (a Czech company does not have this opportunity)
  • Getting out of the influence of the Czech authorities
    • the company will abide by the law of the chosen country
    • Czech authorities can gain information about a European company only through competent authorities abroad (this is very problematic)
    • all letters must be delivered to the company's domicile abroad
    • eventual future law pursuits are dealt with in the company's domicile
  • Choice of the most suitable tax system within EU
    • after the company changes its domicile, tax laws of the chosen country apply to the company
  • Choice of the most suitable law system
    • law systems of older EU member states are much more stable than the Czech law system. They bring greater reliance for the enterpriser and a greater enforceability of law.
  • Saving costs of administration
    • the company can choose a so called monistic system of administration, in which the company is administered by only one corporate body (with a minimum of 2 members), the executive council. That means the lowering of general expenses as opposed to a regular corp. company, whose duty it is to have an advisory board.

CHARACTERIZATION OF A EUROPEAN COMPANY

  • it has already been registered in the trade register
  • it has not commenced any business, except for necessary steps to found the company (its registration in the trade register and registration for tax and income of corporations)
  • it has zero liabilities and active debts
  • its guarantee capital (120.000 EUR) has been paid in full

MEANS OF FOUNDATION

A European company is specific because it has limited means of foundation. The boards directive concerning the European company (2157/2001) specifies juristic forms of subjects, who can found a European company. They determine the 5 fixed means of foundation:

  1. merger of two or more joint-stock or European companies
    the founding of a European company by merger introduces an exceptional opportunity to move the domicile of the existing company to a chosen EU member state. For this reason it is the most often used option for founding companies. The most frequent merger option is a Czech and a Slovakian company with the newly founded company having its domicile on Cyprus or any other tax friendly destination.
  2. formation of a holding European company by two or more joint-stock companies, European companies or limited liability companies.
    in this case companies become daughters of the European company
  3. formation of a daughter European company.
    two companies (without limited juristic forms) from different member states can found a European company type daughter company.
  4. conversion of a joint-stock company founded according to laws of a chosen EU member state
    a joint-stock company (which has a daughter company for at least 2 years or a branch in another member state) can change its juristic form to a European company. This option does not allow the concurrent change of domicile.
  5. as a daughter company of an already existing European company
    a European company can without limit found other European companies.

An advantage of buying a ready-made company is that its owner can be a state or person who, for reasons mentioned above, cannot found a European company or founding it would be unbearably expensive and complicated.

WHEN SELLING A READY-MADE COMPANY WE ENSURE:

  1. Preparation of necessary documents.
  2. Organizing a general meeting in order to make changes in the company being sold:
    • Change of board, change of advisory board.
    • Change of business firm (if the client requests it).
    • Change/extension of the matter of business (if the client requests it).
    • Change of domicile (if the client requests it).
  3. Representing the client when acting with authorities of the state administration (trade register, finance office).
  4. Notification of the trade and collection of the trade certificates or license deeds.
  5. Verified translation of documents.
  6. Filing a proposal for registration of changes in the company in the trade register.
  7. Registration of the company for VAT or other taxes.

 

Contact

+420 515 917 111

info@zalozene-spolecnosti.cz

Commercial Register

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