Types of Business Licenses: What Type of License Do You Need, and What Are the Requirements?

Quick overview:

How do you figure out what type of business license you need?

First, clearly define the specific activity you will actually be performing. Then compare it with the appendices to the Trade Licensing Act: skilled trades are listed in Appendix 1, regulated trades in Appendix 2, licensed trades in Appendix 3, and unregulated trades in Appendix 4. If your activity is governed by a specific legal regulation, it may not be considered a trade at all.

Not sure which trade category your business falls under or whether you need a concession? Contact us, and our attorneys will help you assess the legal requirements for your business and avoid starting an activity without the necessary authorization.

What Is a Trade?

A trade is defined as“a systematic activity carried out independently, in one’s own name, at one’s own risk, for the purpose of making a profit, and under the conditions set forth in the Trade Licensing Act.” It is therefore a form of business in which the tradesperson works for themselves. They have no employer and do not enjoy the benefits or face the drawbacks associated with employment, such as clearly defined work schedules, the right to take vacation, and so on. Being self-employed also means that the sole proprietor bears the full risks of their business. If a sole proprietorship is operated by a natural person, we commonly refer to them as a sole proprietor or a self-employed person ( OSVČ ). However, a legal entity, such as a limited liability company, may also hold a trade license.

In addition to doing business as a self-employed individual, you can also operate through a business entity, typically a limited liability company ( s.r.o.). A company can be established by one or more shareholders, and unlike a self-employed individual , it is a separate legal entity. As a rule, the shareholders of a s.r.o. are not personally liable for the company’s debts to the full extent of their personal assets—under the Business Corporations Act, they are jointly and severally liable only up to the amount of their unpaid capital contributions as recorded in the Commercial Register. However, establishing and operating a s.r.o. involves more administrative work than running a business as a self-employed individual.

Legal Framework for Trade Licenses

Trades are primarily regulated by the Trade Licensing Act. In addition to the trades themselves , their establishment, and the conditions governing them, the Trade Licensing Act also regulates, for example, business premises and other related matters. It also contains provisions regarding trade inspections and potential violations. Last but not least, it also regulates the Trade Register. On July 1, 2026, another amendment took effect, which, among other things, revised the conditions for regulated trades in the field of psychological counseling, diagnostics, and counseling psychotherapy. When determining a specific trade, it is therefore always advisable to refer to the current versions of the annexes to the Trade Licensing Act.

If you wish to search for business entities, you can use the online Trade License Register. Another good option for finding information about trade licensing offices and business owners themselves is the ARES Trade Register, which consolidates information from a total of 14 different registers of business entities.

What are the requirements for obtaining a trade license?

The basic requirements for obtaining a trade license for a natural person are full legal capacity and a clean criminal record. For certain types of trades, professional or other specific qualifications are also required—such as required education, work experience, certifications, or other conditions specified in the Trade Licensing Act.

For unregulated trades, no special professional qualifications are required. For skilled trades and regulated trades, however, you must provide proof of such qualifications in the manner prescribed by law. For concession-based trades, an application for a concession must also be filed, and authorization is granted only after a final decision by the trade licensing office.

Most common mistake: An entrepreneur only discovers when registering a trade that an ID card alone is not sufficient for the chosen activity, but that they must also provide proof of education or work experience. If you do not personally meet the professional qualification requirements, appointing a responsible representative may be a solution in some cases.

What are the types of trades?

Under the Trade Licensing Act, trades are divided into two basic groups: registration-only trades and concession-based trades. Registration-only trades are further classified as unrestricted, skilled trades, and restricted trades.

1) Registration-Only Business

To start a registration-only trade, you simply need to file a registration with the trade licensing office. It is not necessary to obtain special permits from other authorities, which simplifies the entire process of starting a business. Compared to licensed trades, this type of trade is also less regulated, although in certain cases specific requirements regarding professional education or experience may apply. Notifiable trades are divided into three further groups:

Unrestricted Trade

This is the least regulated form of business. No special professional qualifications or experience are required to operate it. To register a free trade, you need only legal capacity and good character. However, a clean criminal record is not a necessary requirement. In this case, it depends on what is listed in your criminal record. The biggest obstacle may be criminal offenses related to your past business activities, such as embezzlement.

To start a free trade, all you need to do is file a notification with the appropriate trade licensing office. Examples of free trades include most business services and certain other services, such as various types of consulting.

List of unregulated trades: where can you find it?

If you’re looking for a list of unregulated trades, it’s good to know that, from a legal standpoint, it’s actually a single unregulated trade called “Manufacturing, trade, and services not listed in Annexes 1 through 3 of the Trade Licensing Act.” This is further subdivided into individual fields of activity. You can find the current list in Annex 4 of the Trade Licensing Act.

This includes, for example, a large portion of consulting, commercial, manufacturing, and administrative activities. When you register, you’ll select the specific fields you’ll actually be engaged in. If you later need to add another field within the same unrestricted trade, you won’t need to obtain a completely new unrestricted trade.

Skilled Trade

The requirements for a craft trade include the need for a certificate proving that you are qualified to perform this activity. Therefore, you will usually need to provide proof of your education or retraining. If you do not have education in the field, you can still provide proof of education in a related field plus at least one year of practical experience in the chosen field, or six years of practical experience in the chosen field.

If you have neither experience nor education, don’t despair. There is still the option of a responsible representative. This is a person who has the necessary education and experience in the field and will vouch for you. This means they will supervise your work and provide you with feedback. Examples of skilled trades include activities such as carpentry, hairdressing, or plumbing.

Licensed Trade

Like skilled trades, regulated trades involve activities for which specific requirements regarding professional education, practical experience, or other qualifications apply. However, these trades also pose a potential risk to the health, safety, or property of customers. Therefore, to operate such businesses, it is necessary to meet certain predetermined conditions, which can be found in Annex No. 2 of the Trade Licensing Act. Most commonly, these include various certificates from the relevant ministries, a longer period of practical experience, entries in various registers, and so on. Examples of regulated trades include operating a driving school, real estate brokerage, or the activities of accounting advisors, bookkeeping, and tax record-keeping.

2) Licensed Trade

A concession-based trade is a type of trade that cannot be established simply by filing a notification. The entrepreneur must apply to the Trade Licensing Office for a concession—that is, a special permit issued by the relevant authority— and must meet both the general and any specific conditions established for the particular activity. The Trade Licensing Office will then assess whether the legal requirements are met; in some cases, another government agency may also review the application. Specific requirements can be found in Annex No. 3 of the Trade Licensing Act.

A concession is required because concession-based trades are typically activities that can have a significant impact on health, safety, the environment, or the public interest (e.g., road motor transport, weapons manufacturing, or the operation of a private security service). Furthermore, operating a licensed trade is conditional not only on obtaining a license but also on complying with stricter rules and is more frequently subject to state oversight.

How do I determine what type of business license I need?

The decisive factor is always the actual nature of the activity you intend to perform. It is therefore not sufficient to simply describe your business in general terms, such as “consulting” or “services.” First, describe as precisely as possible what you will be providing to your clients, and then compare the activity with the individual annexes to the Trade Licensing Act.

In practice, you can proceed as follows:

1. Check whether it is even a trade at all. Some professions and activities are governed by their own laws.
2. Review Appendix No. 1 —it lists skilled trades.
3. Check Appendix No. 2 —it contains regulated trades.
4. Check Appendix No. 3 —it lists licensed trades.
5. If the activity does not fall into any of the previous categories, check the categories of unrestricted trades in Appendix No. 4.

If in doubt, it’s best to verify the classification before starting your business. Depending on its specific nature, the same service may fall under a different regulatory regime than its marketing name suggests.

Don’t want to risk choosing the wrong business activity? Describe to us what you plan to do, and our attorneys will help you determine what authorization you need for your business.

From experience: When choosing a trade category, it can be problematic to rely solely on the name of the service being offered. What matters is its actual content. Two activities that entrepreneurs commonly refer to as “consulting,” for example, may not automatically fall under the same trade category.

How do you obtain a business license (“business registration certificate”)?

Today, you don’t have to apply for a trade license in person. You can file a trade registration or apply for a license at any municipal trade licensing office, and you can also submit your application electronically, by mail, or through a Czech POINT location. You’ll need to bring the aforementioned ID card and, if applicable, proof of education or work experience. You will also need a completed standard registration form, and if you plan to have your business address outside your place of permanent residence, you will also need an extract from the real estate cadastre or a lease agreement.

When starting a businessfor the first time, the administrative fee for registering a trade or applying for a license is 1,000 CZK. Subsequent trade registrations or license applications cost 500 Kč. If you submit multiple registrations or applications at the same time, the fee is charged only once.

For a trade requiring only registration, the business license generally takes effect on the date of registration, provided you meet the legal requirements and the registration is free of defects. For a trade requiring a license, the license takes effect only on the date the decision to grant the license becomes final.

Why Do the Conditions Vary?

The different requirements for individual types of trades reflect the level of risk, expertise, and potential impact on the public that these trades entail. The regulation of these trades has several fundamental objectives:

• Consumer protection: One of the main reasons for establishing specific requirements for business operators is to protect consumers from substandard services and products. For trades that directly affect customers’ health, safety, or financial well-being (e.g., healthcare services, construction work), it is important to ensure that service providers are properly qualified and capable of adhering to strict standards.
• Safety and Health: Certain trades may pose a direct risk to public health and safety (e.g., handling chemicals, construction work, health care services). Regulation of these areas is therefore essential to ensure that these services are performed safely and in accordance with relevant standards and laws.
• Protection of the Public Interest and the Environment: Certain activities have the potential to negatively impact the environment or the public interest (e.g., mining operations, waste management). Regulations and requirements for obtaining permits or meeting specific conditions are therefore put in place to minimize these impacts.

Summary

In 2026, trades are divided into registration-only and licensed trades, with registration-only trades including unregulated, craft, and restricted trades. For unregulated trades, there is no need to demonstrate professional competence, while craft and regulated trades have additional qualification requirements. A licensed trade may be operated only after a license has been granted. The basic requirements for an individual to engage in business are full legal capacity and good character. If you are unsure which type of business you need, base your decision on the actual nature of your activities and compare them with the annexes to the Trade Licensing Act. When starting a business for the first time, the administrative fee is generally 1,000 CZK.