Notification of an unqualified trade by foreign legal persons (=> legal persons with their registered offices outside Czechia)
Legal persons with their registered offices outside Czechia intending to run a business in Czechia are legally required to set up a branch plant (“odštěpný závod”) here.
This does not apply to legal persons with their registered offices in one of the member states of the EU, EEA or Switzerland intending to provide services in Czechia temporarily or occasionally.
The branch plant of a foreign legal person must be registered in the commercial register and a natural person must be appointed as a head of the branch plant.
Why is a trade licence needed?
Persons wanting to run a business in Czechia are legally required to obtain a licence before they start (for exceptions see below).
Most business activities are ‘trades‘ (živnosti) which are licensed by trade licensing offices (živnostenské úřady).
The trade licence most frequently used is the licence for an ‘unqualified trade’ (volná živnost).
To obtain a licence for an unqualified trade, it is necessary to make a notification of the trade at the trade licensing office.
What is an unqualified trade and what is not?
In order to obtain a licence for an unqualified trade, no proof of professional competence is required.
Within the scope of an unqualified trade, the following activities may typically be carried out:
- intermediation in trade and services (except for intermediation of consumer credit or employment),
- wholesale and retail trade (except for purchase and sale of arms, toxic substances or spirits),
- manufacture of food products (except for manufacture of bakery and confectionery products, ice-creams, beer or preparation and sale of meals and drinks for immediate consumption in the facility in which they are sold),
- software services,
- advisory and consulting activities (except for tax and accounting advisory, legal advice or psychological counselling),
- design (except for construction design),
- translation and interpreting (except for activities of registered interpreters),
- teaching languages,
- bicycle courier services.
The areas/fields of activity pertaining to an unqualified trade are listed in Annex No. 4 of the Trade Licensing Act, detailed descriptions of each area’s content is to be found in Annex No. 4 of the Government Decree on the content of trades.
The activities mentioned in brackets and a number of others either fall within other trades where a proof of professional competence is a condition of getting the licence (e.g. catering services, building construction, sports coaching, massages or truck transport) or they are activities licensed by other authorities (e.g. health and social services, agriculture or generation of and trade in electricity).
No licence is required for:
- letting of property,
- use of the results of intellectual creativity (e.g. artists, journalists or authors of computer programs or databases),
- temporary or occasional (cross-border) provision of services by entrepreneurs from other EU member states.
If you need information on activities licensed by other authorities or on cross-border provision of services, you can learn more from our colleagues at the Point of Single Contact.
How to notify an unqualified trade
The easiest way to submit a notification is to visit any municipal trade licensing office in Czechia.
At the trade licensing office, an officer usually fills in the Single Registration Form electronically. Then the form is printed and the person making the notification (the notifier) checks and signs it.
What must be specified in the form?
- identification of the legal person,
- identification of its statutory bodies/directors including the date of their entry into office,
- name and address of its branch plant in Czechia.
What documents must be presented to the trade licensing office?
- a proof of identity (identity card, passport, residence permit card),
- an extract from the crime register or an equivalent document issued by the competent court or administrative authority of the legal person’s home country evidencing that the legal person is not subjected to any judicial or administrative punishment or sanction of the prohibition of activities relating to the carrying-on of a trade – must not be older than 3 months,
- an extract from the commercial or similar register kept in the legal person’s home country – must not be older than 3 months,
- a document proving the functioning of the enterprise abroad (contract, invoice, tax return, bank statement) – this does not apply to legal persons with their registered offices in one of the member states of the EU, EEA or Switzerland,
- no document proving a legal right to use the branch plant’s registered office (umístění odštěpného závodu) is needed, the notifier just specifies its address,
- a proof of payment of the administrative fee of 1 000 Czech crowns (CZK); after signing the form, the notifier pays the fee at the cash desk of the authority (by cash or card) and presents the receipt to the officer,
- a power of attorney if the notification is made by the notifier’s attorney.
Documents not issued in the Czech language (except for the proofs of identity) which are presented by legal persons with their registered offices in one of the member states of EU, EEA or Switzerland must be translated. An official translation (choose Tlumočníci a překladatelé => Soudní překladatel) will be required only if accuracy of the translation should be questioned. The same applies to the requirements for the verification of signatures and stamp imprints authenticity.
Documents not issued in the Czech language (except for the proofs of identity) which are presented by legal persons with their registered offices in third countries must be officially translated by a registered translator (choose Tlumočníci a překladatelé => Soudní překladatel). The authenticity of signatures and stamp imprints on the originals of submitted documents issued abroad must be verified unless an international treaty stipulates otherwise.
Paper documents should be presented in originals or verified copies, electronic documents should contain either a qualified electronic signature of the person who issued it or an authentication clause on conversion of a paper document into electronic form. Electronic documents can be sent by e-mail directly to the officer at the counter.
What are the time limits for the processing of the notification?
The trade licensing office shall make an entry in the trade licensing register within five working days of making the submission of the notification.
The record of the branch plant is available on the register’s website immediately after the entry in the register has been made (see www.rzp.cz/portal/en/rejstrik => Find an entrepreneur).
The trade licensing office shall issue the notifier with an extract from the trade licensing register which must be attached to the application for the registration of the branch plant in the commercial register.
What are the time limits for applying for the registration of the branch plant in the commercial register?
The application for the registration of the branch plant in the commercial register must be submitted within 90 days of notifying the trade.
The application may be submitted either to the relevant registry court or to one of notaries who also are entitled to make entries in the commercial register.
The head of the branch plant is authorised to represent the foreign legal person in all matters relating to the plant as of the date of the plant’s registration.
Similarly, the trade licence is effective as of the date of the plant’s registration and is valid for an unlimited period of time.
The record in the commercial register includes the unique identification number of the entrepreneur (identifikační číslo osoby – IČO) and is available on the register’s website or.justice.cz.
For more information on the registration of a branch plant in the commercial register please contact a notary or a lawyer.
Do you need to learn more? Please see “Useful Links” or contact our employees:
Ms Vendula Podlipná, podlipna.vendula@brno.cz, phone +420 542 173 326
Mr Lukáš Lysoněk, lysonek.lukas@brno.cz, phone +420 542 173 056
Mr Ctirad Los, los.ctirad@brno.cz, phone +420 542 173 344
Ms Adéla Nečasová, necasova.adela@brno.cz, phone +420 542 173 565
Magistrát města Brna (Brno City Municipality)
Živnostenský úřad města Brna (Trade Licensing Office of Brno City)
Malinovského nám. 3, 601 67 Brno, 4th floor
E-mail: zu@brno.cz
Czech website: Živnostenský úřad města Brna (ŽÚmB)
Appointments can be made via www.brno.cz/w/online-objednani-zu => English-speaking clients.