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Conditions for submitting a trade declaration and an application for a license

 

Conditions for submitting a trade declaration and an application for a license by a natural person with a permanent address outside the Czech Republic (a foreign physical entity) who is a citizen of a European Union or EEA member state or a citizen of Switzerland.

 
 
A physical entity with a permanent address outside the Czech Republic (“a foreign physical entity”) can operate a trade in the Czech Republic under the same conditions and to the same extent as a Czech citizen, unless the Small Business Act or a special act stipulates otherwise.

According to Art. 5 Par. 5 of the Small Business Act, a foreign physical entity who is a citizen of a European Union member state or a citizen of a member state to the European Economic Area Treaty or the Swiss Confederation is not required to present a residency permit certificate for the Czech Republic to the Trade Licensing Office when declaring a trade. A physical entity granted asylum in the Czech Republic according to special regulations can operate a trade under the same conditions as a citizen of the Czech Republic with a permanent address in the Czech Republic.

Conditions for operating a trade

The general conditions for operating a trade by physical entities are as follows:
  • Minimum age of 18 years;
  • Competence to perform legal acts; 
  • Impeccable character; 
  • Presenting a certificate of no tax arrears in the case of physical entities that have transacted or transact business in the Czech Republic; this certificate can be obtained from the territorially competent Revenue Authority;
  • Presenting a certificate of no arrears in social security payments and contributions to the state’s employment policy in the case of physical entities that have transacted or transact business in the Czech Republic; this certificate can be obtained from the relevant Social Security Administration.

Operating a free trade is only conditional upon meeting the general conditions, while operating a craft, regulated or licensed trade is additionally conditional upon meeting the special regulations for operating a trade, i.e. professional or other competence.

Professional competence for operating craft trades is shown by:

  • A vocational certificate from the relevant three-year vocational training or a different certificate of completion of the relevant three-year vocational training and a certificate of at least three years' experience in the particular field
  • A certificate of completion of the relevant study course shorter than four years at a vocational secondary school and a certificate of at least three years' experience in the particular field
  • A certificate of a graduation exam within the relevant study course at a vocational secondary school, vocational training center or grammar school with vocational preparation subjects and a certificate of at least two years' experience in the particular field
  • A diploma, certificate or other document proving the completion of a bachelor's or master's study course run by a university in the relevant field of study and a certificate of at least one year's experience in the particular field
  • DA certificate of recognition of a professional qualification issued by a recognition authority (Ministry of Industry and Trade) according to the act on recognizing professional qualifications
  • Citizens of European Union member states (including citizens of other member states of the European Economic Area Treaty and citizens of Switzerland) can prove their professional competence for trades listed in Art. 21, Par. 2 of the Small Business Act also by relevant documents according to the act on recognizing professional qualifications.
Certificates of professional competence (as stated above) may be substituted by:
  • A vocational certificate from a related three-year vocational training or a different certificate of completion of a related three-year vocational training or a related study course and a certificate of at least four years' experience in the particular field
  • A certificate of completion of a related study course shorter than four years at a vocational secondary school and a certificate of at least four years' experience in the particular field
  • A certificate of a graduation exam within a related study course at a vocational secondary school or a vocational training center and a certificate of at least three years' experience in the particular field
  • A diploma, certificate or other document proving the completion of a bachelor's or master's study course run by a university in a related field of study and a certificate of at least one year's experience in the particular field
  • A certificate of re-training or a different certificate of professional qualification issued by an institution accredited by the Ministry of Education, Youth and Sports or a ministry competent for the field of the relevant trade and a certificate of at least four years' experience in the particular field
  • A certificate of passing a qualification exam before a committee comprising representatives of the relevant Trade Licensing Office, the relevant vocational secondary school or vocational training center and the relevant trade association, if this association exists, and a certificate of at least four years' experience in the particular field
  • A certificate of at least six years' experience in the particular field
Professional competence for regulated trades is regulated by special rules stipulated in Schedule No. 2 of the Small Business Act or determined by this schedule. If Schedule No. 2 defines professional competence as the completion of a vocational training course within the relevant field or the completion of secondary education and passing a graduation exam, meeting the condition on education can also be proven by a certificate of retraining according to Article 22, Par. 1, letter e) of the Small Business Act and a certificate of four years' experience within the relevant field. Citizens of European Union member states (including citizens of other member states of the European Economic Area Treaty and citizens of Switzerland) and citizens of the Czech Republic can prove their professional competence by a certificate of recognition of a professional qualification issued by the recognition authority (Ministry of Industry and Trade) according to the act on recognizing professional qualifications. These people can also prove their professional competence by certificates of professional qualification according to the act on recognizing professional qualifications proving the professional qualifications stipulated for individual trades in Schedule No. 2 of the Small Business Act.

Professional competence for licensed trades is regulated by special rules stipulated in Schedule No. 3 of the Small Business Act or determined by this schedule. If Schedule No. 3 of the Small Business Act defines professional competence as the completion of a vocational training course within the relevant field or the completion of secondary education and passing a graduation exam, meeting the condition on education can also be proven by a certificate of re-training according to Art. 22, Par. 1, letter e) of the Small Business Act and a certificate of four years' experience in the relevant field. Citizens of European Union member states can prove their professional competence by a certificate of recognition of a professional qualification issued by the recognition authority (Ministry of Industry and Trade) according to the act on recognizing professional qualifications. These persons can also prove their professional competence by certificates of professional qualification according to the act on recognizing professional qualifications proving the professional qualifications stipulated for individual trades in Schedule No. 3 of the Small Business Act. The Trade Licensing Office determines or modifies the conditions for operating a trade for the relevant entrepreneur according to the Small Business Act or according to special regulations.

How to declare a trade or apply for a license

A declaration or an application for a license can be submitted in person at the relevant local Trade Licensing Office or sent to this office by post.

To which Trade Licensing Office a declaration or an application for a license should be submitted

If a declaration or an application is submitted by a foreign physical entity that does not intend to establish an organizational unit of its enterprise in the Czech Republic to transact business, this foreign entity submits its declaration to the competent Trade Licensing Office according to the place of permitted residence in the Czech Republic, or (if the competence cannot be determined in this manner) according to the place of business in the Czech Republic.

If a declaration or an application is submitted by a foreign physical entity that intends to establish an organizational unit of its enterprise in the Czech Republic to transact business, this foreign entity submits its declaration to the competent Trade Licensing Office according to the place of the organizational unit of the enterprise in the Czech Republic.

Documents submitted to the Trade Licensing Office

  • A declaration of a trade or application for a licensed trade (completed in advance or directly at the Trade Licensing Office).
  • An extract from the criminal record or an equivalent document issued by the relevant judicial or state body of this state or the member state of the last place of residence. If the relevant state does not issue this type of a document, the physical entity submits a declaration of an impeccable character made before a notary public or a body of the relevant member state according to the citizenship of the physical entity, or before a notary public or a body of the member state of the last place of residence (not older than three months). This document can be substituted by a certificate of professional qualification according to the act on recognizing professional qualifications proving that the condition of an impeccable character has been met. If a responsible representative is appointed, an extract from the criminal record or a different aforementioned document proving the representative’s impeccable character if the responsible representative is a citizen of a European Union member state or a citizen of a member state of the European Economic Area Treaty or the Swiss Confederation, otherwise an extract from the Criminal Register.
  • A declaration by the responsible representative (if a representative is appointed) of accepting the appointment and duties to the extent determined by the Small Business Act, identifying the entrepreneurs appointing the responsible representative; the signature attached to this statutory declaration must be officially attested, unless the responsible representative signs the declaration in person at the Trade Licensing Office.
  • An extract from the Commercial Register not older than three months, if the relevant physical entity is recorded in the Commercial Register.
  • A certificate of no tax arrears if the relevant physical entity has transacted or transacts business in the Czech Republic. This document must not be older than three months.
  • A certificate of no arrears in social security payments and contributions to the state’s employment policy if the relevant physical entity has transacted or transacts business in the Czech Republic. This document must not be older than three months.
  • A certificate of professional competence of the entrepreneur or their responsible representative for craft, regulated or licensed trades.
  • A certificate of the right of use or a similar right to the buildings or premises of the place of business, if different from the applicant’s residence (if the applicant intends to establish an organizational unit of the enterprise, the same documents for the organizational unit must be submitted).
  • If an organizational unit of the enterprise is established in the Czech Republic, a document proving that the applicant has an enterprise outside the Czech Republic must also be submitted.
  • A certificate of the payment of the CZK 1,000 administrative fee for each declared trade (the fee for an industrial trade operated is CZK 10,000). A certificate of the payment of the CZK 2,000 administrative fee for each licensed trade (the fee for an industrial trade operated is CZK 20,000)
  • If the entrepreneur intends to operate an industrial trade, documents proving the operation of an industrial trade must be submitted.
  • If the relevant Trade Licensing Office has no doubts about the accuracy of the translation or the authenticity of a signature or a seal, the documents presented, if not issued in Czech, do not need to be officially translated into Czech (i.e. by an interpreter listed in the register of experts and interpreters)

Necessary forms

The “Declaration of a Trade” or an “Application for a License” forms for foreign physical entities that are citizens of a European Union or EEA member state or citizens of Switzerland can be obtained from any Trade Licensing Office or are freely available on the Internet.

Physical entities state mainly the following details on the forms for the declaration of a trade or an application for a license:
  • Name and surname, optionally also the commercial company if the relevant physical entity has been recorded in the Commercial Register
  • Citizenship
  • Personal identification number, if this number has been allocated, otherwise the date of birth
  • Declaration of whether a court or an administrative body has prohibited the activities of the relevant physical entity or whether a different impediment to operating a trade exists, whether a trade licende for the relevant physical entity has been canceled during the past three years (according to Art. 58, Par. 2, 3 or 4 of the Small Business Act)
  • If the trade is operated through a responsible representative, details about this person are stated (name and surname, citizenship, place of residence, personal identification number, if allocated, otherwise the date of birth, declaration of whether a court or an administrative body has prohibited the activities of the representative or whether a different impediment to operating a trade exists, whether a trade license of this physical entity has been canceled during the past three years).
  • Permanent address outside the Czech Republic, place of residence in the Czech Republic (if a residency permit has been granted), location of the organizational unit of the enterprise in the Czech Republic (name of the town, part of the town, street name, description and reference number, if applicable, postcode) and details about the head of the organizational unit of the enterprise (name and surname; citizenship; place of residence; personal ID number, if allocated, otherwise the date of birth; declaration of whether a court or an administrative body has prohibited the activities of this person or whether a different impediment to operating a trade exists; whether this person’s trade license has been canceled during the past three years).
  • Subject of the enterprise
  • Place of business
  • ID number, if this number has been allocated 
  • Business premises where the trade operation will commence immediately after the origination of a trade license
  • Date of commencing the trade operation, if different from the date of the trade license origination
  • Date of terminating the trade operation if the physical entity intends to operate the trade for a definite period of time
  • Information on whether the relevant physical entity intends to operate an industrial trade

Time limits for issuing a trade certificate or making a decision on granting a license and issuing a license deed

The Trade Licensing Office is obliged to issue a trade certificate within 15 days after receiving a declaration, unless the entrepreneur failed to meet the conditions determined by the Small Business Act or an impediment to operating a trade persists.
Unless Schedule No. 3 of the Small Business Act stipulates otherwise, the Trade Licensing Office decides on a granting a licence within 60 days after the date of filing the application. If the Trade Licensing Office makes a decision on granting a license, it issues a license deed to the entrepreneur within 15 days of the legal effect of the decision on granting a license.

What to do after getting trade license
  • Register with your locally relevant tax administrator (Revenue Authority – within 30 days of acquiring the trade license)
  • Register yourself and your employees with the locally relevant social security administration (within eight days)
  • Register yourself and your employees with the selected health insurance company (within eight days)
  • Register your employees for compulsory accident insurance (if you employ at least one employee)

Contact information for the trade licensing offices in the City of Prague and the individual regions of the Czech Republic are available on the server www.mvcr.cz/reforma

Procedure of the Trade Licensing Office after a declaration of a trade or an application for a license has been submitted

If a declaration does not have all the particulars, the Trade Licensing Office requests the entrepreneur to correct the faults within 15 days. The request specifies a reasonable time for correcting these faults; the minimum time limit is 15 days. The time limit for issuing a trade certificate does not run during the period specified in the request. If serious reasons exist, the Trade Licensing Office may prolong the time limit repeatedly upon the entrepreneur’s request. If the entrepreneur corrects the detected faults within the determined or prolonged time limit, the declaration is deemed correct from the start. If the entrepreneur fails to correct the detected faults within the determined time limit, the Trade Licensing Office commences proceedings and decides that the trade license did not originate when the declaration was submitted or decides that the trade license did not originate, or that the applicant failed to meet the conditions for the origination of a trade license. If the applicant corrects the faults during the course of the proceedings and the Trade Licensing Office concludes that all the conditions for originating a trade license have been met, the Trade Licensing Office closes the proceedings by issuing the trade certificate.

If an application for a license does not have all the particulars, the Trade Licensing Office requests the entrepreneur to correct the faults within 30 days of receiving the application. The request specifies a reasonable time for correcting these faults; the minimum time limit is 15 days. If serious reasons exist, the Trade Licensing Office may prolong the time limit repeatedly upon the entrepreneur’s request. The time limit for issuing a decision on granting a license does not run during the period specified in the request. If the entrepreneur corrects the detected faults within the determined or prolonged time limit, the Trade Licensing Office commences processing the application. If the entrepreneur fails to correct the detected faults within the relevant time limit, the Trade Licensing Office discontinues the proceedings (or if the entrepreneur fails to meet the relevant conditions, the Trade Licensing Office rejects the application for a license).

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Added: 26.12.2009
 
 
 

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