As a foreigner you are allowed to conduct trade activities in the Czech Republic under the same conditions and to the same extent as Czech entrepreneurs. But what are your options? There are two main ways how to start conducting a business in the Czech Republic. The first one is through a trade license which is this post mainly about. The second one is through setting up a company on which we will focus in our next posts.
You should know that there are four different legal forms of companies. But those most common are limited liability companies („s.r.o.“) and joint-stock companies („a.s.“). There are also two other forms, a limited partnership („k.s.“) and a general commercial partnership („v.o.s.“) but these are not used very often. In the next posts we will introduce the „s.r.o.“ and „a.s.“ to you in detail. Also the European forms of legal entities (European Economic Interest Grouping; European Company; European Cooperative Society) are entitled to operate in the Czech Republic. You may found or co-found a new company or you can also join an existing Czech company.
What is a trade license?
Another form of conducting business is as a freelance worker under a trade license (called “živnostenský list” in Czech). If you are an independent worker, this might be easy and effective solution for you because acquiring a trade license is not too complicated. The trade license is suitable for many professionals, such as teachers or entrepreneurs.
If you decide to become a freelance worker and conduct business under a trade license, you should be aware that you will be liable without limitation and you have to do business under your own full name (to which you might attach some differentiating trade name).
What do you need to apply for a trade license?
There are different categories of trades. The most common are free trades (“volné živnosti”), others are regulated. Those regulated require proof of higher education (such as interpreters, medical professionals, etc.). To apply for a trade license, you will need to fill the application with the trade license regulator (“živnostenský úřad”). You will need to fill in a registration form (downloadable from the internet) which will include your personal details, place of residence and place of business and list of selected trades. You must also submit together with this form a proof of legal residency; a foreign criminal record extract or affidavit confirming you have no criminal record (depending on your country of origin as some countries like USA do not have criminal registers); permission of the owner for your place of business and trade license selection form. If you are applying for regulated trade license, you need to submit also a proof of your qualification. Don´t forget to enclose a fee stamp of 1.000 CZK per trade license.
Do you have further questions on trade license? Please do not hesitate to contact us.