The currency of the Czech Republic is the Czech Crown (Kc). The crown consists of 100 hellers. Coins in circulation: 10, 20 and 50 hellers; 1, 2, 5, 10, 20 and 50 crowns. Bank notes in circulation: 20, 50, 100, 200, 500, 1000 and 5000 crowns. A 2000 Kc bank note is currently being prepared.


Full convertibility of the Czech Crown for current account transactions and partial liberalization for capital account transactions came into effect 1 October 1995. Full capital account convertibility is planned to be achieved by the end of the decade. The Crown continues to be fixed to the D-mark and US dollar, weighting 65% and 35% respectively, against which it fluctuates by 7.5% either side of parity. As of February 28, 1996 the fluctuation band of the Czech Crown was anlarged from +/- 0.5% to +/- 7.5%. The Czech crown's exchange rate has remained stable for over five years. It was established at 28 Kc per USD in December 1990 and is currently close to 27 Kc per USD. The exchange rate is updated and published daily by the Czech National Bank in a list that includes European convertible currencies, the ECU, Australian dollar, Japanese yen, Canadian dollar, New Zealand dollar and USD.

Foreign         Value in            Currency volatility against
currency        Kc*                 the dollar**

USD             27.212              Russian rouble    35.4
DEM             17.903              Chinese yuan      16.1
GBP             42.285              Brazilian real    14.4
FRF              5.292              Japanese yen      14.2
100 JPY         24.176              German mark        7.1
ECU             33.916              Singapore dollar   6.9
ATS              2.545              Chilean peso       5.9
1000 ITL        17.768              Czech koruna       4.2

* Exchange rates on July 15     **Standard deviation of the 
                                  changes in quarterly exchange
                                  rates compared with the 
                                  first quarter of 1992
                                  SOURCE: The Economist, July 96 

  • Foreign Exchange Law. The legal background for foreign exchange operations in the Czech republic (CR) is provided by the Foreign Exchange Law. To determine foreign exchange entitlements of both physical and legal persons involved in foreign exchange operations, the law's decisive criterion is not citizenship but the possession of a permanent residence permit.
  • Protection of foreign investment. The foreign exchange law provides protection for the repatriation of capital and profits. Investment protection and double taxation avoidance treaties currently exist with many countries (a list of these treaties is available at CzechInvest) and several more are being negotiated. Foreigners can also transfer or export foreign vouchers, foreign securities and savings books in foreign currency.


Prior to 1989, the Czechoslovak banking system was highly centralised. The most important step was the abandoning of the single-bank system and the creation of the two-level banking structure. Since the revolution, the banking sector has been fundamentally restructured, with the number of banks increasing from only two in 1989 to 57 in March 1994.

  • Central bank: On January 1, 1993, the Czech National Bank (Ceska narodni banka) was formed from elements of the former Czechoslovak State Bank to become the CR's central bank. The Czech National Bank is by law autonomous and can set interest rates, regulate money markets, control the money supply and be responsible for exchange rates. There are virtually no administrative ceilings on either the credit supply or interest rates.
  • Commercial banking: Of the 59 commercial banks currently in the CR, 15 are completely Czech-owned, 19 are partially foreign-owned, 21 are completely foreign-owned and 4 banks with extraordinary regime. Apart from banks, there are several specialised financial institutions such as investment companies and the Prague Stock Exchange. Associations for banks, insurance and other specialised institutions are similar to those abroad.
  • Banking products and services: Most banks are universal commercial banks that provide a variety of banking products and services. In addition to such typical products as loans and transaction payments, most banks provide other services such as trade promotion, consulting, guarantee and foreign exchange operations, and stock market and foundation services. Each of the larger banks has daughter companies that operate investment and privatisation funds and are also active in leasing and consulting enterprises. Most of the banks have connections to the international banking industry.
  • Bank Accounts: All Czech enterprises, including those with 100% foreign ownership, must open a bank account as part of the registration process.
  • Credits: Foreign entrepreneurs can make use of credits granted by both Czech and foreign banks. Czech banks offer short-term (up to one year), medium-term (1-4 years) and long-term (over four years) credit. The rate of interest varies according to the duration of credit and is expected to decrease along with future economic development.
  • Entry of foreign banks: Foreign banks are not restricted from entering the CR. The same regulations apply to foreign and domestic banks. The present minimum capital requirement is 500 million Kc (approximately US$16.7 million). Banking licenses are granted by the Czech National Bank.


The legal framework governing insurance activities allows insurance and re-insurance companies incorporated either as a state corporation, joint-stock company, co-operative society or co-operative enterprise. Other types of legal enterprises may engage in insurance activities with permission of the Ministry of Finance.

Like any business in the Czech Republic, insurance and re-insurance companies must register their representative with the Commercial Registry and have a representative office in the Czech Republic. Foreign persons may only establish an insurance company with a seat in the Czech Republic in the form of a joint-stock company.

All domestic and foreign legal entities and natural persons in the insurance business in the Czech Republic are subject to state regulatory authorities.

The number of insurance and reinsurance companies presently operating in the insurance market in the CR has increased to about 30.

The Czech Insurance Company (Ceska pojist'ovna, a.s.), offering a full range of services, dominates with 82% marketshare.

Other significant insurance companies include :

Ceska kooperativa - druzstevni pojist'ovna, a.s.
Kooperativa - moravskoslezska druzstevni pojist'ovna, a.s.
Nationale-Nederlanden - Life Insurance Co.
Zivnostenska pojist'ovna, a.s.
AMCICO - First AMERICAN-CZECH Insurance Company, a.s.
Pojist'ovna IB, a.s.
Allianz Insurance Company, a.s.
Erste Allgemeine Versicherungs,a.s.
Cesko-rakouska pojist'ovna, a.s.
Wintertour a.s.
Austria-Collegialitat Osterreichische Versicherung, a.s.
Gerling -Konzern, a.s. Branch Office for the CR
Gothaer Versicherungen, Branch Office for the CR and others.


  • Statements: Foreign and Czech owned enterprises are subject to the same accounting regulations. The main financial statements required are:

         an income statement (produced monthly);
         a balance sheet (produced biannually); and
         an annual financial statement

  • Audits: Currently, all joint stock companies and limited liability companies with either an annual turnover higher than 40 mil Kc or having total assets worth more than 20 mil Kc are required to have an audit. All of the " big six" auditing agencies are present in the CR - Coopers & Lybrand, Price Waterhouse, Ernst & &Young, KPMG, Arthur Andersen, Deloitte & Touche, and many smaller foreign and Czech auditors.

For further information contact CzechInvest at Politickych veznu 20, 112 49 Prague 1, Czech Republic Phone (42-2) 2422-1540 Fax: (42-2) 2422-1804

NOTE: Although we have made every effort to ensure the reliability of our sources, CzechInvest does not assume responsibility for its accuracy.