Czech trade licences / Zivnostensky Lists

A guide to getting a trade licence and what it covers

David Creighton

Written by David Creighton Published on 24.06.2005 09:56:23 (updated on 24.06.2005) Reading time: 7 minutes

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Introduction

There are several bases for residence in the Czech Republic, and one of these is carrying out business on a self-employed basis. If you intend to do this you should apply for a trade licence certificate (živnostenský list). If you have a certificate you will pay tax on the basis of a tax declaration (daňové přiznání). For legal purposes you will be regarded as a natural person (fyzická osoba) or legal person (právnická osoba).

Basic information
 
Act No 455/1991 (The Trade Licensing Act) defines the basis for the certificate. The document states your details and describes the particular business you provide. Certificates are issued by municipalities, specifically the trade licence office (živnostenský úřad or živnostenský odbor). The application is based on where you live, so if you live in Prague 10 you will apply at the Prague 10 trade licence office. The website www.statnisprava.cz has a list of all the municipalities in the Czech Republic.

Types of business

You can have a trade licence certificate for all types of work, and in some cases there is no requirement to show qualifications. However, in other situations you will need to prove you are qualified. It´s important therefore to speak to somebody at the relevant trade licence office about the work you will be carrying out. Ask a Czech who speaks English to go along with you if necessary.

Professions, trades and services are listed according to category. The staff at the trade licence office have the full list, and they will be able to advise you which category the work you are doing fits into. Remember that there is no ‘catch all´ trade licence, and you will have to apply for a separate certificate for each activity you are involved in.

Before submitting the application 

Before submitting the application you should bear in mind that you need to have an official place of work (místo podníkání), because this will go in the records, although you can carry out your business elsewhere. The place of work can be the flat or house where you live, or it can be an office.

Another thing you will need to obtain is a birth registration number (rodné číslo). There is much confusion about this requirement, with some people stating that foreigners do not need the number. However, under the law you are supposed to have one if you are resident here, and if you are an employee you should definitely have a birth registration number. You can apply for it at the relevant Foreigners´ Police office.

Obtaining the licence is a fairly straightforward process, although like everything in the Czech Republic there is a fair amount of paperwork involved. If you are an EU* citizen the conditions are slightly more advantageous.

Always bear in mind that the opening hours of Czech municipalities are not particularly user-friendly, and many offices are open to the public only on Monday and Wednesday. This means that you will have to do a bit more planning ahead when submitting your application, and the overall process will take longer.

Applying as an EU citizen 

The key requirements for the certificate are listed below. You may need to submit more material, depending on various factors, such as the type of work you will be doing. You should therefore discuss this with the trade licence office beforehand to ensure you know exactly what is required.

Bear in mind that you do not need to present a residence permit when submitting an application for a trade licence certificate.

You will need to prove that you have permission from the owner(s) of the place where you work to carry out business there. One way of doing this is to submit a sworn statement (čestné prohlášení) of the owner(s), and it must be notarised. If you own the property, then you need only submit an extract from the Land Register (see below). If you are submitting the sworn statement you will have to produce the description of your place of work (building) in the Land Register (výpis z katastru nemovitostí). This is to prove that the place actually exists. The Land Registry (katastrální úřad) will print out this entry for you, and a CZK 100 duty stamp (kolek) is needed. In Prague the Registry is located at Pod Sídlištěm 9/1800, 182 11, Praha 8; for other towns and cities see www.cuzk.cz.

You should also present a certificate of no criminal record from your country of origin or the EU state where you were staying before coming to the Czech Republic. Bear in mind that non-Czech documents need verification so you should check all the criminal record requirements with your embassy beforehand. You will also need a Czech certificate of no criminal record (výpis rejstříku trestů). It can be obtained from the Czech Supreme Court, at Soudní 1, 140 66, Prague 4. Take your passport, a sworn translation of your birth certificate, and CZK 50 for the duty stamp (kolek) required.

You should show that you have no outstanding tax payments: for that you will need a declaration from the financial office (finanční uřad) of the relevant municipality. In addition, you will need to prove that you do not have any outstanding social security payments, from the relevant social security administration (see www.cssz.cz). There is also an application form for the trade licence (in Czech only), and this can be filled in on the spot. If needed, you should also bring along any qualifications, such as a degree, translated into Czech by a court translator.

Bear in mind that none of the documents should be older than 90 days. You will need to pay a fee (this depends on the type of work, but for ordinary trade licences the fee is CZK 1000) at the trade licence office. The certificate should be ready in 15 days, but processing can take longer. If you are an EU citizen the trade licence certificate is valid for an indefinite period (neurčitá doba). You can apply for another certificate later on. As always, you should discuss the necessary paperwork with the trade licence office.

Applying as a non-EU citizen

The procedure for applying for a trade licence certificate as a non-EU citizen is basically the same as above, although you will need to present a residence permit. The procedure for obtaining the certificate of no criminal record is different for non-EU citizens, although domestic and Czech certificates are required. Bear in mind that non-Czech documents need verification so you should check all the criminal record requirements with your embassy beforehand.

Remember that you should apply for a new residence permit if you are an employee and intend to work entirely as a sole trader, because you are changing your basis for being in the Czech Republic.

If you are an employee but intend to work on the basis of a trade licence too, or vice versa, then you should contact the Foreigners´ Police immediately to make the necessary arrangements.

The trade licence should be renewed when you renew your residence permit.

IČO and DIČ

Once you have the certificate you should obtain a tax identification number (daňové identifikační číslo) immediately. It is issued by the finance office of the relevant municipality. The identification number is basically the same as the birth registration number – your date of birth and an additional four digits.

You will also need the eight-digit registration number (identifikační číslo). This will be automatically included on your trade licence if you are an EU citizen. If you are a non-EU citizen you are required to have your trade licence registered at the local Commercial Court (Obchodní soud) and pay a fee for this.

Moving home

Whether you´re an EU citizen or not, if you move to an area under the administration of a different municipality you should inform the Foreigners´ Police, the relevant trade licence offices and the Commercial Court (if applicable) within a certain period. 

Getting a company to help you 

You may want to save time and potential hassle in obtaining your trade licence certificate by having a company arrange the application process for you. If time is a key issue then using a company may be a good idea, although the application process is not, on the whole, too complicated. If you pay a company to help you then it will arrange power of attorney and everything will be taken out of your hands. One company that provides help in obtaining the certificate is Relocation Management International (www.relocation.cz).

Trade licence or company?

The trade licence certificate is particularly useful if you are thinking about setting up in the country independently and offering a particular service. It´s fairly cheap to apply for a certificate, and the paperwork involved is not too difficult. If you set up a limited liability company (s.r.o. or společnost s ručeným omezeným), you can buy property and have it registered under the company name. However, setting up such a firm is quite expensive, and time-consuming.

*Citizens of the European Economic Area and Switzerland have the same rights as EU citizens when applying for a trade licence certificate.

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