With a couple of exceptions, the richest Czechs have all relocated their firms to countries with lower corporate taxes, the Netherlands and Cyprus being the favorite destinations. Minister of Industry and Trade Martin Kuba (Civic Democrats, ODS) says it’s “unfair” that that these entrepreneurs tell the government how to improve conditions for business in the Czech Republic.
Owner of the real estate developer Central Group, Dušan Kunovský, is the latest high-profile Czech entrepreneur to relocate his firm abroad, announcing in February that henceforth his company will be owned through a Cypriot-registered entity. At the end of last year, 1,705 Czech firms were owned through Cypriot firms and 4,500 were controlled from the Netherlands.
“I consider it unfair that entrepreneurs advise us how to improve the business environment in the Czech Republic, but at the same time those same people make billions moving money to tax havens,” Kuba told the daily Lidové noviny.
In Cyprus, for example, there is no tax on company dividends, whereas in the Czech Republic the state levies a 15 percent tax.
Czech-owned companies that have their registered headquarters in the Netherlands include: the PPF Group, founded and owned by the richest Czech, Petr Kellner, and Zdeněk Bakala, largest shareholder of investment firm BXR, which is the largest shareholder of the mining firm New World Resources (NWR).
Czech companies owned through Cypriot entities include: Penta, whose shareholders include Marek Dospiva; Karel Komárek’s KKCG roup, which includes the largest Czech oil producer Moravské naftové doly (MND); and Czech Coal, owned through Indoverse (Czech) Coal Investments by Pavel Tykač and Jan Dienstl.
Czech companies formally owned from abroad typically justify this arrangement on the grounds of the slow Czech judicial system, and excessive, obstructive bureaucracy.
Among the richest Czechs there are just a few exceptions: Andrej Babiš, owner of the agro-chemical group Agrofert; Radovan Vítek, whose company Czech Property Investments (CPI) is the largest owner of residential property in the Czech Republic; and Jan Světlík, who owns a 45 percent stake in the engineering group Vítkovice Holding.