This marks a major milestone for the Czech startup ecosystem, culminating from two years of intensive work by ecosystem stakeholders. Until now, Czech startups have been at a disadvantage compared to neighboring countries when it comes to attracting and retaining talented employees. That is now changing—the new framework brings conditions in line with international best practices. Ultimately, the Chamber selected a proposal by MP Michael Kohajda, which was passed as an amendment to the government’s bill on the unified monthly employer reporting system.
The new legal regime introduces three key changes:
ESOPs will be subject only to income tax, similar to regular shares, and will not be burdened by social security and health insurance contributions. This aligns the total tax burden with other European countries, allowing Czech companies and startups to better compete in international labor markets.
The “no tax before cash” principle applies—employees will be taxed only once they actually profit from selling their shares or equity, not beforehand.
ESOPs are now clearly defined in law, which increases trust between companies and employees when negotiating collaboration. The regime is voluntary—companies can opt in by registering with the Financial Administration. This adds flexibility and respects different stages of company growth.
Stock option programs are a standard part of employment offers abroad. By allowing broader teams—not just the original founders—to share in a company’s success, ESOPs have great potential to create favorable conditions for a new generation of entrepreneurs and economic opportunities. Success stories can be seen worldwide—from the U.S. and Israel to Spain, the UK, Sweden, and Estonia. A good example is the so-called “Skype mafia”—a group of now highly successful tech entrepreneurs and investors who were among the original employees of Estonia’s Skype. After the company’s successful sale, ESOPs distributed over $300 million among them, enabling many to launch new startups. This helped Estonia become the country with the highest startup density per capita.
The approved amendment will now proceed to the Senate. If everything goes according to plan, it should come into force on January 1, 2026.
Martin Jiránek, Chairman of the Czech Startup Association, stated: “I’m thrilled that years of hard work have paid off. Functional ESOPs are a vital step toward improving the startup and business environment in the Czech Republic. But the job isn’t done yet—we still have a lot of work to catch up with more innovative nations. The fact that politicians across the spectrum supported this reform is a great signal. It will help us push forward other important changes, both before and after the elections. Thanks to all ecosystem partners who contributed to the successful approval of ESOPs, and to the politicians for their support.”
Vojta Roček, Partner at Presto Ventures, commented: “While long overdue, the approval of ESOPs is just the first step in providing essential support to young entrepreneurs and their teams. We need to boost the Czech Republic’s competitiveness not just in the EU, but globally. Our country must attract both foreign capital and local innovators. Martin Jiránek delivered an incredible performance—thanks to him, for the first time, I believe we’re on the right path.”
Martin Švalbach and Václav Bílý from PRK Partners, stated: “This tax framework introduces a new perspective on employees who receive stock options from startups—treating them as investors. This makes rewarding key personnel via ESOPs more attractive. Startup employees are typically young professionals whom we need to motivate to work in startups and drive forward the entrepreneurial environment in the Czech Republic.”
And Radek Špicar, Vice President of Confederation of Industry and Transport, commented: “We can’t afford to keep losing companies with real potential. That’s why we’ve supported more attractive taxation for employee shares in the startup ecosystem from the beginning. After long negotiations, the Czech Republic is finally showing a more progressive face to this modern part of the economy.”
Lukáš Konečný, Junior Partner from Brno-based Y Soft Ventures: “The ESOP framework approved today is the result of long and complex discussions aimed at balancing the needs of startups, employees, founders, investors, and the state. It may not be a perfect solution, but it’s a crucial step forward with the potential to elevate the Czech Republic to a leading position in startup-friendly legislation. This is the kind of business support that will prove to be a win-win for everyone in the years ahead.” With Martin Vohánka, CEO and Founder of Eurowag:
“It’s clear that a well-designed ESOP framework can attract, retain, and properly motivate top-tier experts—an essential factor for long-term company development. This, in turn, significantly benefits the economy as a whole. That’s why we, as part of the Second Economic Transformation initiative, strongly pushed to bring our standards closer to those commonly used around the world.”
