A practical guide to trade licences, self-employment and business in Czechia

Do I Need a Trade Licence? Interactive Test (2026)

Find out whether your activity requires a trade licence, when occasional income up to 50,000 Kč is enough, and how to spot the risk of disguised employment (Švarc system).

What turns an activity into a business

The law does not distinguish by the amount of income, but by the **nature of the activity**. Under § 420 of Act No. 89/2012 Coll., the Civil Code, an entrepreneur is anyone who meets all four of the following criteria at once: - **regularity** – you do it repeatedly, or plan to, not just once, - **independence** – you decide the time, place and method yourself, - **own name and responsibility** – you act for yourself and bear the risk of the outcome, - **for profit** – the aim is earnings, not a free hobby. If all four points apply at the same time, it is a business and you will need a trade authorisation (or another registration, e.g. as an agricultural entrepreneur). If even one criterion is missing – say, regularity in a one-off sale – you usually do not need a trade licence. The authorisation is notified in the [Trade Register](https://rzp.gov.cz). Test your situation in both tests below.

Are you already in business under the law? Check the five signs

Tick what applies to your activity. If all five points apply at the same time, it is a business and you will need a trade authorisation.

Tick everything that applies to you.

Borderline cases: do you need a trade licence or not?

Five common situations where people are unsure. Answer to find out which way your situation leans – this is a rough guide, not legal advice.

Do you invoice only one long-term client who dictates your working hours, place and method?
Do you rent out a flat or house that you own?
Do you sell surplus produce from your garden or livestock (fruit, vegetables, eggs)?
Do you have income from author's fees (texts, photos, music, artworks)?
Do you work under an agreement to complete a job or an agreement to perform work (DPP/DPČ)?

Answer every question.

Frequently asked questions about the trade licence test

What are the penalties for doing business without a trade licence?
Unauthorised business activity is a misdemeanour under the Trade Licensing Act (§ 61 and 62), with a fine of up to 500,000 Kč for an unrestricted trade, up to 750,000 Kč for a craft or regulated trade, and up to 1,000,000 Kč for a concession trade. Repeated or more extensive breaches can also lead to criminal liability for the offence of unauthorised business activity (§ 251 of the Criminal Code). You will also be missing the health and social insurance tied to self-employment. How to avoid this: [how to set up a trade licence](/jak-zalozit-zivnost).
Do I have to pay tax on a one-off income, e.g. selling an old laptop?
It depends on the amount. One-off and occasional income (selling your own belongings, a one-time favour) up to a total of 50,000 Kč per year is exempt from tax and does not belong in the tax return (§ 10 (3) ZDP). Above the limit, the whole amount is taxed as other income. More in the overview [business without a trade licence](/provoz-zivnosti/podnikani-bez-zivnosti).
How much does it cost to set up a trade licence?
Notifying your first trade licence costs 1,000 Kč, or just 800 Kč electronically via the Citizen Portal. Each further notification or concession application costs 500 Kč (400 Kč online). If you notify several trades at once, you pay the fee only once, at the highest rate. Details in the [setup guide](/jak-zalozit-zivnost/poplatky).
How quickly do I get a trade authorisation?
For notifiable trades (unrestricted, craft, regulated), the authorisation arises on the very day of notification, and the office issues the extract with your IČO within 5 working days. For a concession trade, you additionally wait for the decision granting the concession, which takes longer. Filing online is the fastest. Procedure in the [guide to setting up online](/jak-zalozit-zivnost/online).
What is the Švarc system and why avoid it?
The Švarc system is a situation where you formally invoice as a self-employed person (OSVČ), but in fact perform dependent work – a single client dictates your working hours, place and method. This is illegal disguised employment, checked by the Labour Inspectorate and the Tax Office, with fines for both sides. The solution is an employment contract, or more independent clients – see [trade licence alongside employment](/jak-zalozit-zivnost/pri-zamestnani).

Related topics

How to set up a trade licence

The complete step-by-step procedure: online and in person, documents, fees, and what to handle right after registration.

Business without a trade licence

Three legal routes to income without authorisation: occasional income, garden surplus, and yard sales.

Extra income and IČO

When it pays to set up a trade licence just for extra income, and how it works alongside employment.

OSVČ or s.r.o.?

Compare liability, admin and taxation, and take the interactive test for your situation.

Setup fees

2026 schedule of administrative fees – first notification, further filings, and how to save by filing electronically.

I have my first job

What to do right after setting up your trade licence, before you issue your very first invoice.