CZECH REPUBLIC Law and Practice Contributed by: Matěj Manderla, Jan Wagner, Ivo Hartmann and Aleš Malach, Tenacta, advokátní kancelář, s.r.o.
tion and, according to its type, for decision-making in the territory. The framework is supplemented by binding construc - tion requirements, in particular Decree No 146/2024 Coll, on Requirements for Construction, and, in certain municipalities, by special local building regulations, including the Prague Building Regulations and the Brno Building Regulations. Development is also subject to a range of sectoral public-law controls protecting specific public inter - ests, including environmental protection, environ - mental impact assessment where applicable, nature and landscape protection, heritage protection, water management, transport and technical infrastructure and public health. The system is administered at the national, regional and local level, in particular by the government and the Ministry for Regional Develop - ment, spatial-planning authorities, building authorities and affected authorities responsible for specific public interests. 4.2 Development Process, Challenges and Enforcement In the Czech Republic, development rights are obtained through a single permitting procedure under the Building Act, which replaces the former separate zoning and building-permit stages. Although the statutory decision periods are typically set at 30 days for simpler projects and 60 days for more complex ones, in practice these deadlines are rarely adhered to. The permitting process often takes significantly longer, sometimes extending by several months or years, depending on the complexity of the project, the workload of the authority, and the need to obtain additional opinions or complete missing docu - mentation. Only certain parties can participate in the process and raise objections, and only to protect their rights. These typically include, for example, owners of neighbouring properties, whose ownership rights may be directly affected, as well as relevant public authorities (such as environmental protection authorities).
Appeals are possible within the administrative sys - tem, and court review is available afterward, but under strict rules and short deadlines. If rules are breached, authorities can impose measures and fines, or even order removal of a building. In some cases, a building can be approved retrospectively. Finally, some projects require an occupancy permit before use, while others can be used after notifying the authority. 5. Investment Vehicles 5.1 Types of Entities Available to Investors to Hold Real Estate Assets Real estate may in principle be held through any legal vehicle capable of owning assets, including ordinary corporations and regulated fund structures. In prac - tice, however, commercial real estate is most com - monly held through a limited liability company (s.r.o.) acting as an SPV. Other vehicles often used for this purpose include the joint-stock company (a.s.) and the European company ( Societas Europaea – SE) – the European equivalent of a joint-stock company. 5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity Limited Liability Company The s.r.o. is the most common Czech SPV for hold - ing real estate. For individuals, a five-year holding period typically applies for a tax-exempt exit. The cost of establishing an s.r.o. is typically around EUR 800–1,000 in total (including notary, court fees and basic registrations). Joint-Stock and SE Company The a.s. has the same tax treatment at company level, and the same applies to an SE. For individu - als, a shorter three-year time test generally applies to shares. The cost of establishing an a.s. is typically around EUR 2,500–3,000. Participation Exemption and Abolition of the CZK40 Million Cap (2026) For corporate investors, exits are often structured under the participation exemption, usually requiring at least a 10% stake held for 12 months. From 2026,
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