No. of new companies up 0.5% to 22,454 in 2012

Prague, Feb 4 (CT) - A total of 22,454 new companies were formed in the Czech Republic last year, 0.54 percent more than in 2011 when the number was the lowest in the last six years, according to an analysis of agency Ceska kapitalova informacni agentura (CEKIA).

The stagnation in interest in doing business is related to the unfavourable economic situation, the agency said.

"The significant fall in interest in new joint-stock companies surprised us. Their number sank by a quarter year on year. This is connected to the poor economic situation, the business environment and also concerns of entrepreneurs that anonymous shares will be banned," the agency's analyst Petra Stepanova commented on the data.

"Businesses in the Czech Republic perceive negatively in particular the instability in the commercial and tax legislation. The practice in the last few years has shown that in particular by tax laws, the legislative process has been excessively shortened, which causes that companies grapple with problems concerning accounting and calculation of taxes," Tomas Pacovsky, partner for tax and transaction advisory services at group Apogeo, told CTK.

"This influences business activities themselves, including setup of new companies, and causes even a bigger outflow of companies from the Czech Republic in the long term," he added.

Entrepreneurs invested over Kc93bn into the registered capital of newly set-up companies in 2012, of which 90 percent into joint-stock companies.

The highest number of new businesses (over 46 percent) was in Prague (10,378). Other regions with traditionally a strong position are Jihomoravsky (2,338), Moravskoslezsky (1,417) and Stredocesky (1,314).

Regions with the lowest number of new companies in 2012 were Karlovarsky (299), Vysocina (330) and Liberecky (357).

A total of 373,271 companies were registered in the Czech Republic at the end of 2012, 24,937 of them joint-stock companies and 348,334 limited-liability companies.

Since the end of 2011, the total number of companies registered in the Czech Republic has grown by 15,570 (+4.4 percent).

In the course of last year, 4,850 companies disappeared.

"Almost 90,000 companies have been formed since CEKIA started monitoring these statistics in detail six years ago but the percentage yr/yr growth by companies on the market in 2012 was the lowest since 2007," Stepanova noted.

The growth in the total number of companies has slowed down in the last few years. This is related, among other things, with the recession of the domestic economy and a highly competitive business environment, she added.

Number of newly setup companies* in CR in 2007-2012:

2012 2011 2010 2009 2008 2007
Joint-stock companies 862 1,159 1,174 1,095 1,336 3,967
Limited liability companies 21,592 21,174 22,460 21,756 22,638 21,063
TOTAL 22,454 22,333 23,634 22,851 23,974 25,030

*The statistics comprise only limited-liability companies and joint-stock companies, not, for example, societes commandite or associations of owners

Source: CEKIA