Hi AllNeil Lewis has produced a report clearly laying out your options with regard to Czech companies, Jednatels and EU cards.You can download the report from the link below.http: / /www .propertysecrets .net /downloads /118 .htmlIf, after you've read the report, you have any further questions then Neil will be monitoring this thread for the next seven days and will answer them as soon as he can.Cheers.

Yep - let me have your questions - I'll be checking this forum topic for the next 7 days.CheersNeil

Dear NeilMany thanks for your detailed and very helpful report. I am currently jednatel of my czech company that owns 2 Prague properties ( Zelene and Kosik). I am happy to keep things as they are for the time being and risk paying the 24% tax on the profit on sale. My only question is will I be able to sell a property from my company direct to say a czech resident? I ask this because previous advice was that purchasers would be put off from buying from a company rather than an individual.Best regardsRuss

Neil, thanks for this useful summary. Like Neil, I have investments in Zelene and Kosic and have made myself Jednatel of my Czech company. One slight difference in my circumstances which is that a UK company owns the Czech company. I hope this will add to flexibility on sale later on.I am in Prague next week and will be discussing with lawyers the ramifications and costs of giving them POA to act on my behalf. I also hope to clarify exactly what the responsibilities of the Jednatel are in practical terms so I can act accordingly. If I learn anything in addition to what you've said I'll report back.Huw

Neil thanks very much for this. Very pleased with the document. This is exactly the information we've been waiting for.I'm in the process of sorting out the Czech company which I will be my own Jednatel for. This should complete any day now.I was planning to buy my Repy flat via the company but your document is making me think twice.

Question 1Is there an "Association of Czech financial advisors" or something with a website that can refer me to people qualified to give me the tax advice I need?Question 2Any idea when the Repy FPC is going to come out? Question 3Assuming I still have time to switch to the EU card approach - can you please, please, please prime companies.cz to be responsive to PS clients in a hurry to sort out an EU card. They've completely ignored my emails in the past.Thanks

Hi RussellGood question.When advisors say it is 'hard to sell an sro property' to a Czech - they are refering to the idea that you will be able to sell the shares in the company - rather than the asset (property) of the company.There is no benefit for a Czech to do this - as, if he is to live in it, he will lose his 5 year tax benefit - and it is his home - so this matters.However, I have never heard of there being a problem selling the asset - ie the property from a sro - as it doesn't much matter who the previous owner is.Of course, by selling the asset from the sro you create a profit - which gets taxed - but if you are okay with this - then you I don't beleive you will have any trouble.CheersNeil

Hi Huw - yes, please let us know about Jednatel responsibilities.I was only able to find one legal requirement - and that is that annual tax returns and tax payments must be made by 31st march each year.I also thought there might be a requirement (as per UK companies) to confirm the directors of the company - but I was told this was not the case by the lawyers. The reason being that the Jednatels are inscribed on a register - which provides a similar level of certaintly about who the directors are - and therefore, further annual director returns are unnecessary.I haven't been able to find any other obligations - at least not for an sro used for the purpose of holding property - and not actually trading.CheersNeil

Hi Peter - answers in boldQuestion 1Is there an "Association of Czech financial advisors" or something with a website that can refer me to people qualified to give me the tax advice I need?>> Not that I know of - but I am talking to tax advisors as a part of the L&MS - which we will be recommending... Question 2Any idea when the Repy FPC is going to come out? >> Well, all I can say is that NWD legal are very very slow - and have constantly messed up contracts on Nowy Medlanky - so I can only assume they will be late ... I'll get our team to follow up and update you via the Repy deal blog - you should also find that each deal blog will (tomorrow) contain the latest completion and contractual data that we hold - we use this info for internal purposes - but from tomorrow we'll be able to share this online too...Question 3Assuming I still have time to switch to the EU card approach - can you please, please, please prime companies.cz to be responsive to PS clients in a hurry to sort out an EU card. They've completely ignored my emails in the past.>> Sure - for all L&M clients - we'll handle the enquires / requests... to companies.cz and any other suppliers that we recommend - we'll also negotiate special rates - which will only be available via usHope this helpsCheersNeil

Sorry if this post gets a bit long...From Question 2, not exactly great news that NWD are so bad (I had noticed this when the last contract was due in September 2005 and wasn't sorted until June 2006). Thanks to all at PS for updating the Repy investment blog. Seems I have some breathing space until completion in March 2007.Clearly I'll need to make a decision on the EU card thing by the end of November at the very latest (ideally sooner). See questions 4 and 5 below regarding the schedule of this. Basically I'm concerned that the L&MS recommendations on tax advisors will come a bit late for me (I need to engage with an advisor in the next few weeks if I'm to make the correct decision on the EU card by November).Obviously to get more assistance from PS on this I'll have to sign up to L&MS.Judging by your reply to Russell the key issue for "to EU Card or not to EU Card" for me is tax. See question 7 below regarding this.

Question 4I really don't want to leave everything to a last minuite panic in March. As part of my preparations I've kicked off the process of finding a mortgage.The problem is that I'm currently applying for mortgages via my SRO. If I do this now and then get an EU card in February do you think I'll be able to swap my mortgage to me as an individual rather than via the SRO? If not then isn't it a bit late to be applying for a mortgage with my EU card in Feb when Repy completes in March?Question 5I've had a look at L&MS in the past but it seemed very very expensive when I add the PLP fees onto the local management fees it seems like all my rent goes on that rather than mortgage payments. If I do decide to go with L&MS for Repy; when should I think about signing up to it? I was thinking the TRP stuff wouldn't need to start until just before completion (i.e. Feb) but now you are saying that you won't point me at tax advisors unless I've already signed up to L&MS!?Question 6The price for my Repy appartment includes kitchen installation. In that case, would you expect me to sign up for TRP excluding kitchen? If I do that then I'll basically be on my own if there are any issues with the installed kitchen?Question 7In your Jednatels & SRO document on page 8 you mention that EU Cards would be suitable in perhaps 50% of cases. I guess this is really to do with tax.I know you can't give tax advice but perhaps you could indicate if I'm on the right track (or not) here:In theory an EU card will save you tax in the Czech Republic but I'll still have made a capital gain when I sell my property and I'm liable for CGT (at 40%) for that in the UK. OK so there is a double tax treaty so I don't have to pay twice. Why should I jump through hoops to avoid a 24% company tax if I'll have to pay 40% in total anyway?I guess I might be getting confused between the tax on Cz company profit (I'm guessing there is no UK tax on a Cz company I own making a profit) and a tax when I actually realise a capital gain if I sell the company or take money out as dividends (and pg 4 suggests that there is an additional Cz tax in that case too)?Well, it all sounds more complicated via a SRO anyway...Thanks in advance for your answers!

Hi PeterI have just been thru all this and had the same decisions to make a few months ago as you do now. Last week I was in Prague to collect my EU cards & sign 7 mortgage agreements at 90% LTV of VALUATION @ 4.3% 3 yr fixed. I'll tell you what I did & why... (I don't think anything I did conflicts with Neils report).1) Become the Jednatel of your company if you already hold property in the company name - so that you are in control of the assets. (if you do not already own assets in the company, then dump the company it is an expense & a hassle).2) Check your mortgage options early, I found that I could get better rates and more flexibility with the EU cards. I also believe there are tax advantages & it is likely to be easier to sell, but it all seems to get complicated the more you investigate it, & as Neil points out things are changing all the time.3) So primarily for the mortgage reason I applied for the EU cards with my wife. This is an important point, the ownership of the properties must match for the mortgages and for the EU cards (& therefore Jednatel) ie if your wife is joint owner etc.4) I already owned property in the company & decided it was not worth the hassle & expense of switching these to private ownership. You would need new mortgages from scratch, transfer the property (3% tax on value to pay). This is a shame, so I still have the company running aswell.5) The EU cards take 2 months, but they asked for an extra form right at the end, so it took another month atleast. I already owned a property in Prague (thru my sro) so I could use this as the address. If you do not already have a property there it may be a bit harder to get the EU card, you need to discuss it with the provider.I used SCF (SCFinance dot cz - contact Paul Wild) for the mortgages & the EU card process. I was very happy with them, they negotiated a very good deal, are knowledgeable & quick to respond. This is a PS recommended provider so hopefully I haven't broken any rules here. Good luck, Antony.