Doing business in the Czech Doing business in the Czech RepublicRepublic

BUSINESS (self-employed) OR EMPLOYMENT?

Entrepreneur/businessman (živnostník/podnikatel) = Self-employed

(osoba samostatně výdělečně činná)

Business activity = continuous activities carried out independently, under one’s own name and at one’s own responsibility to achieve a profit 

Trade license = „živnostenské oprávnění" does not have to mean "small business", you can have a turnover of millions and even employ own employees; you can have trade license and be employee at the same time, or put it on hold while you're employee

2 types of business

1/ Entrepreneur (živnostník), Self-employed (osoba samostatně výdělečně činná)

2/ Legal personality, limited liability company, etc.

Whatever type of business you choose, you will be responsible for tax payment, health and social insurance payment

4 types of trade licenses

• independent (unconditioned) • dependent (conditioned)

• craft (conditioned)

• concession (conditioned)

Trade license can never be issued for the following business:

• Agriculture production; forest and water management

• Author’s fees and IP rights

• Independent jobs (writers, actors, musicians)

• Business done and regulated according to special state regulation and usualy preconditioned by state exams for example, tax advisors, lawyers, executors, brokers, interpreters, healers, etc.

Starting your business• Register your business with the Trade license office

(živnostenský úřad) for which you need:• Passport, residence permit, copy of criminal record

from criminal register (from the Czech Republic and from the country of origin), business address, 1000 CZK administration fee

• Register business at the Financial office (finanční úřad) for tax purposes and tax specific number (DIČ)

• Register with the Social Security Administration• Once registering at Trade license office you can tick

an option for the Trade license to register you at all the other necessary offices on your behalf

Financial office - taxes

• You are obliged by law to register your business with the Financial office (finační úřad) for which you need trade license copy, bank account, residency permit

• Every year you need to hand it tax return form by 31st March

• Tax return form is obligatory for every license holder

• If your yearly income exceeds 30 000 CZK, you will be required to pay monthly tax down payment in the next year

• Tax = 15%

• Any changes in business must be registered within 15 days

Financial office - taxes• a/ tax register – you pay tax from real costs (i.e. you account for

real expenditure proven by bills, invoices, etc.)• b/ you pay tax from costs which are measured by pre-set flat

rate calculated from percentage of income, which is very convenient and favourable

• Therefore there are over 2 300 000 trade license holders in the Czech republic

• Taxable income differs according to type of trade license • 80 % craftsmen and agriculture• 60 % other entrepreneurs except craftsmen and agriculture• 40 % special work

Social insurance • Pension insurance contribution is compulsory• Sickness insurance – not compulsory (covers costs connected with

loss of income during illness or pregnancy, it is NOT health insurance)

• Social insurance – compulsory• Down payments for 2013 = 1890 CZK/month

• Income below 62121 CZK requires no down payment

• One month after handing in tax return form one must hand in social insurance overview to Social Security Administration

• If you do not pay, you will have debt for which you can be sued by the state administration

• All changes must be registered by the 8th day of next month • Social Security Administration is obliged to share changes with the

Ministry of Interior and its foreigner department

Health insuranceType of health insurance depends on type of residency permit:

1. Permanent resident, employee, family member of EU resident, holder of tolerance visa, asylum, subsidiary protection public insurance from General health care insurance, minimum 1748,- CZK/month

2. Temporary resident – private insurance min 1 200 CZK/month covering the whole period of residency; private insurance companies: Slavia, Maxima, PVZP, Uniqua, Ergo

•All changes must be registered within 8 days

If you want to pro-long your long term temporary residency for the purpose of business (done at Ministry of Interior)

1. Green form;

2. Passport;

3. Trade license;

4. Financial office stamp that you are debt free;

5. Social Security Administration that you are debt free;

6. Enough financial resources – copy of your tax return form, or 3 months old bank account statements, income slips

7. Proof of accommodation ;

8. Proof of private health insurance;

9. Administration fee 2500 CZK

Minimum income

You have to prove that your income exceeds or equals to the minimum income of all members of the household:

3410 for the individual

3140 for 1st person

2830 for next person above 15 years of age

2450 for a child between 15 – 26 years of age

2140 for a I child between 6 – 15 years of age

1740 for a child up to 6 years

Accomodation

Regulated accommodation costs set by law (rent + other costs such as electricity, gas, water)

7068 individual

10144 two persons living in household

13813 three persons living in household

17269 four and more persons living in household

- If you own you own apartment, obligatory accommodation costs are lower – real costs

Proving your obligations

* Prove income from tax return form

* Ministry of Interior may control purpose and reasons of your residency

* You must be legal resident in the Czech republic for minimum 2 year

http://www.businessinfo.cz/cz/

http://jakpodnikat.cz/

http://www.podnikatel.cz/

http://portal.gov.cz

http://www.mesec.cz/

http://www.migrace.com/

poradna@refug.cz

Thank you for your attention!

Have a great weekend!

duba@refug.cz

trochtova@refug.cz

poradna@refug.cz