One option for people wanting to work in the Czech Republic is to get a trade license or Živnostenský list. The definition of “trading” here means you are carrying on an activity (work,) doing it independently, in your own name with the purpose of making a profit. This differs from an s.r.o. in that if something goes wrong, you are protected by your limited liability status. With a Živnostenský list, it´s all you. For the most part, securing a trade license is fairly straight forward, and thanks to some new laws that came into effect July 1, 2008 – it´s a bit clearer, and cheaper.
If looking to do this process on your own, it is best if you speak Czech or can bring along a Czech speaking person to help you. Alternatively, hire someone to do it for you. Nora Vindušková is the managing partner for Assistance2Expats, a firm that does just that. We asked her for some additional information on how to go about getting your Živnostenský list.
She says your first stop should be the trade license office in city hall. Previously, you had to go to “your” district (i.e., you live in Prague 4, you had to go to the Prague 4 municipal office) to take care of business, but the new changes say you can now apply at any trade license office in the city. Here, you can chat with the people who will be processing your application, pick up any needed forms, and do a walk through of the process before you get started. In a typical bureaucratic way -documents, signatures, stamps, etc. may differ from office to office. Checking first will save you time and headaches.
Documents you need to have are fairly similar to what you need for other legal papers, like a long-term visa. You´ll need to have a clean criminal record from your home country, as well as from any other country in which you have legally lived. You also need a signed statement from your landlord that you can use your home address for business purposes. There is no official form for this, just get your landlord to sign something stating this and have it notarized. Alternatively, if your lease says it is okay to do business at the address, you can use that. And don´t forget to get the land registry form that says the person who is your landlord is the legal owner of the building or flat in which you are renting. If you plan on applying for a Živnostenský list, it is best to get the okay from a potential landlord first.
Two important things to remember: All documents not in Czech must be officially translated into Czech and legalized and nothing must be older than 90 days.
Depending on what you are getting your Živnostenský list for, you may need to show proof of education or professional experience. A big improvement that came into play with the new law is that you now only need one trade license (based on a list that can be found at the trade license office.) Previously, depending what you wanted to do, you may have had to buy two, three, four or more licenses – all at 1000CZK a pop. Now, for 1000CZK you´ll receive a “certificate of incorporation” which will be one document listing all your licensed areas.
If you are using a Živnostenský list as your legal purpose of stay in which to apply for a long-term visa, you will need to get the paperwork going here first. After your application has been approved (usually only takes 1-2 weeks,) you will receive a statement to that affect which you can then submit with your visa application. You have 180 days after your Živnostenský list application has been approved in order to get your visa.
The next step is different for EU and non-EU citizens. Basically, if you are EU, you don´t need to do this. Non-EU citizens (after receiving their visa) must register at the business court. First you will bring your visa back to the trade license office and then receive documents to bring with you to the business court. This is where you´ll get you so-called IČO, which is basically your business number. You will need to go back to the trade license office with your IČO – this part of the procedure is usually the most confusing and time-consuming, so make sure you receive clear instructions from both administrators on what needs to be done next.
After you have registered at the business court (or for EU citizens, after you have received your trade license) there are two more very important steps. Before you start doing business you must register at the tax office to receive your so-called DIČ, or tax i.d. number. You then must also register at the social security office and pay social taxes every month. Here, you will receive another number, as well as payment slips in which you must pay your social fees. The amount is set by law and there is a minimum amount. The fee you pay is based on your income, so after your first year in business it may go up or down.
And don´t forget about taxes! The accounting year here is January to December, and taxes are due by March 31 every year. Vindušková highly recommends employing an accountant, or at the very least hiring someone to do your taxes for you.
Vindušková says getting your Živnostenský list is much easier than, for example, getting your long-term residence permit. She says the rules are clearer, the trade license office isn´t difficult and the people there are nice and helpful.
This information should only be used as a guide. As with all legal procedures, if you are unsure about something or have an unusual situation, it is best to discuss it with a qualified person or lawyer. And don´t forget, every situation is different, so what works for one person may not be the case for someone else. For more information you can consult the City of Prague´s website (www.praha.eu, which also lists trade license office addresses;) the Ministry of Finance (www.mfcr.cz ) or the Ministry of Industry and Commerce (www.mpo.cz )