Setting up a company in the Czech Republic

I recently went through the process of setting up a company in the Czech Republic and since I found that most guides online are quite poor and/or outdated I decided to write about how I did it since I’ve done a lot of research to figure out the simplest way possible.

Your options

You have three ways you can set up a company. Firstly is the most traditional way which is having your lawyer do it for you. While this is a great option for more complex business with many partners, etc. it is also the most expensive option. If you choose to go with this option then stop reading and email your lawyer, they will guide you through the rest. This will typically cost around 25k for a standard company with one owner and increases from there based on the complexity

An alternative if you don’t want to go through a lawyer or your business is simpler, but you still don’t want to run around all the places yourself are companies that can start your company for you. These will run you 15k.

Lastly, there is the way I went with. Do everything yourself. This I would recommend for anyone with a two to three days of free time looking to save on expenses. I personally spent about 8k on this overall, but you could bring it down to a little over 7k if you aren’t pressed for time like I was. In the rest of this post, I’ll describe how I went about doing this and hopefully, it will sound much easier than the many articles I found online which made it seem quite intimidating.

Setting up the company yourself

Setting up a company yourself can be broken down into three phases. If you’ve decided on a name and what you’ll do then you’re already basically done with phase 1. Remember to look it up on Justice.cz and make sure there is nothing with a very similar name since that wouldn’t be allowed.

The second phase can be done in one or two steps depending on your mood. You either just contact a notary and go to your first meeting or go to the post office and then meet your notary. Either way, you will need all the basics like criminal history and proof your company has permission to operate in its HQ.

The criminal history is simple to understand for anyone who is Czech, but how does the company base work? Well, there are two options. If you own the land on which you are setting your company headquarters then you just need to write that you are given the company permission and then bring proof of ownership of the land. If someone else owns the land you need their written permission to base the HQ there and proof they own it.

Now that you have the two or if you’re just going to have the notary get them for you its time to create the company. This is basically half-hour at a notary where you sign a bunch of papers and by the end, you are walking away with a company. Now technically that company can’t conduct bossiness till you complete phase 3, but nevertheless, you now have an actual company.

Phase 3 starts by dropping by any bank and pay down the funding capital of the company. Next, go to your local council and get a “živnostenský list”. Once you have all of this go back to your notary and they will register you in the official databases.

That’s it. This seemingly daunting process of setting up a company yourself broken down into 3 simple phases. I still highly recommend you do some extra research just so you understand things better and seek proper advice from a licensed professional, which I am not, but nevertheless, this is how easy it can be to set your company up. Just let the notaries do almost all the work at almost no cost compared to a lawyer.

Trading Competition

Today I’ll be taking part in an inter-university trading competition focusing on US markets. In this first-ever post on here, I’ll break down my thoughts and approaches to this competition.

Trading in such a short time scale is entirely new to me since my regular trades usually last at least a few hours and above. There are three main things on my mind going into this. Firstly there is the fact that very few of my trades will be part of trading a large market trend. Most of my trades will be against algo trading systems, so it’s essential to keep in mind how they typically approach trading. Lastly, technical analysis and short term market momentum will be my primary source of trades. For me, this means I have to adjust my methods since I typically use these for timing entries and not for my whole trade, so the approach will have to be quite different.

The tools that I will have access to during the hour will be the following. Firstly a computer with Bloomberg terminal on it, which I will have split into three parts. The first one will be news with Bloomberg TV playing for some background noise while I focus. There is also the small possibility that they say something interesting that gives me a trade idea. The next section will be the current stock I’m looking at with some basic information. In the third and final section, I’ll try to have candle charts of every open position I have. Next will be my laptop with an iPad serving as a secondary screen. The tablet will have the trading interface open. My laptop will then have the chart with indicators of my choosing. The last thing will be my phone with a list of stocks I’ve picked beforehand with expectations that their volume is high enough to be nicely tradable on such a short time scale.

My focus will be primarily on large-cap stocks with high volume. This is for two reasons. Firstly I don’t know how the system plans to do its paper trading. If the system follows volume, it could be restrictive with larger trades. The more important thing, though, is that they are more likely to have retail investors reacting to the news. This, in combination with how quants trade could provide me enough price action even on these small time scales.

It is essential to understand that I will not be trading the news itself. My focus will be on taking advantage of the price movement which the news cause. I’ll always have a stop loss to save me from an overreaction to the news. However, the price will still follow basic rules of technical analysis as it forms the 4 hour and daily candles that I would usually trade.

My main tools of technical analysis won’t be the standard combination of RSI, MACD and Bollinger bands which many retail investors gravitate towards. This is because I don’t use them for my normal trading, so I am not as familiar with them. Therefore it would be risky to try to learn this on the fly. Instead, I will use three simple moving averages primarily as support and resistance lines. Then I’ll use Parabolic SAR as my primary trading strategy since I have seen it work very well with high volume stocks even on short time frames. Lastly, an indicator I’ve found to be excellent at catching short term market moves is TD sequential. I use it quite often to time my entries and sometimes to exit my positions manually, so I want to see how it stands up in these time frames.

Of course, beyond indicators to help me pick trades that make sense, I’ll still use the more traditional techniques. I’ll add a small amount of horizontal support and resistance lines from higher time frames. Candle shapes will be an integral part of where I set my stop loss. On top of that, both will help me decide what trades to take and which aren’t worth the exposure.

The last thing that needs to be clarified is how I will manage my risk. Since this is a competition, I’m willing to take on more risk than I would typically in order to have a chance to have a notable change in the value of the account. I’ll split the account into 20 lots. Most trades will be one lot each, with the possibility of 2 lots if I’m very confident in the trade and have a tight stop loss. I was lead to believe that leverage will be accessible on these accounts. Ordinarily, I wouldn’t go beyond 1:4, but here I’ll use up to 1:8 for longs and 1:4 for shorts. If it is possible, I will also take advantage of leveraging an open position. I’ll only do this once my stop loss can be set at break-even or even profitable point and only if I deem it necessary.


DISCLAIMER

The information contained on this website and the resources available for download through this website are not intended as, and shall not be understood or construed as, financial advice. I’m not an attorney, accountant or financial advisor, nor am I holding myself out to be, and the information contained on this website is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation.