Home I need to arrange… Doing Business as a Foreigner in the Czech Republic Entrepreneurship of Natural Persons Trade Business of Foreigners in the CR

Trade Business of Foreigners in the CR

What is a trade? What is a trade licence?

Trade is a continuous activity carried out independently in the entrepreneur’s own name and on their own responsibility with the purpose of making a profit and under the conditions set out in the Trade Licensing Act. A one-off job, an activity that is not carried out with the purpose of making profit, or work carried out on the basis of an employment relationship therefore do not qualify as trades. A trade may be carried out only based on a trade licence issued by the Trade Licensing Office.

If your employer forces you to acquire a trade licence and to formally act as a sole trader, even though the activities you are supposed to carry out for them are typical for an employee, it is an illegal circumvention of the law (a.k.a. the Švarc system)!

Trade business is regulated by the Trade Licensing Act. The current version of the law can be found on the website of the Ministry of Industry and Trade.

How does a foreigner obtain a trade license in the CR?

On the website of the Ministry of Industry and Trade you can find a Trade Licensing Guide for Foreign Natural Persons (citizens of EU, EEA, and Switzerland).

Types of trades

There are two main groups of trades: notifiable and permitted.

Notifiable trades

All you need to do to register a notifiable trade is to inform the Trade Licensing Office of your intention to register the trade and you may start your business immediately. There are several subcategories of notifiable trades:

  • Unqualified trades – only general conditions for pursuing the trade need to be fulfilled (attaining the age of 18, legal capacity, clean criminal record); it is not necessary to prove professional or other competence. This concerns activities such as shoe manufacturing and repair, accommodation services, or photographic services, which do not require any certificate of professional competence. A full list of unqualified trades can be found in Annex 4 to the Trade Licensing Act.
  • Vocational trades – a proof of professional competence is required for these trades. A full list of vocational trades is provided in Annex 1 to the Trade Licensing Act. Vocational trades are for example butchery and meat processing, bakery and confectionery, locksmith trade, masonry, and hairdressing.
  • Professional trades – these are activities such as running a driving school, hazardous waste management, tax counselling, and other activities the registration of which requires a proof of professional competence. A full list can be found in Annex 2 to the Trade Licensing Act.

Permitted trades

These are trades that often require a permit of a competent authority. Professional competence (and possibly a certain length of experience) may be required as well as other requirements such as clean criminal record of all persons carrying out the activity, etc. A full list of permitted trades can be found in Annex 3 to the Trade Licensing Act. These include for example road motor freight transport, running a travel agency, property and people security services, etc.

Where to get a trade licence?

You can notify a trade or apply for the permission to trade in person at any trade department of Prague city district offices. These trade departments can also be found under the name of Central Registration Points (CRP / in Czech CRP) as they allow you to notify the trade and to obtain a tax registration, inform the Czech Social Security Administration, the Labour Office and your health insurance company at the same time by filling out a Single Registration Form. Everything can be arranged by mail or online, too. You can also arrange a trade license through Czech POINT.

A trade license can also be arranged through a Point of Single Contact.

Contacts for the individual Trade Licensing Offices in Prague can be found on businessinfo.cz.

Instructions on how to obtain a trade licence (notify a trade or apply for a permission to trade) are available on the website of the Ministry of Industry and Trade’s Guide to Licensed Trades. You will also find there a Guide for (not only Incipient) Entrepreneurs, which contains information on the basic legal requirements for starting and running a trade business.

Single Registration Form

The Single Registration Form is used by entrepreneurs to fulfil their reporting obligations when starting and in the course of running a trade business. It replaces different types of forms that entrepreneurs have to submit before starting a business and in the course of pursuing it, be it at the Trade Licensing Office, the Czech Social Administration, or the health insurance company. You can use this form to report changes in your data or to suspend the business.

Applications for tax registration and notification of changes to registration data at trade licensing offices can be submitted only using forms issued by the Ministry of Finance.

An application for the creation and submission of the electronic Single Registration Form and forms of the Ministry of Finance can be found on the website of the Trade Business Register. The Trade Business Register is a public register and it is used to look up individual entrepreneurs and their data.

The easiest way of arranging a trade license is therefore to start with filling out the Single Registration Form. It can even be used for multiple registrations and notifications. Thanks to that, you can establish a trade business and notify the health insurance company and the social security administration at the same time.

For more information about the Single Registration Form and all notifications that can be submitted through it, see the website of the Ministry of Industry and Trade.