Pawnbroking and retail of second-hand goods

Pawnbroking and retail of second-hand goods is an unqualified (free) trade (field no. 49 of Annex 4 to the Trade Licensing Act) covering the operation of pawnshops and the sale of used goods. It does not require any professional qualification - you only need to meet the general conditions under Section 6 of the Trade Licensing Act (Act No. 455/1991 Coll.). The trade licence comes into existence on the very day of notification.

Conditions for operating

Full legal capacity - this may be replaced by a court's approval of the legal guardian's consent for a minor to carry on business activity independently (Section 6(1)(a) of the Trade Licensing Act in conjunction with Section 33 of the Civil Code).
A clean criminal record - proven by an extract from the Criminal Records Register, which the Trade Licensing Office obtains itself in electronic form for Czech citizens (Section 6(1)(b), (2) and (3) of the Act).
Professional qualification is NOT documented - this is an unqualified (free) trade under Annex 4 to the Trade Licensing Act; the special conditions under Section 7 of the Act do not apply here.
Freedom from debt is not proven upon notification; however, there must be no obstacle to operating the trade under Section 8 of the Act (e.g. a court-imposed ban on activity relating to the object of business or an as yet unfinished bankruptcy).

Examples of activities

Operating a pawnshop (providing loans against a pledge of movable property)
Second-hand shop - buying and selling used goods
Second hand - sale of used clothing and textiles
Buying and selling used electronics and mobile phones
Commission sale of used goods
Antiquarian bookshop - sale of used books
Sale of used furniture and household equipment
Buying and selling used sports equipment

What this trade is and what it is for

The trade Pawnbroking and retail of second-hand goods is one of the fields of activity of the unqualified (free) trade (field no. 49). The unqualified trade is, by law, a single trade - "Production, trade and services not listed in Annexes 1 to 3 of the Trade Licensing Act" (Section 25(2) of Act No. 455/1991 Coll.) - and is internally divided into the individual fields listed in Annex 4. This field entitles you to operate pawnshops and to trade in used (previously used) goods. In practice it covers the business of second-hand shops, charity-style second hands, antiquarian bookshops and classic pawnshops.

Pawnbroking means providing loans secured by a movable item that the client leaves as a pledge. Retail of second-hand goods covers buying and reselling goods that have already been used - from clothing through electronics to furniture.

This is an unqualified (free) trade under Annex 4 to the Trade Licensing Act. That means that to operate it you need no professional education or experience - it is enough to meet the general conditions under Section 6 of the Act. Moreover, the trade licence comes into existence on the very day of notification (Section 10(1)(a) of the Act).

What falls under this trade (and what does not)

Field no. 49 covers in particular:

operating a pawnshop and providing loans against a pledge,
buying and selling used goods in second-hand shops,
commission sale of used goods,
sale of used electronics, clothing, books (antiquarian bookshop), furniture or sports equipment.

Mind the boundaries with other trades and regulations:

Consumer credit. If you wished to provide consumer credit beyond the classic pawnshop loan against a pledge, you would enter the scope of the Consumer Credit Act (Act No. 257/2016 Coll.) and the supervision of the Czech National Bank - this is no longer covered by the trade licence.
Precious metals. Buying and selling gold, silver and other precious metals is subject to separate regulation under the Hallmarking Act (Act No. 539/1992 Coll.) and to registration with the Assay Office.
New goods. The sale of new goods falls under a different field of the unqualified trade - usually field no. 48 "Wholesale and retail". If you want to sell new goods as well, you simply add this field to your unqualified trade (the extension is free of charge).
Antiques and cultural monuments. Trading in antiques and items of cultural value is subject to special obligations under the regulations on the sale and export of items of cultural value (Act No. 71/1994 Coll.).

Operators engaged in buying goods are also obliged to comply with the rules on identifying the seller and keeping records of purchased goods, in particular in connection with the Act on Measures against the Legalisation of Proceeds of Crime (Act No. 253/2008 Coll., the so-called AML Act) and any generally binding municipal ordinances. The exact scope of these obligations will be confirmed by the competent Trade Licensing Office.

Conditions for obtaining it under the law

Because this is an unqualified (free) trade, professional qualification (the special conditions under Section 7 of the Act) is not documented at all. You must meet only the general conditions under Section 6 of the Trade Licensing Act:

full legal capacity - this may be replaced by a court's approval of the legal guardian's consent for a minor to carry on business activity independently (Section 6(1)(a) in conjunction with Section 33 of the Civil Code),
a clean criminal record - Section 6(1)(b). A person who has been finally convicted of an intentional criminal offence committed in connection with business or with the object of business is not regarded as having a clean record (Section 6(2)). A clean criminal record is proven by an extract from the Criminal Records Register, which the Office obtains itself for Czech citizens (Section 6(3)).

At the same time, there must be no obstacle to operating the trade under Section 8 of the Act (for example a court-imposed ban on activity or an ongoing bankruptcy).

Responsible representative (Section 11). If you do not meet the conditions yourself or do not operate the trade in person (typically in the case of a legal person), you may appoint a responsible representative - a natural person who is responsible for the proper operation of the trade and who must meet the general conditions under Section 6. For an unqualified trade, the responsible representative does not document any qualification. One person may act as a responsible representative for no more than four entrepreneurs (Section 11(5)).

How to notify or obtain the trade step by step

Fill in the Unified Registration Form (URF). It is used to submit the notification of the trade (Section 45a(2)) and at the same time it can be used to register for income tax and to notify the social security administration and the health insurance company.
Submit the notification. You may do so in person at any municipal Trade Licensing Office (acting as a central registration point), online via the rzp.gov.cz portal, or at a Czech POINT branch. The requisites of the notification and the documents are governed by Sections 45 and 46 of the Act.
Submit the documents and pay the fee (see below).
Wait for the registration. If you meet the conditions, the Trade Licensing Office enters you in the Trade Register and issues an extract within 5 working days of receiving the notification (Section 47(1)). However, the entitlement to operate the trade already arises on the day of notification (Section 10(1)(a)) - so you may start doing business even before the extract reaches your hands.

You may notify several fields of the unqualified trade at once for a single administrative fee. If you wished to add a field later, the scope of your authorisation is governed by Section 28 of the Act - a new field must be additionally notified, otherwise the authorisation does not cover it. You can find the detailed procedure in the guide Jak založit živnost.

Documents and fees

Completed URF (trade notification).
Identity document (identity card or passport).
Extract from the Criminal Records Register - for Czech citizens the Office obtains it itself, you do not submit it.
Document proving the legal title to use the premises of the registered office, if it differs from your residence (Section 46(1)).
Administrative fee for notifying the trade: CZK 1,000 (CZK 800 for electronic filing via rzp.gov.cz).
Extension by a further field of the unqualified trade: CZK 0 (free of charge).

Frequently asked questions

Do I need a professional education to run a pawnshop or second-hand shop?

No. This is an unqualified (free) trade for which no qualification is documented. It is enough to meet the general conditions under Section 6 of the Trade Licensing Act (full legal capacity and a clean criminal record).

When can I start doing business?

The authorisation arises on the day the trade is notified (Section 10(1)(a)). The Office issues the extract from the Trade Register within 5 working days (Section 47(1)), but you can start doing business immediately after a flawless notification.

Can I buy and sell gold and jewellery under this trade?

The classic buying of used goods, yes, but trading in precious metals (gold, silver) is subject to the Hallmarking Act and to registration with the Assay Office. The trade licence alone does not cover this area.

How much will I pay if I want to add a further field of the unqualified trade?

If you already operate the unqualified trade, the extension by a further field (e.g. "Wholesale and retail" for selling new goods) is free of charge - a fee of CZK 0.

Do I have to keep records of purchased goods?

When buying goods you are usually obliged to verify the seller's identity and keep records of the purchased goods, primarily in connection with the Act on Measures against the Legalisation of Proceeds of Crime (No. 253/2008 Coll.) and any municipal ordinance. The exact scope of the obligations will be confirmed by the competent Trade Licensing Office.