VERIFICATION OR DUE DILIGENCE OF REAL ESTATE IN THE CZECH REPUBLIC ᐈ

In the Czech Republic, as in other countries, there is a service of legal audit or due diligence of real estate. This service is due to the fact that a person spends a lot of money buying property, so when concluding any contract, including lease or purchase of real estate, it is necessary to check the objects of such real estate, to determine the legality of its origin. After all, such a service will cost much less than buying real estate and correcting the negative consequences that may arise in the event of incomplete inspection of real estate.

Due Diligence is a full-fledged detailed inspection of real estate, which is carried out before any transaction. During such an audit, a legal, tax, financial audit, assessment of potential risks when signing a lease or purchase of real estate. This procedure allows you to form an objective view of the object of investment, allows you to explore the history of creation, change of ownership and conflicts that arise with this property.

What to check before buying land, house, apartment or any other real estate:

Origin of the object and the first property right. Most often, violations of the law are allowed at the stage of construction and registration of property rights. That is why it is important to check the legal basis for the construction of the land, who built it and on what basis, whether there were any conflicts or disputes during construction.
Analysis of previous owners. It is important to know the history of the property, who owned it, what the previous owners changed, who they were. You can find out such information by checking all concluded purchase and sale agreements, donations and other agreements related to the change of the legal status of the real estate object, by monitoring the registers.
Check the status of the property now. It is necessary to investigate the documents on the basis of which the last registration of ownership took place, whether there are any encumbrances, whether there are seizures of property, or prohibition of registration, the absence or presence of litigation and decisions regarding real estate.

Physical inspection of the property

Verification of compliance with technical characteristics and all permits. There are cases when the previous owners made some changes and did not make the corresponding changes in the relevant registers.

Legal verification of real estate in the Czech Republic is not the collection of information from the Internet, but rather a thorough understanding of the legislation in the field of construction and experience in the accompaniment of construction and litigation.

What does Due Diligence consist of?

General
Financial – establishing the financial condition in the case of acquisition of the company (verification of owners, liabilities of the company, share capital, outstanding liabilities)
Tax – a detailed study of tax risks.
Legal – checking the legality of the company, the availability of the necessary licenses, permits, certificates, the availability of employees, the legality of their employment.
Operating – checking the profitability of the business, the possibility of introducing innovative technologies.

Based on the results of the inspection of the investment object in the Czech Republic, you will receive a conclusion of our company which will reflect all stages of the inspection with identified deficiencies and comments, as well as investment opinion on possible risks, if such.

Is company registration possible without a personal visit to the Czech Republic?

Yes. The procedure is fully adapted for remote launch. All legal actions are performed on the basis of a power of attorney, notarized and, if necessary, apostilled in your country.

Why shouldn't you use a share capital of 1 crown?

Although the law allows a share capital of 1 crown, minimal capital reduces trust from banks and European counterparties, and also creates problems when passing banking compliance (AML). To confirm the seriousness of intentions, it is recommended to contribute an amount of at least 10,000 – 100,000 crowns, which can be used for the company’s operational needs after opening the account.

What is the difference between an s.r.o. and a sole proprietor (OSVČ)?

Apart from the issue of limited liability, the key difference lies in taxation. OSVČs in the Czech Republic are eligible for a single tax regime (paušální daň), which in 2026 requires a fixed monthly payment of between 9,162 and 27,139 crowns, depending on income. However, the status of a sole proprietor limits business scaling and complicates interaction with large B2B clients, who prefer to work with VAT payers in the form of an s.r.o.