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Doing business without a trade licence

photo:  (sxc.hu)

If a natural entity wishes to perform a trade in the Czech Republic on a permanent basis, he/she must hold a trade licence. However, this does not apply to cases when the trade is performed on a one-off basis or is regulated by another specific law. The conditions and rules governing business in the Czech Republic are laid down in Act No. 455/1991 Coll., the Trade Act.

This law clearly defines, inter alia, the business activities which require the trade licence and those which do not. The Czech Republic’s law does not consider, for example, the following activities to be a trade and, therefore, they do not require a trade licence:
  • Agricultural production, forest and water management
  • Activities performed by freelance authors – governed by the author act. These include: writers, actors, musicians, artists, cultural heritage preservers, journalists etc.
  • Activities whose performance is governed by other acts. These include highly specialised activities, most of which require completed university education and state examination, such as physicians, dentists, pharmacists, veterinary doctors, psychotherapists, healers, auditors, tax advisors, notaries, distrainers, stock exchange brokers, bankruptcy administrators, experts, interpreters, architects, authorised civil engineers, surveyors etc.
  • The term of trade further excludes e.g. activities performed by banks, exchange offices, insurance companies, insurance brokers and insurance liquidators, pension funds, savings and credit cooperatives, commodity exchanges, security brokers, job mediation agencies, radio and television broadcasters etc.
The full list of activities which are not considered trades and, therefore, do not require a trade licence is defined in X1 Section 3 of Act No. 455/1991 Coll. X1.

The trade licence does not need to be held by an entrepreneur who performs an activity which is normally subjected to the trade act on a one-off basis. However, it must be noted that if the entrepreneur performs such an activity in the same time every year, he/she meets the condition of performing the business on a permanent basis and must have a trade licence.
Author: Ivana Jenerálová
Added: 03.04.2011

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