Doing business without a trade license in Czech Republic

The Czech Czech Trade Licensing Act

According to the Czech Trade Licensing Act (Act No. 455/1991 Coll.), the business activity is conducted systematically, individually, using one's own name, on one's own responsibility, with a view to make profit and under the conditions laid down under this law. The different professions requiring a trade licence are listed in annexes 1- 4 of the Czech Trade Licensing Act. You can find general information in our article Steps for acquiring a Czech Trade Licence.

Trades are divided under the Czech Trades Licensing Act (Act No. 455/1991 Coll.) into notifiable trades (Czech Free Trade Licende with fields of activities), which can be obtained based on notification, and concession trades, which can only be pursued on the basis of a special business licence – a concession. Notifiable trades are categorised into three further groups: vocational, professional and unqualified.

Notifiable trades are characterised by the fact that the authorisation to trade becomes valid immediately at the very moment of notification (not later when the trade licence is issued).

To illustrate the various types of trade, here are a few examples. Trades categorised as vocational include carpentry, bakery and confectionary, bricklaying and plastering, brewing, etc. The complete list of vocational trades in the Czech Republic. Professional trades include activities such as providing or brokering consumer credit, work as an optician, or animals trading.

In order to acquire the concession for concessionary trades, it is necessary to demonstrate the relevant professional eligibility and in some cases to also meet some additional requirements. Trades that require concessions include operating a travel agency, road freight transport or a security firm employed to protect other people’s property.

Those interested in a Czech trade licence for a notifiable trade can obtain one by notifying the trade, while applicants for a concession can submit their application at one of the general Trade Offices – central registration points, by means of government administration contact points (Czech-Point) or do so electronically using the Trade Register web system. Trades are notified and applications for concessions are submitted using a standard registration form. Forms can be obtained at any trade office, and in most cases are freely available at the Ministry of Industry and Trade website for natural persons and for companies (forms must be completed in Czech).

List of activities that are not trades in Czech Republic

In the Section 3 of the Czech Trade Licensing Act you can find list of activities that are not trades. Paragraph 1 of this Section describes 5 activities and those are operation of an activity reserved by the act to the state or designated to legal person:

a) the performance of an activity statutorily reserved for the State or for a designated legal person,

b) the use of the results of intellectual creativity protected by specific laws, their originators or authors,

c) the collective administration of copyright and rights related to copyright in accordance with specific legislation,

d) the restoration of cultural monuments or parts thereof which are works of fine art or applied art,

e) the performance of archaeological research.

All these activities are adjusted by other acts especially all activities related to the copyright are adjusted by the Czech Act No. 121/2000 Coll., the Copyright Act.

Activity of natural persons within the scope of special acts in Czech Republic

Entrepreneurial activitities of natural persons within the scope of special Czech acts. Those are for example:

a) doctors, dental practitioners and pharmacists, paramedical workers in the provision of health services, and natural healers,

b) veterinary surgeons, other veterinary workers, including rendering workers and persons performing professional activities related to selection work and the breeding of livestock,

c) lawyers, notaries and patent attorneys and bailiffs,

d) court interpreters and court translators,

e) auditors and tax consultants,

f) stock jobbers,

g) mediators and arbitrators in collective bargaining disputes and arbitrators in property disputes,

h) officially licenced surveyors,

i) authorised architects and authorised engineers active in construction who engage in activities as freelance architects and freelance engineers,

j) authorised inspectors who engage in their activities as a liberal profession,

k) road safety auditors,

l) mediators registered under the Act on Mediation,

m) registered intermediaries under the Copyright Act.

Further, the following activities shall also not constitute a trade in Czech Republic:

a) banking activities, providers of payment services, issuing electronic money, operating payment systems with irrevocable settlement, currency exchange activities, the activities of providers of dynamic currency exchange services, the activities of insurance companies, security funds, insurance brokers or accredited persons according to the Act on Insurance and Reinsurance Distribution, pension funds, pension companies, savings and loans societies, commodities markets, organisers of regulated markets, securities traders and their bound representatives and the activities of persons involved in the management or administration of an investment fund or foreign investment fund and the activities of persons providing settlement of securities, the activities of persons accepting and giving instructions or investment advisory activities relating to investment tools under the conditions set form in a special Act and their bound representatives, and the activities of credit rating agencies, the activities of providers of reporting services, the activities of accredited persons according to the Act on Capital Market Undertaking, provision and intermediation of consumer credit and the activity of accredited persons under the Act on consumer credit,

b) operating games of chance,

c) mining and other activities using mining techniques,

d) the generation of electricity, the production of gas, the transmission of electricity, the transmission of gas, the distribution of electricity, the distribution of gas, the storage of gas, trade in electricity, trade in gas, the production of heat and the distribution of heat, which are subject to a licence under specific legislation and intermediary activities in the energy sectors,

e) agriculture, including sales of unprocessed agricultural products for the processing or resale thereof, with the exception of professional phytosanitary care,

f) sales of unprocessed plant and animal products from natural persons’ internal small-scale cultivation and breeding,

g) maritime shipping and sea fishing,

h) the operation of railways and rail transport,

i) the performance of communication activities in accordance with specific legislation,

j) research, production and distribution of medicinal products,

k) the handling of addictive substances, products containing them, and certain substances used in the production or processing of addictive substances under a specific law,

l) the activity of authorised or accredited persons and notified subjects in the field of state testing,

m) foreign trade in military material,

n) the performance of labour inspections,

o) radio and television broadcasting,

p) the offer or provision of services for the direct gratification of sexual needs,

r) the intermediation of employment,

s) the operation of technical inspection centres,

t) education and training in schools, preschool and educational establishments included in the register of schools and educational establishments, education in bachelor, master and doctoral studies, and lifelong learning programmes in accordance with specific legislation,

u) dealing with substances included in Schedule 1 of the Annex to the Convention on the Prohibition of the Development, Production, Stockpiling and Use of Chemical Weapons and on their Destruction,

v) the operation of airports, the operation of commercial air transport and aeronautical work, the provision of air services, activity of executive pilots and the provision of professional training in the field of protection of civil aviation against illegal acts and the operation of an unmanned system by the holder of a licence to operate unmanned systems or light unmanned systems in a specific category of operation,

x) the activities of organisations set up under specific legislation conducted in accordance with the purpose for which they were established,

y) child protection by legal and natural persons, if authorised to provide child protection under specific legislation,

z) the prospecting, exploration and production of mineral resources from and beneath the sea bed and the ocean bed beyond State territorial limits,

aa) the operation of cemeteries,

ab) the activities of authorised packaging companies in accordance with specific legislation,

ac) the handling of high-risk and risky biological agents and toxins,

ad) the operation of zoological gardens pursuant to a licence issued by the Ministry of the Environment,

ae) archiving,

af) the provision of social services in accordance with specific legislation,

ag) the activities of authorised persons entitled to verify professional competence required to obtain a certificate of a professional qualification under a specific law,

ah) the letting of property, residential and non-residential premises,

ai) providing of health services,

aj) the performance of professional plant health care activities in accordance with specific legislation,

ak) operation of postal services and foreign postal services pursuant to a special legal regulation,

al) performance of expert activities of experts, expert offices and expert institutes

am) activities of operators of collective schemes under the End-of-Life Products Act and the Act on limiting the environmental impact of selected plastic products

Regulation by other Czech acts

All activities listed in the Section 3 of the Czech Trade Licensing Act that are not trades are all regulated by other acts, it means that you do not need a trade license for you business in case of these activities but you still have to comply legal regulation. Acts often define other duties you have to fulfil. As an example according to the Copyright Act the collective manager must apply for an authorization to execute collective management. The Ministry of Culture then decides on the authorization. Another example is activity from paragraph 3 letter e) - agriculture, including the sale of unprocessed agricultural products for processing or resale unless it is the operation of professional activities in the field of phytosanitary care. Again you don´t need a trade license here but the Czech Act No. 252/1997 Coll., the Act on Agriculture, Section 2f determines duty to register if the farmer meets the conditions for the agricultural entrepreneur referred to in Section 2e.

For more information, please contact:

JUDr. Mojmír Ježek, Ph.D.

ECOVIS ježek, advokátní kancelář s.r.o.
Betlémské nám. 6
110 00 Prague 1
e-mail: mojmir.jezek@ecovislegal.cz
www.ecovislegal.cz/en

About ECOVIS ježek advokátní kancelář s.r.o.
The Czech law office in Prague ECOVIS ježek practices mainly in the area of Czech commercial law, Czech real estate law, representation at Czech courts, administrative bodies and arbitration courts, as well as Czech finance and banking law, and provides full-fledged advice in all areas, making it a suitable alternative for clients of international law offices. The international dimension of the Czech legal services provided is ensured through past experience and through co-operation with leading legal offices in most European countries, the US, and other jurisdictions. The Czech lawyers of the ECOVIS ježek team have many years of experience from leading international law offices and tax companies, in providing legal advice to multinational corporations, large Czech companies, but also to medium-sized companies and individual clients. For more information, go to www.ecovislegal.cz/en.