In this article, you will learn what entrepreneurship is and how to start your own business in the Czech Republic. Where to obtain the necessary permits for it (most commonly, the trade license), what conditions you must meet to obtain it, and who to contact in case you have questions or need assistance with your business.
What is entrepreneurship
It is a systematic activity carried out independently by an individual, in their own name, and at their own risk, with the aim of making a profit. This means you work for yourself, you have no employer or supervisor who assigns work or decides on the projects you work on. You are also responsible for providing all necessary work equipment yourself.
Švarc system
It is very important that you are able to recognize differences between employment and entrepreneurship-and what is most important not to get into conflict with the law. It is illegal to work exclusively for one customer, and formally act as an independent entrepreneur, even though you will be performing ordinary employee activities for them. This practice is called the švarc system and is illegal in the Czech Republic. If you are performing services only for one company (meaning you work full time for them) you need to have employment contract with them- otherwise this kind of work relationship is illegal. More importantly, you are not protected by law, you do not have the right to vacation or sick leave, and need to cover your own health and social insurance.
You Can Do Business As
- A natural person - authorities use the term "self-employed person (OSVČ)" for such entrepreneurs. In most cases, you will need a trade license to start doing business like this (more on this below). Less common are so-called liberal professions (such as doctors, lawyers, actors, etc.), which are subject to different rules, and a trade license is not a requirement. Information about liberal professions can be found on the Metropole of All website, and specific procedures are available on the Businessinfo.cz website in the Overview of Business Activities,
- A legal entity - this means that you started your own company. If you are interested in this option, it is recommended to consult with a lawyer who specializes in this area.
How can you get a trade license?
Business activities are governed by the Trade Licensing Act. If you are a holder of temporary protection or international protection, you can work in the Czech Republic under the same conditions and to the same extent as Czech citizens. There are two types of trade licenses:
1. Notification-based, which can be activated based on a notification to the trade office. As the name suggests, to obtain a trade license of this category, you need to meet the conditions for the type of trade you are applying for, and submit the notification to the trade office. Notification-based trades are divided into:
- Free trades (e.g., you need to fill the basic conditions - 18 years old and a clean criminal record - see below). You can find more information here.
- Craft trades (e.g., butchery, masonry, plumbing, cosmetic services) - you need to prove certain professional qualifications (e.g., a vocational certificate, high school diploma, or another document recognizing professional qualifications). Find more information here,
- Professional trade (e.g., massage services, accounting), you must demonstrate the relevant education or experience in the field. You can find more information here,
2. Regulated trades (you can find examples here) - which require the consent of the relevant state administration authority - so-called concession.
Basic conditions for trade licensing are:
- Age 18 - full legal capacity,
- Clean criminal record (extract from the Ukrainian criminal record, which can be obtained from the Ukrainian Embassy in the Czech Republic),
- Professional qualifications, if required (e.g., proof of vocational training, high school diploma, or a document recognizing professional qualifications).
How to Obtain a Trade License
If you meet the above conditions and want to start a business, you can follow these 3 steps:
1. Apply for a trade license at any trade office or at a Czech point for a trade license (in colloquial terms, you might hear "živnosťák"). You can notify your trade or apply for a concession using a single registration form,
2. Inform your health insurance company and the District Social Security Administration that you have started a business since you will regularly pay health and social security contributions as an entrepreneur,
3. You will also need to submit an application for registration for natural persons to the tax office.
More detailed information can be found in the article on entrepreneur's duties and how to communicate with authorities.
Contacts for Individual Trade Offices can be found on the businessinfo.cz website. This website is operated directly by the Ministry of Industry and Trade and provides verified information about business activities, including in English.
When submitting the trade license application, make sure to attach:
- Proof of professional qualifications (education and experience), if required according to the type of trade being registered,
- Proof of the legal right to use the premises where you will have your business (a written declaration from the property owner where your business premises are located, confirming their consent),
- Extract from the criminal record,
- Proof of receiving temporary protection or international protection.
What is the cost of the application?
The administrative fee for registering a trade or applying for a concession is CZK 1,000. In the case of notified trades, the trade office will register the trade in the trade register within 5 working days of receiving the notification and issue a certificate to the entrepreneur. For regulated trades, all requirements must be assessed, and a decision must be made before issuing a concession.
Where to Find Additional Information and Assistance?
Detailed information about doing business in Ukrainian can be found on the Metropole of All website in the Business section.
Unified Contact Points
Do you have questions about doing business in the Czech Republic or in the European Union? Contact advisory and assistance offices established by the state - Unified Contact Points. They will respond to your inquiries free of charge within 30 days and also help you with obtaining business permits. You can contact them with your inquiries electronically as well.
Have You Started a Business? Read the article on Entrepreneur's Duties.
Information Sources:
- Metropole of All - Business for Foreigners in the Czech Republic
- Official Business Guide - businessinfo.cz
- Ministry of Industry and Trade - mpo.cz