The Trade Licensing Act (No. 455/1991 Coll.)
The law defines the operation of a licensed trade as an ongoing activity, performed
independently, in one's own name, at one's own responsibility, for the purpose of achieving
profit and under the conditions set forth by this law. This is a definition that coincides, in its
characteristics, with the definition of transacting business in accordance with the Commercial
Code. The meaning of the given definition of a trade does not include one-off jobs, work not
done for the achievement of profit and under the direct control or instructions of another
individual. The effect, however, of the Trade Licensing Act is more specific in its resulting
connection to the requirements it sets forth and does not include the transaction of business on
the basis of authorization other than trade licensing.
Within the scope of the Trade Licensing Act then, an entrepreneur is understood to mean
every physical individual and legal entity, domestic or foreign, that fulfils the requirements set
forth by this law.
A trade is essentially every activity, including activities operated by an employer as additional
profit-seeking activities, as long as it fulfils the above-stated criteria and is not specifically
excluded from business activities.
The Trade Licensing Act governs a number of specific responsibilities of the
entrepreneur in connection with his business and governs, in detail, even the official
procedures of reporting a trade or, respectively, application for a concession and the issue of
trade authorisation. It also governs trade inspection, its operation and application of fines for
violation of the law and resolves other specific issues, such as the maintenance of trade
registers, cooperation of individual authorities of government administration in the area of
trades and business along with other related issues.
The currently valid trade licensing law differentiates notifiable trades, for which the
right to operate the trade arises, in most cases, by notifying the relevant trade authority, and
for licensed trades for which the right to operate business arises at the time the concession is
granted. Notifiable trades are categorised into:
1. Non-regulated trades, for which only general trade operating conditions are
established (Annex No.4).
2. Craft trades, specified in annex no. 1 of the Trade Licensing Act, which are
primarily considered from the classic standpoint of professional activity in
a specific field and require special professional capabilities attained generally
through education in the field and a certain amount of experience.
3. Regulated trades, specified in annex no. 2 of the Trade Licensing Act, the
operation of which require special professional capability and authorisation,
certification or a similar document issued to the entrepreneur by the empowered
authority in accordance with a relevant special regulation.
Licensed trades, whose fields are set forth in appendix no. 3 of the Trade Licensing
Act, are primarily considered to be those activities whose operation, by a special legal
regulation, is dependent upon permission from the materially relevant authority of the State
administration. All in all, proof of certain professional capabilities is required. For selected
trades other requirements for the entrepreneur exist, such as proof of a clean criminal record
for all employees, or certain conditions for operating the trade.
From the standpoint of the subject of business, the law differentiates between the
following types of trades:
- Manufacturing – authorising the manufacture as well as sale of products of the same type
from other manufacturers
- Business - including the purchase of goods for re-sale and sales, authorising the
mediation of sale as well as rental of goods
- Provision of services, by which it is understood to mean, providing maintenance and
repair of items, transport of individuals and cargo and other work and satisfaction of needs,
specifically consulting and mediating activities.
The general conditions for the operation of a trade are that the individual:
-
be at least 18 years old
-
be capable of performing legal tasks
-
have a clean criminal record
A clean criminal record is understood to mean that the individual has no record of
convictions for offences that pose a barrier to operating a business. According to the relevant
provision, a person does not have a clean criminal record if that person has been legally
convicted:
Of a criminal act committed intentionally and sentenced to imprisonment for at least one
year, for:
Each punishable offence committed intentionally, whose factual basis is in connection
with business, if the offence in question is not as stated above, or:
Fore each punishable offence committed through negligence, whose factual basis is in
connection with the subject of business.
A clean criminal record is proven to the Trade Licensing Authority by relevant
documents issued in the country where that individual is a citizen, as well as countries where
that individual has resided for a long term (more than three continuous months) over the past
three years.
An entrepreneur that is a foreign individual and does not have a residency permit for
the Czech Republic is required to assign an authorised representative. An authorised
representative is a person assigned by the entrepreneur that is responsible for the proper
operation of the trade and for the upholding of legal trade regulations and who has, (if the
person in question is not the wife or husband of the entrepreneur), a legal labour relationship
to the entrepreneur. The authorised representative must fulfil general and specific
requirements for the operation of a trade, must have permanent residency established in the
Czech Republic and must, if the person in question is not a citizen of the Czech Republic,
prove before the Trade Licensing Authority, knowledge of the Czech or Slovak language.
The operation of some trades requires, in addition to general requirements, special
trade requirements. These special requirements for operating a trade are professional or other
capabilities required by the Trade Licensing Act or by special legal regulations. Professional
capability is required when reporting professional trades; dependent trades and for most
concession trades. If a potential entrepreneur does not fulfil the special conditions requisite
for operating a trade, he may fulfil these conditions by appointing an authorised
representative.
Proof of trade authorisation is a Statement from the Trade Licensing Register
confirming the fulfilment of conditions set forth by this law.
On the basis of proof of trade authorisation, trade may be done at one or more
premises, as long as the entrepreneur has usage or ownership rights to the premises.
Appendix
The operation of a non-regulated trade is restricted solely by the necessity of
fulfilment of the general requirements; operating a craft trade or a regulated trade is further
restricted by the necessary fulfilment of special requirements for operating a trade that is
professional or requires other special capabilities.
Professional capability for professional trades is proven by:

Certificate of education in the relevant, 3-year trade study or other document
confirming completion of the relevant three-year study in the field and a document
confirming three years of experience in the field.

Diploma confirming the completion of studies in the relevant field at a trade school,
whose length is less than 4 years and a document confirming three-years of experience
in the field.

Diploma confirming completion of graduation exam in the relevant field of study at
a professional trade school or apprentice training centre or high school with
professional preparatory subjects and a document confirming two years of experience
in the field.

Diploma or other document confirming the completion of baccalaureate or master's
study program at the relevant college and document confirming one year of experience
in the field.
These documents may be substituted by:

A certificate of apprenticeship in a related three-year apprenticeship program or other
document confirming the proper completion of study in a related field and a document
confirming the completion of four years of practice in the trade field.

Diploma confirming the completion of studies in a related field of study at a trade
school, whose length is less than four years and a document confirming the
completion of four years of experience in the field.

Diploma confirming the completion of a graduation exam in a related field of study at
a professional trade school or apprentice training centre and a document confirming
three years of practice in the field.

Diploma or other document confirming the completion of college in a related field and
a document confirming two years of practice in the field.

Certification of re-qualification or other document regarding professional capability
issued by an institution accredited by the Ministry of Education, Youth and Physical
Education or a relevant Ministry branch governing the field in which the trade is
operated and a document confirming four years of experience in the field.

A document regarding the completion of a qualification examination before
a commission composed of representatives of the relevant Trade Licensing Authority,
the relevant trade school or apprentice training centre, or even the relevant trade
association if it exists, and a document confirming four years of experience in the
field, or possibly,

A document confirming six years of experience in the field.
Professional capability for a concession trade is governed by special regulations listed in
appendix no. 3 of the Trade Licensing Act or established by this appendix. If appendix no. 3
of the Trade Licensing Act lists or requires professional capability consisting of training in
a field or high-school level education completed by graduation exam, the fulfilment of
educational requirements is proven by the same document of re-qualification and a document
confirming four years of practice in the field. For concession trades, the Trade Licensing
Authority will assign or change requirements for the operating of a trade by the entrepreneur
on the basis of the Trade Licensing Law or on the basis of special regulations.
Documents submitted for notifiable trades, (non-regulated, craft or regulated), and licensed
trades are the same. They are:

For notifiable trades the "Notification of Trade" form is submitted, and for licensed
trades, an "Application for Concession", (filled out in advance, though it is possible to
fill them out at authority offices as well).

Statement of criminal record for the entrepreneur, or his authorised representative, if
assigned, and documents by which a foreign individual proves a clean criminal record,
(documents issued by the country where the foreign individual is a citizen, as well as
countries where he has resided for more than three months in the course of the past three
years). The statement of criminal record, as well as the other mentioned documents,
may not be older than three months.

Declaration of the authorised representative, if assigned, that he agrees with the
function, with taking on responsibilities in accordance with the Trade Licensing Act and
with listing of the entrepreneurs for which he holds the function of authorised
representative. If the authorised representative does not sign this affidavit in person at
the Trade Licensing Authority, the signature on affidavit must be witnessed by a notary.

Previously issued trade authorisations for the entrepreneur, (if such exist).

Statement from Commercial Register not older that 3 months, if the individual is listed
therein.

Document confirming the fact that the individual has no outstanding tax debts towards
state authorities, (document issued at the appropriate financial authority).

Document regarding ownership or other rights to premises where the trade will be
performed if this differs from residence.

Document regarding payment of administrative fees for each reportable or concession
trade.

In the event that the entrepreneur intends operating an industrial trade, documents
proving facts related to operating a trade in an industrial manner.
Administrative and other fees and how they can be paid:

Administrative fee of 1000,- Kč for the issue of Trade Authorisation,

Administrative fee of 500,- Kč for the issue of the other trade,

Fee of 50,- Kč for a statement from the Criminal Records Register.
Fees are collected by the relevant authorities, (Trade Licensing Authority, Criminal
Records Register).
Official deadlines:
The Trade Licensing Authority is required to issue a Statement within 15 days of the
notification of trade, if all requirements have been met.
Sanctions that may be applied in the event of not upholding the required responsibilities:
For notifiable trades, if the entrepreneur does not correct insufficiencies or does not
fulfil the conditions established by the Trade Licensing Law, the Trade Licensing Authority
will commence a process and decide that trade authorisation did not occur with notification.
(Respectively, it will decide that the entrepreneur did not fulfil the requisite conditions for
trade authorisation to arise).
For licensed trades, if the Trade Licensing Authority, before the decision on concession issue
is made, must verify whether or not the general and special conditions for operating a trade
have been fulfilled and whether or not there is a preventative circumstance for the operation
of a trade. If any of the conditions are not fulfilled or if a relevant state administrative
authority, as per appendix no. 3 of the Trade Licensing Act, is not in agreement with the issue
of a concession, the Trade Licensing Authority will deny issue of the concession.