The Czech Republic is one of the best countries in Europe to be registered as a freelancer in terms of tax benefits. In a recent post, we highlighted the main advantages and disadvantages of being a freelancer. If, after weighing up the pros and cons, you’ve decided that working as a freelancer could be just your cup of tea, and you want to do so in the Czech Republic, here’s a step-by-step guide to getting your trade license or Živnostenský list.
How to get a trade license (Živnostenský list) in the Czech Republic
What documents do I need?
To be eligible for a trade license in the Czech Republic, the first thing you need to do is make sure you have all the required documents. Here’s a list of everything you’ll need to submit:
- Your valid passport;
- If you have a temporary residence card (Potvrzení o přechodném pobytu na území) bring it with you as you might be asked to show it. If not, we’d suggest you bring a copy of your rental agreement as you might need it to prove that you’re living in the Czech Republic;
- A business address (sídlo). If you own a property, then you can use your own place of residence as the business address. But if you’re renting an apartment, which is often the case for expats, you have two different possibilities:
- If your landlord agrees, you can use your home address as your business address. Your landlord will just have to fill out and sign the agreement form (Souhlas s umíštěním sídla), and have his/her signature verified in a CzechPoint. This is a fairly simple process that can be done in most Post Offices and costs around CZK 30. Then you’d be all set. This option is easy and free but, unfortunately, many landlords won’t give permission, so you’ll have to go for the second alternative below.
- You can get what is usually referred to as a ‘virtual business address’. Locus Workspace offers this as a service. You can find more information about our sídlo pricing and terms here.
- A copy of your criminal records issued by your country of origin along with a certified translation to Czech language. This is not always necessary, but we suggest you bring it with you just in case. Like that, you’ll avoid having to return to the Trade Office just because you’re missing a document.
Where to register?
Once you have all the documents listed above, you need to go to a Trade Office to apply for the trade license. These trade offices are known as ‘Úřad živnostenský’ and there is usually one at each Town Hall. Unless you’re fluent in Czech, we strongly recommend you go with someone who speaks the language. Otherwise, the employees at the Trade Office might just refuse to make all the arrangements for you if you can’t communicate with them in their native language. One of the things they will ask about is what type of business activity you will be performing. Note that for some professions, such as Accounting, you’ll be required to show your university degree or academic certificates. You can find the list of all the business activities that don’t require any specific certificates here.
After submitting and having all your documents verified, they will ask you to pay the CZK 1,000 fee. You can pay it on the spot with either card or cash.
It usually takes around one week for them to process your application and issue your permit. You will then have to visit the Trade Office again and collect your license. The document will look similar to the one in the picture below.
Great! I already have my Živnostenský list! I am all set now, right? Well, not exactly. We’re sorry to tell you that you’re not quite done with Czech bureaucracy yet. Keep reading to find out what the next steps are.
What to do after getting your Živnostenský list
Getting your Živnostenský list is just the first step out of four in order to complete your registration and be able to work as a freelancer in the Czech Republic. Next up is income tax, Social Security and Health Insurance registration. You can find all the steps you’ll need to follow below.
Income tax registration
For income tax registration, you’ll need to fill out the Přihláška k registraci pro fyzické osoby document and submit it to any Finanční úřad (there is one in each municipality in cities like Prague and Brno). If you’re lucky, they might process your registration immediately, but this is usually not the case. If not processed immediately, then you’ll receive a letter confirming your registration – Rozhodnutí o registraci – (usually sent to the address where you have your sídlo) within 30 days.
Social Security registration
Once your tax registration has been approved, the next step is to get your social security ID number. You’ll need to submit your papers to the Správy Sociálního Zabezpečení office (if you’re registering in Prague, the main office is on Biskupská 1752/7, 110 02 Praha 1). Make sure to bring your ID, your trade license and your Rozhodnutí o registraci.
Czech citizens usually receive their social security number right away, but foreigners are given a special number. Therefore, the registration process can take up to 30 days. Once the agency concludes the process, you’ll receive a letter that includes the following information:
- The monthly fee that needs to be paid.
- The bank account where the money needs to be transferred.
- Your variabilní symbol or variable symbol. This is how the Social Security Office identifies you. So when making the bank transfer, make sure to include this number in the ‘variable symbol’ field, so they know it’s you.
Monthly payments need to be made before the end of the current month (i.e. if you’re paying for the month of May, then you need to transfer the money by May 31st at the latest).
After receiving the letter with all this information, you can proceed to the last step!
Health Insurance registration
You’re almost done! Now head to the health insurance company. Všeobecná zdravotní pojišťovna (VZP) is what most foreigners use. There are several offices around Prague and one in the center of Brno. Make sure to bring your ID, your trade license and your Social Security number.
The agency processes your registration right away, and just like with Social Security, you’ll get a document with the following information:
- The monthly fee that needs to be paid.
- The bank account where the money needs to be transferred.
- Your variable symbol that you’ll need to include when making the bank transfer.
As with Social Security contributions, it is necessary to make the monthly payments by the last day of the month.
Congratulations! You’re now a freelancer! As you can see, it can be a very long and tedious process, especially if you don’t speak Czech. That’s why we strongly recommend you hire the services of a native financial advisor. Locus grants all its members access to a knowledge bank of useful contacts (such as advisors or legal translators) that can help you with the entire process. So if you’re considering becoming a freelancer in Prague, need tips for setting it all up and would like to meet fellow expat freelancers, Locus Workspace might just be the right place for you.
