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Buying commercial property in the Czech Republic: buy the building or the company that owns it?

You want to buy an office building, warehouse, retail park or hotel in the Czech Republic. You can buy the property itself, or the company (often an s.r.o.) that owns it. The second route is a company acquisition, with the company's debts, contracts and history.

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Short answer

  1. Asset deal: buy the property
  2. Share deal: buy the property company
  3. Check the Land Register and the company
  4. Pay the price through escrow

In a share deal the company stays the registered owner and you take on its debts. Check the Land Register and the company, and pay through escrow.

Describe your case

Quick answers

Can foreigners buy commercial property in the Czech Republic?
Yes. Foreign individuals and companies buy under the same rules as Czech buyers. Non-EU investors buying assets used for sensitive activities may need investment screening.
What is a share deal in Czech real estate?
Buying the company that owns the property instead of the property itself. The Land Register still shows the company as owner; you become its member.
Is there a real estate transfer tax in the Czech Republic?
No. The real estate acquisition tax was abolished in 2020. The annual real estate tax still applies to the owner.

When this situation arises

  • A foreign fund buys an office building or logistics park held in an s.r.o.
  • A seller offers the property only as a sale of the property company
  • An investor compares buying the asset with buying the company
  • A buyer finances the purchase with a bank loan secured by the property
  • A tenant-occupied building changes hands

What options do you have

Asset deal

A purchase contract and an application to the Land Register (katastr). You take the property with its registered mortgages, easements and leases, but not the seller's other debts.

Share deal

You buy the ownership interest in the property company: a share transfer agreement with certified signatures, any consents, and the Commercial Register entry. The company keeps its loans, contracts, leases and tax history.

Own Czech holding company

You set up a Czech s.r.o. that buys the property directly. Tax and financing drive this choice; ask tax advisers.

Recommended step-by-step process

  1. 1.

    Land Register

    Check the owner, mortgages, easements, pre-emption rights and notes on disputes or enforcement.

  2. 2.

    Company due diligence

    For a share deal, also the Commercial and Insolvency registers, accounts, loans, leases, disputes and beneficial owners.

  3. 3.

    Approvals

    Large deals may need merger clearance; non-EU buyers of assets used in sensitive sectors may need investment screening.

  4. 4.

    Agreement

    Purchase contract for the property, or share transfer agreement with seller warranties about the company.

  5. 5.

    Escrow

    The price goes into escrow with a lawyer, notary or bank and is released after registration in the Land Register, or once the share transfer takes effect.

  6. 6.

    Registrations

    Land Register entry for an asset deal; for a share deal, delivery of the agreement to the company, the Commercial Register and the beneficial owners register.

What documents to prepare

  • Land Register extract and cadastral map
  • Building permits and occupancy approvals
  • Lease agreements and rent roll
  • For a share deal: Commercial Register extract, memorandum, financial statements, loan and security documents
  • Escrow agreement
  • Corporate documents of the buyer, apostilled and translated

Common mistakes

  • Buying the property company without checking its debts and contracts
  • Paying before registration without escrow
  • Missing a mortgage, easement or lease in the Land Register
  • Assuming a share deal is automatically cheaper
  • Forgetting to record the new beneficial owner of the company

Risks and important deadlines

Land Register timing

The transfer is entered no earlier than 20 days after the Land Register notifies the owner; its effect dates back to the day the application arrived.

Company liabilities

In a share deal, debts that due diligence missed stay with the company you now own. Only warranties and indemnities protect you.

Annual real estate tax

The owner of the property pays real estate tax each year; a new owner files the return by 31 January of the following year. In a share deal the company remains the taxpayer.

Estimated costs

Lawyers' fees for due diligence, contracts and escrow are agreed in advance. Add the Land Register fee for an asset deal, signature certification and Commercial Register fees for a share deal, translations and tax advisers. The real estate transfer tax was abolished in 2020.

When it's worth contacting a lawyer

A Czech real-estate lawyer compares the asset and share routes, checks the Land Register and the property company, drafts the agreement with warranties, holds the price in escrow and files the registrations. On LawBridge you can find Czech business and real-estate lawyers by area of law and send them a request. A foreign investor's deal is a cross-border matter, and cross-border matters have no free option: lawyers always charge for their work, and nobody can guarantee the outcome of a deal.

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Frequently asked questions

When does the buyer become the owner in an asset deal?

On entry in the Land Register, with effect from the day the application reached the cadastral office. The office enters it no earlier than 20 days after notifying the owner.

How do I protect the purchase price?

Place it in escrow with a Czech lawyer, notary or bank and agree that it is released only after registration or, in a share deal, after the transfer takes effect.

Which route is better for tax?

It depends on the price, financing, the company's history and both parties' tax position. These pages give no tax advice; have both routes assessed by tax advisers.

What happens to existing leases?

In an asset deal the buyer takes over the leases with the property; in a share deal they stay with the company. Review them in due diligence.

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