Running a business from home is easier and more widespread than ever thanks to modern technology and the internet. Many people crave freedom, flexibility and the ability to be their own boss. But how do you go about it the right way so that you don’t get discouraged by complicated administration right from the start? And how to avoid breaking the law?
Thinking of starting a business from scratch, and a home-based business seems like a good option? It may or may not be. Either way, if you can turn your ideas into reality, there are plenty of benefits waiting for you. You don’t have to pay rent for business premises, you don’t waste time commuting, and you don’t have to deal with the complications of running a business. What’s more, you work at your own pace and in an environment that you can tailor to suit you.
Of course, running a business from home has its own rules – especially legal and tax rules. If you underestimate them, you could be in for a nasty surprise later on in the form of a fine or a denial of your permit application.
Many people have a dream of starting their own business, but they don’t know where and how to start. They are often scared of legal and administrative issues, uncertainty about choosing the right business and fear of failure. But the truth is that almost anyone can start a business from scratch, even without a lot of start-up capital. All it takes is the right motivation, a plan and courage. And running a business from home can be the first step to building a successful business. So how do you go about it?
Before you dive into setting up a business, you should think about what you actually know and what you enjoy. The ideal business idea usually comes from the intersection of what you know, what you enjoy and what has market value. So write down what you are good at, what you are really good at, what experience you have behind you and how you could help others with it. It can be anything – writing, coding, baking, creating, woodworking, tutoring and consulting across disciplines.
Even a home-based business should start with at least a little research. Find out who your target audience is, what they need, how much they are willing to pay, and who your competition is. Make a simple business plan to clarify what you are selling, to whom, how, for how much and at what cost.
Thanks to our business lawyer service, you no longer have to worry about whether you have well-written terms and conditions and whether you have left anything out of the cooperation agreement. We will handle the legal areas related to your business so that you can fully concentrate on your business.
In most cases, a free trade, typically “manufacturing, trade and services not elsewhere classified”, is ideal for a home-based business. This does not require any professional qualifications, you just need to be self-employed and have good character. However, if you are planning to start a business on a larger scale, with more responsibility or additional partners, it may be advantageous for you to set up a limited liability company. The advantage of a sole proprietorship is the low administrative and financial burden. An LLC will in turn make you appear more serious when appearing before clients.
Once you’ve chosen your form of business, there’s an administrative round. First you need to register your trade, which you can do in person at the relevant trade office or online via the Trade Business Portal. In the case of a free trade, all you need is basic personal information and payment of the administrative fee. The fee is currently CZK 1,000. You also need to register with the tax office within 15 days of starting your business. As a self-employed person, you are obliged to make advance payments for health and social insurance, so don’t forget to report your business to the health insurance company and the Social Insurance Institution. If your business qualifies, you can use the flat-rate tax regime – this will simplify your accounting and tax payments considerably.
Although at first glance it may seem that running a business from home is completely unrestricted, Czech law contains some important rules that you must follow. They are primarily aimed at protecting public order, safety and the rights of other residents (for example, neighbours in an apartment building). If you break these rules, you risk not only a hefty fine but also having to stop your business.
Legally, you can run your business from virtually any location – your apartment, house, cottage or even your garage. However, it is crucial that you do not violate the building code, your lease or the rights of others. For example, if you set up a warehouse in your flat where customers and couriers will be moving around, this could already be considered a change of use of the building, for which you will need approval from the building authority. The same applies to noisy or overly aromatic businesses (e.g. cosmetics, candle making, etc.).
The Trade Licensing Act considers any place where an entrepreneur carries out business activities and which is marked (e.g. by name, opening hours, etc.) to be an establishment. This means that even a home-based business can be an establishment, in which case you are obliged to report the establishment to the Trade Licensing Office.
An exception may be a so-called “place of business”, i.e. an address where the entrepreneur is based and where he or she only administratively manages the business without physical contact with customers. This type of business is common for freelancers, copywriters, IT specialists or graphic designers.
Tip: Supplier-customer relationships arise in every purchase and sale. They affect you more or less on a daily basis. If you want to start a business from home, read on to learn what to look out for in supplier-customer relationships.
If you are not the owner of the property where you want to have your business, then you need the owner’s consent to operate your business. At the same time, if you live in an apartment and your business may have an impact on the common areas (frequent movement of strangers, delivery of goods), then consent from the unit owners’ association may also be required.
If you run a business that involves food, cosmetics, healthcare or working with chemicals, then hygiene standards and requirements will apply. Because even if you run your business from your home, you must comply with public health, occupational safety and environmental protection laws. For some activities, you must notify or discuss the conditions of operation with the county health department in advance.
While it may seem that running a business from home is simple and you don’t need legal support, there are many situations where you will appreciate professional legal help. For example, a lawyer will be useful for drafting your terms and conditions. You will need these if you are selling goods or services online. This is because properly drafted terms and conditions protect both you and your customers and must comply with both the Civil Code and the Consumer Protection Act.
As a freelancer and small business owner, you will often need to enter into a contract with your clients. Whether it’s a work contract, a service contract, an NDA (non-disclosure agreement), or a collaboration agreement. All of these contracts need to be clear, legally unambiguous and should protect your interests. We will be happy to help you draft them. Feel free to create a template contract that you can then use repeatedly.
And if you’re building your brand, perhaps as a creator, graphic designer, blogger or designer, we can help you register a trademark with the Industrial Property Office.
Tip: How to set up, register, mark and arrange an establishment? What does the law say about the establishment and how is it approved and authorized? Find out in our article.
If you want to start a business from home, first think about what you can do, what you enjoy and what has market value. Make a simple business plan and find out who your target audience is, what their competition is and how much they are willing to pay. In most cases, you’ll need a free trade – for example, ‘manufacturing, trade and services not elsewhere classified’ – which can be registered online or in person at the trade office. Within 15 days of starting your business, you must register with the tax office and notify the health insurance company and the Social Security Office. You can run your business from home as long as you do not violate the building code, your lease or the rights of your neighbours – for example, by making too much noise or moving customers around too often. If you set up an establishment (a designated place of business) at home, you must report it to the trade licensing authority. In some cases, you will need the consent of the property owner or the owners’ association. If you are in the food, cosmetics or chemical business, hygiene standards apply. A lawyer can help you with terms and conditions, contracts and trademark registration.
We will provide you with an experienced lawyer for your business. Whether you need his help on a spur-of-the-moment basis, or even for a whole year, he will always be there for you. When you order, you only pay the price for the first month of service, and payment is made at monthly intervals thereafter.
Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 10 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.
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