Trade licence

In order to operate business in trade, the enterprising individual or legal entity must obtain a trade licence for the activity in question. The trade licence is certified by an extract from the Register of Trades, a trade certificate or a trade permit certificate. 

When selecting and defining the object of business for an unqualified trade, it is no longer sufficient to state only “manufacturing, trade and services not specified in Annex 1, 2 and 3 to the Trade Licencing Act”. In a recent judgement of 12 May 2021, File No. 27 Cdo 3549/2020, the Supreme Court concluded that the company’s object of business “manufacturing, trade and services not specified in Annex 1, 2 and 3 to the Trade Licencing Act” does not meet the requirements of certainty as the object of business of the company is not stated clearly. Therefore, in addition to the object of business, entrepreneurs must define at least one of the fields of activity that fall under this trade.

The fee for the first registration of a trade at the Trade Licence Office or the application for a concession amounts to CZK 1,000. In the case of registration of another trade or application for another concession, the fee is CZK 500. The Trade Licence Office will make an entry in the Register of Trades within 5 days from the date of submission of the application and will subsequently notify the applicant.

For notifiable trades, a trade licence is established by notifying the Trade Licence Office; for concessions, by an administrative decision to grant a concession. 

Notifiable trade

A notifiable trade is established by notification to the Trade Licence Office and is certified by an extract from the Register of Trades. Notifiable trades include:

• unqualified trades – no special conditions are required, it is the trade described as “manufacturing, trade and services not specified in Annex 1, 2 and 3 to the Trade Licencing Act”, which includes specific fields of activity, such as wholesale and resale or photographic services; a specific field of activity must be selected (see above)
• vocational trades – a condition for obtaining and operating a trade is professional competence in a specific field, i.e. a certificate of apprenticeship, secondary-school leaving exam, diploma or practice (or a combination thereof); these include fields such as bricklaying, tinsmithing and vehicle body repair, catering services, installation, etc.
• professional trades – a condition for obtaining and operating a trade is the demonstration of professional competence according to the requirements of the Trade Licensing Act. If the entrepreneur is not sufficiently qualified for the chosen object of business, the trade may be operated through a responsible representative; however, a responsible representative may be appointed for a maximum of four entrepreneurs. These include fields such as running a driving school or bookkeeping.

Permitted trade

A permitted trade is established on the basis of an administrative decision to grant a concession and is also certified by an extract from the Register of Trades. In addition to professional competence, a condition for obtaining a trade is also a positive opinion of the relevant state administration authority, which the authority assumes within 30 days of the application. A permitted trade can also be operated through a responsible representative. It includes, for example, operating a travel agency or operating road motor transport.

What issues do we typically handle for clients in relation to a trade licence?

• What are the conditions for establishing a trade?
• How to establish a trade?
• How to obtain a trade licence?
• How to properly define a trade to meet the requirement of certainty?
• What is the fee for notifying a trade?
• What is the difference between a notifiable and permitted trade?
• What are the types of notifiable trades?
• Tax obligations of traders
• Termination or suspension of trade
• Assistance in communication with other authorities – Czech Social Security Administration, health insurance companies