Legal and Tax Challenges of Real Estate Share Deals in the Czech Republic

|Attorney|Czech Bar Association Reg. No. 14692

Published:1/30/2026

Real estate sales in the Czech Republic can be structured as a direct sale (asset deal) or as a sale of shares or interests in a company (share deal). From the perspective of an international investor, a share deal often appears to be a more economically advantageous solution, as the company continues to exist with all its rights, licenses, and lease agreements.

Key takeaways

The sale of a share in a Czech real estate company may be subject to taxation in the Czech Republic.

A share deal is faster but carries risks of hidden historical liabilities.

The buyer must often withhold tax security; otherwise, they are liable for it under Czech law.

The new owner assumes environmental and employment law liabilities.

Without a local advisor, the risk of error is high, which is why ARROWS Law Firm offers a complete service.

ARROWS law firm

245 007 740 consultation@arws.cz

Conclusion

A cross-border share deal in real estate is a sophisticated transaction, and attempting to handle it without professional advice brings risks. Problematic areas such as taxation and hidden liabilities require expert knowledge of the Czech legal environment.

The attorneys at ARROWS Law Firm are ready to guide you safely through the entire process. Contact us at consultation@arws.cz and we will ensure your investment in the Czech Republic is successful.

Frequently Asked Questions

1. Will I have to pay tax in the Czech Republic if I sell shares as a foreigner?

This depends on the relevant Double Taxation Treaty. Many treaties contain a real estate clause that gives the Czech Republic the right to tax the profit if the company's value is derived primarily from real estate.

2. What is tax security and when is it paid?

It is the buyer's obligation to withhold an amount, usually 1%, when paying a seller outside the EU/EEA. It serves to ensure that the seller files a tax return in the Czech Republic.

3. What risks transfer to me when buying a share?

You assume the entire history of the company. This includes debts, contractual obligations, tax arrears, employment relationships, and environmental liability.

4. How long does it take to register a change of shareholder?

The statutory deadline for the Czech court is 5 working days from the submission of a flawless petition. With a notarial deed, direct registration can be performed almost immediately.

5. Is due diligence necessary?

It is not legally required, but commercially it is essential. Without it, you do not know what you are buying and cannot correctly set up protective mechanisms in the purchase agreement.

ARROWS law firm

245 007 740 consultation@arws.cz

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About the author

Mgr. Vojtěch Sucharda

Associate, partner

LinkedIn|Czech Bar Association Reg. No. 14692

Managing Partner ARROWS International | Head of Legal Practice Group ETL Global

sucharda@arws.cz 245 007 740

Disclaimer:

The information contained in this article is for general informational purposes only and serves as a basic guide to the issue as of 2026. Although we strive for maximum accuracy, laws and their interpretation evolve over time. We are ARROWS Law Firm, a member of the Czech Bar Association (our supervisory authority), and for the maximum security of our clients, we are insured for professional liability with a limit of CZK 400,000,000. To verify the current wording of the regulations and their application to your specific situation, it is necessary to contact ARROWS Law Firm directly (consultation@arws.cz). We are not liable for any damages arising from the independent use of the information in this article without prior individual legal consultation.