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Start your self-employed business in Czech Republic as a foreigner

by | Oct 1, 2022 | Corporate Structuring

self-employed business in Czech Republic as a foreigner – Luxembourg

From the perspective of the Czech Republic authorities, any self-sufficient, free and independent activity, including a business enterprise, is referred to entirely as “self-employment”. Self-employment comes with a lot of benefits such as having full control over every aspect of the company, deciding what the company does, and being able to choose the branding elements that make the business special.

You relocate to Czech Republic to start your business

Are you planning to move to the Czech Republic and would you love to do business there? Would you like to try entrepreneurship and select the simplest path (self-employment) in Czech Republic ? 

If so, a logical opportunity for registration as a self-employed individual is to come to the Czech Republic for another purpose (studies, work, family reunion, etc)

You can then begin your business directly in the Czech Republic, and if necessary, you could change the purpose of your long-term residence approval for business purposes.

Registering self-employment for foreigners in the Czech Republic

Self-employment is presently the most prominent form of business in the Czech Republic. There are various reasons why that is so, such as simple administration, no need for bookkeeping, and low startup costs. 

As a foreigner, the procedure of getting self-employed in Czech Republic might look difficult. But with your Damalion expert by your side, it’ll be pretty straightforward. 

Next are some of the requirements:

Firstly, you will need an address, which you can use as your business office. You do not have to rent an office, as you can use the address where you presently live. However, you will need to get the consent of the owner.

Alternatively, if you own a property in Czech Republic, you won’t need to ask for any permissions. And if you do not have any address that you could use, you can rent a virtual office from a specialized company.

Be a self-employed entrepreneur

Being self-employed is a business of a natural individual, so the Trade Office requires registration to verify your stay permission in the Czech Republic. 

Also, you need an extract from the penalty register from the country of origin (which could be ordered at your embassy). But If you are an EU citizen or a foreigner with permanent residence in the Czech Republic you are not required to provide the extract from your criminal record.

The Czech Republic Trade Office permits self-employment for foreigners with long-term residence only for the period time of their residence permit. This implies that the foreigner has to extend the self-employed status each year after the receipt of a new visa.

If you would like to know more about self-employment in the Czech Republic, contact your Damalion expert now. 

Damalion – Luxembourg

Start your self-employed business in the Czech Republic (OSVČ) as a foreigner — who can apply, documents, trade licence types, registration steps, taxes, social and health, VAT rules, timelines, and costs.

For EU/EEA/Swiss and non-EU founders, freelancers, consultants, and small businesses • Damalion helps you prepare a clear file and coordinate providers. Decisions remain with the authorities and banks.

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What helps your OSVČ registration go smoothly?

Use simple, consistent information. Prepare proof of identity, legal stay (if required), consent to use a business address, and a clean criminal record where requested. Explain what you will do, where clients are, expected income range, and whether you will be VAT-registered. Keep copies ready in Czech or with certified translations where needed.

Documents most offices expect

  • Valid passport/ID.
  • Proof of legal stay if you are a non-EU/EEA/Swiss national (long-term visa or residence for business, or other title that allows business).
  • Proof of business address in Czechia (owner’s consent or lease; virtual office is possible when allowed).
  • Criminal record extract from your home country or previous residence if requested (with apostille/verification and certified translation when required).
  • Professional eligibility for regulated/craft activities (if applicable).
  • Single Registration Form (JRF/CRP) for Trade Licensing Office, Tax Office, Social Security (ČSSZ) and health insurer.

Trade licence types at a glance

Type Examples Key notes
Free (unqualified) Business support, marketing, consulting, IT services. General conditions: age 18, legal capacity, good repute.
Craft (qualified) Carpentry, hairdressing, masonry. Requires proof of vocational training or practice.
Regulated (qualified) Accounting, real estate brokerage, transport, security. Specific education, practice, or licence; proof required.
Concession Travel agency, road freight transport, firearm trade. Individual permission (concession decision) is issued.

Registration — clear, simple steps

  1. Choose activity and address. Pick the correct trade type and secure consent to use your address.
  2. Prepare papers. ID, stay permit (if needed), address consent, criminal record where required, proof of qualification for craft/regulated trades.
  3. File the Single Registration Form. Submit at any Trade Licensing Office (CRP) or via Data Box. You receive your IČO after entry in the register.
  4. Open and use your Data Box. Self-employed persons must use a data box for official communication.
  5. Notify authorities after start. Register with your health insurer and ČSSZ and the Tax Office within the statutory deadlines. Set tax method (actual costs, % expenses, or flat tax bands).
  6. Issue compliant invoices and keep records. Keep income/expense records; add VAT items when registered.

Costs and timelines

  • Trade licence fee: typically CZK 1,000 for first free trade notification; fees apply for additional or regulated activities.
  • Flat tax (optional): three monthly bands (Band I CZK 8,716; Band II CZK 16,745; Band III CZK 27,139 in 2025), subject to conditions.
  • Minimum health advance for OSVČ in 2025: CZK 3,143/month (public health insurance); social advances vary by status and period.
  • VAT: standard rate 21%; reduced 12% for selected goods/services. Compulsory registration follows 2025 rules (see FAQ).
  • Typical timeline: a few days to a few weeks depending on documents, residency, and trade type.

Frequently asked questions

1) Who can run a sole trade (OSVČ) in Czechia?
Adults (18+) with legal capacity and good repute. EU/EEA/Swiss citizens may operate if they meet trade law conditions. Third-country nationals must also hold a visa or residence permit that allows business.
2) Do I need a residence permit before filing?
EU/EEA/Swiss citizens do not need a residence permit to notify a free trade. Third-country nationals usually submit a preliminary filing, then bring the residence permit within the legal time limit so the licence becomes effective.
3) What is the Single Registration Form (JRF/CRP)?
A unified form used to notify the Trade Licensing Office and to register with the Tax Office, Social Security (ČSSZ) and a health insurer. It can be filed in person, by post, or electronically via Data Box.
4) Is a Data Box mandatory?
Yes. Since 2023, all self-employed persons must use a Data Box for official e-communication.
5) What address can I use?
Your residence address or a virtual office if allowed. The property owner’s written consent is needed unless you own the premises.
6) When do I notify authorities after starting?
Notify your health insurer and ČSSZ promptly after start (statutory deadlines apply) and keep your tax and insurance records in order. Electronic filing is widely required.
7) Which activities are “free”, “craft”, “regulated”, or “concession”?
Free trades cover a wide range of services without special qualifications. Craft and regulated trades need specific education or practice. Concessions require an individual permit.
8) Do I need a criminal record extract?
It can be required, mainly for certain regulated or concession trades and for some foreigners. Use official extracts with apostille/verification and certified Czech translations where the law requires.
9) What income tax rates apply outside the flat tax?
Personal income tax is typically 15% up to a statutory base and 23% above that base. You may use actual costs or flat-rate expense percentages if eligible.
10) What is the flat tax (paušální daň) in 2025?
An optional scheme with three fixed monthly bands that include income tax, social, and health advances (Band I CZK 8,716; Band II CZK 16,745; Band III CZK 27,139) if conditions are met.
11) Minimum health insurance advance in 2025?
CZK 3,143 per month for self-employed in the public health system. Actual annual settlement depends on income.
12) Social insurance advances and relief?
Monthly advances depend on your assessment base and whether the activity is main or secondary. From 2025, relief applies for new businesses in the first years under current rules; check current ČSSZ guidance.
13) VAT rates and when to register in 2025?
Standard VAT is 21%; a 12% reduced rate applies to selected items. Mandatory registration uses a two-threshold system in 2025: the annual CZK 2,000,000 threshold (with start-of-next-year registration) and a higher threshold CZK 2,536,500 triggering immediate registration after it is exceeded.
14) Can I register for VAT voluntarily?
Yes. Voluntary registration is possible before reaching the threshold, for example to reclaim input VAT or to work with VAT-registered clients.
15) Invoicing and records?
Invoices must meet Czech rules. Keep income and expense records (or simplified accounting where required). If VAT-registered, include VAT details and submit VAT returns on time.
16) Do I need a Czech bank account?
It is practical for payments to authorities and clients, and may be required by some partners. Banks will run standard KYC checks.
17) What about translations and apostilles?
Use certified translations into Czech when the authority requires it. Public documents from abroad may need apostille or higher verification depending on the country.
18) Can family members work with me?
Family help is possible under Czech law, but you must follow tax and insurance rules and register employees or cooperating persons correctly.
19) How do I change, suspend, or restart a trade?
Notify the Trade Licensing Office (and other authorities via JRF if needed) of changes, suspension, or restart. Changes must be reported within statutory time limits.
20) How long is the trade licence valid?
For EU/EEA/Swiss citizens, it is generally open-ended unless revoked. For third-country nationals, validity is tied to the residence title. Renew residence in time to avoid expiry.

 

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