Logo Advokátní kancelář roku 2023

Five steps to easily set up a business

Do you want to become independent at work and adapt your work pace to your needs? Are you planning to work in an industry where employment is almost impossible? Are you looking for some extra income? In all these cases, a trade licence may be useful. And in our guide, you’ll find out how to set up a trade in five easy steps.

živnostník provozující živnost brašnářství
7 minutes of reading

Chapters of the article

Step One: Make it clear which group your business falls into

As a prospective sole trader, you will be primarily concerned with the Trade Licensing Act. This sets out the rules for trade business, but also defines what is not a trade (e.g. doctors, veterinarians or notaries are not trades, nor are securities dealers or real estate rental). These activities are usually regulated by special laws. On the other hand, you will need a trade licence to set up and run a restaurant, a café or a cake shop, a driving school or a private school.

In general, trades are divided into two groups – licensed (for which you must first obtain a licence – e.g. taxi service) and notifiable. Reportable trades include craft trades , tied trades and free trades. For the first two, i.e. craft and bound trades, in addition to the general conditions, there is also a condition of professional competence, while no professional competence is required for free trades.

What does this mean for self-employed persons?

The term Self-employed person is often mentioned in connection with obtaining a trade, i.e. a person who earns income from a business or other independent activity. Sometimes the term freelancer is now also used. However, this is not quite the same as a sole trader, although they often overlap. Self-employed is a broader term that includes just those business people who do not need a trade licence to carry out their profession.

Do you know how to set up a cooperation agreement with a business partner?

We guarantee that your cooperation will be legally free of ambiguities, unnecessary risks and hidden loopholes. We will draw up a bulletproof contract tailored to your business.

Step two: secure potential collaborators

As we mentioned above, the law distinguishes three types of reporting trades and sets out different conditions for establishing each of them, which must be met. The easiest route is to operate a sole proprietorship. An example of this is animal husbandry. To engage in it, you don’t need to have special training or certification under the law. All you need to do this is to be self-empowered and of good character.

However, there are also craft trades and related trades for which you need to meet other conditions, in particular professional competence. This varies from trade to trade, and the law may require you to have, for example, an apprenticeship certificate in the trade, a secondary or higher education with a specific focus, or recognition of a professional qualification issued by an authorised body.

If you lack the necessary education or experience, don’t panic. You can also practise your trade as a legal entity and the professional competence will be ensured by a responsible person. For some activities, it is really crucial not to engage in them with people who do not have the appropriate training or experience. You probably wouldn’t be happy if your sciatica was being corrected in a massage parlour by, say, a trained butcher with years of knowledge of animal anatomy. Similarly, a tattoo parlour, hairdressing salon, private nursery or pet shop should only employ people who are qualified to do so.

Tip: If you are interested in the advantages and disadvantages of being a legal entity versus a sole proprietorship, read our article.

Step Three: collect the necessary documents and establish the establishment

Prepare a valid ID card and CZK 1,000 for the trip to the office. You can also fill out the form you will need at the office in advance at home. Detailed information can be found on the website of the Ministry of Industry and Trade (single registration form | MPO).

You will operate your trade in your own premises. This may be your permanent residence, but if it is a different location, the trade office will also require proof of the legal reason for using such premises – so take with you a lease agreement or extract from the land registry.

What are the basic requirements for a trade licence?

To apply for a trade licence, you need to be fully competent (full legal capacity is acquired when you reach the age of 18, but even a minor can run a business in some cases – but you need the consent of your legal representatives and the permission of the guardianship court) and of good character (i.e. not to have been convicted in the past for a deliberate criminal offence committed intentionally in connection with the business or the business you are applying for or declaring), which can be proven by an extract from the Criminal Register (the trade licensing office will obtain this itself).

As already mentioned above, for certain activities it is also necessary to provide evidence of professional competence to carry out such a trade; you will then need to provide evidence of, for example, a certificate of education, experience, or authorisation to carry out the activity, and in some cases also the consent of another government authority.

Tip: If you have more irons in the fire and are also considering setting up an LLC, study everything you need to do so.

Step Four: Go to the office and pay everything you need

As we have already mentioned, the cost of setting up a trade or applying for a licence is currently CZK 1,000. You can pay it in person when you register your trade at the Trade Licensing Office or at Czech POINT or by postal order or bank transfer.

When filling in the form, think about what kind of business you will be involved in in the near future. Ideally, you should indicate all of them now. This will prevent you from paying fees in the future when you extend your business licence.

To apply for a trade licence, simply go to any municipal trade licensing office. A directory of trade offices can also be found on the website of the Ministry of Industry and Trade.

If you don’t want to queue at the office, you can start setting up a trade online. Simply fill in the Unified Registration Form and send it to the trade office’s electronic mailroom. However, you must sign the form with a recognised electronic signature or send it from your data box to the trade office’s data box.

Step five: keep an eye on your obligations and start your business

Be aware that after “setting up as a self-employed person” you have various obligations towards the state, in particular the obligation to pay health and social insurance, possibly also sickness insurance and, of course, to pay taxes and file tax returns. You must register with the relevant authorities(Czech Social Security Administration, Health Insurance Office, Tax Office) after obtaining a trade licence. The time limit for this registration is relatively short (8-15 days), but the notification obligation can also be fulfilled by filing the forms issued by the Ministry of Industry and Trade together with the declaration of trade or the application for a concession.

Since when can I operate a trade?

When you set up a trade, you obtain an ID number, i.e. Personal Identification Number, under which you are registered. The Trade Licensing Act knows trades that are only declared and then the right to operate the trade is already established on the day of declaration. If, however, you will be carrying out a trade for which you need a so-called concession, then you must wait until the decision to grant the concession becomes legally effective. You can then prove your trade licence by means of an extract from the trade register.

Tip: Unfortunately, not every business is successful or promising. If yours isn’t bringing you the joy, money, or anything else you originally expected, you may be considering shutting it down. What does it take legally, temporally and financially to dissolve a business license?

Are you solving a similar problem?

Dostupný advokát team of online lawyers will solve it for you.

Cooperation Agreement

Whether you need to draw up a new collaboration contract or review your current one, we’re here for you. We’ll make sure your business collaboration goes off without a hitch. We will handle everything for you, quickly and flawlessly. You can pay only after the service has been provided.

Preset Prices
All services pre-priced for no surprises.
We Do Everything Online
Save time, money and the hassle of travel.
We Work Fast
90 % of issues get solved by the following day.
Experienced Team
We have specialists for every field of law.

Has this content helped you? Give it a rating

No rating yet. Be first to rate and help others.

Article topic:

Author of the article

JUDr. Ondřej Preuss, Ph.D.

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.

  • Law, Ph.D, Pf UK in Prague
  • Law, L’université Nancy-II, Nancy
  • Law, Master’s degree (Mgr.), Pf UK in Prague
  • International Territorial Studies (Bc.), FSV UK in Prague

Reviews of the Dostupný advokát service

Recenze služby

Lucia Tóthová, Prague

before 3 years

We chose the premium package because it promised a fast reply within 24 hours, and we needed help quickly. A few hours after sending our order, Dostupný advokát called us. After discussing our issue and agreeing on the next steps, we felt confident in how the whole procedure would go since we had never experienced (zobrazit více) it before. We appreciate their patience.

Recenze služby

Zuzana Marková, Prague

before 3 years

We had terms and conditions drafted for our gym, and now we are very glad that we did so. Clear relationship rules are the basis for lasting friendships, and never more so than in the business world!

Recenze služby

Jan Sekanina, Prague

before 3 years

My grandparents wanted to give me an apartment, but I was extremely busy at the time and couldn’t afford to put any time into finding out what I needed to do. I also had no idea how to get the transfer of ownership handled at the Land Registry. Dostupný advokát arranged everything for me, and (zobrazit více) the apartment transfer was legally arranged with no issues. Thank you and thumbs up!

View All Testimonials

You could also be interested in

About us in public media
Logo Česká advokátní komora Logo Advokátní kancelář roku 2023
Follow the news
Facebook Dostupný advokát Twitter / X Dostupný advokát