Freelancing in Prague: how the živnost works, step by step

Freelance in Prague for a week and one word will start following you around: živnost. Your accountant says it. Your client's finance department says it. Other freelancers say it with the faint weariness of people who have queued for it. It is the trade licence, and it is how self-employment works in Czechia.

The good news: it is one of the quicker bits of Czech paperwork. The less good news: the licence is the start of your obligations, not the end of them.

Three kinds of trade

Czech law sorts trades into categories, and the category decides what you must prove.

• Free trades (volné živnosti) need no special qualification. Many creative and consulting activities sit here.
• Craft trades (řemeslné) need proof of training or experience in the field, such as a relevant certificate or years of practice.
• Professional trades (vázané) need a formal qualification. A fourth group, concessions (koncesované živnosti), needs an official permit as well.

Your category depends on the exact activity, not your job title. "Designer" and "web developer" can fall under different trades, and a trade licensing office or an accountant can tell you in a short conversation. Write down precisely what you sell before you go.

How to register

You register with the živnostenský úřad, the trade licensing office. The usual route is the office in your city district, but online registration is available too through the single registration form. You declare your activity, address and identity, and pay an administrative fee set by law (as of 2026; check the official source).

Once you are an OSVČ (osoba samostatně výdělečně činná), you also file an annual tax return, and deadlines are fixed. Missing them costs money. Many freelancers hire an accountant for the first year, which is a sensible use of cash and not a luxury. A good one will also tell you things you did not know to ask.

How you pay tax

There are two broad routes. Under the ordinary system you subtract your actual expenses from your income, or you apply a flat-rate percentage of income as expenses, depending on the type of trade. Under the flat-rate tax scheme (paušální daň) you pay one fixed monthly amount that covers tax and contributions, as long as you stay below an income limit (three bands, up to CZK 2 million a year). Limits and amounts change, and the band 1 amount itself fell mid-2026, so confirm the current figures with the Financial Administration or an accountant (as of 2026; check the official source).

Which is better? It depends on your costs. Someone who sells time with few expenses reads the options differently from someone who buys equipment and travels. This is exactly the question a first-year accountant is for.

Two insurers and a reminder

Employees have contributions taken from their pay. Freelancers do it themselves. You pay health and social insurance advances every month, with a minimum even in a quiet month, and settle up after the year ends. For a main activity in 2026 the minimums are CZK 3,306 for health and CZK 5,005 for social insurance from July (CZK 5,720 before), as of 2026; check the Czech Social Security Administration (ČSSZ). Beginners often forget that the minimum applies when income is low, then meet a bill in spring that surprises them. Put money aside as invoices are paid.

VAT and invoices

Once your turnover passes a set threshold you must register for VAT: since 2025 the test runs by calendar year, with CZK 2 million in a year making you a payer from the next 1 January and CZK 2,536,500 making you one at once (as of 2026; check the Financial Administration). You can register earlier if you wish. Clients who are VAT payers sometimes prefer a supplier who is one, so it can be a commercial choice as well as a legal one. Every invoice needs certain details, including your name, address and IČO. Keep invoices clear and numbered, and keep copies.

If you are not an EU citizen

A trade licence on its own does not give you the right to live here. Non-EU citizens usually need a long-term visa or residence permit for business purposes, and the Ministry of the Interior (OAMP) decides on that. Permit first, licence second. Registering a business and assuming the rest will follow is the quickest way to a stressful year.

Mixing jobs

Plenty of people hold an employment contract and a trade licence at the same time: the day job in an office and a few client projects on the side. That is legal. It does change your tax and insurance position, because the rules for the self-employed side depend on whether it is your main or secondary activity. Ask an adviser before you start, not after the first bill.

What locals know

Czech freelancers talk constantly about paušál, meaning the flat-rate expense percentage or the flat-rate tax scheme, so the word is worth recognising. They also keep a separate bank account for the business, which makes year-end far easier. Clients here pay on the terms stated on the invoice, and chasing late payment politely and in writing is normal.

Frequently asked questions

Do I need an accountant?

Not legally, but many freelancers use one for the first year. Mistakes with deadlines and insurance advances cost more than the fee.

Can I freelance while employed?

Yes. Check your employment contract for conflict-of-interest clauses, and ask an adviser about the tax and insurance effect.

How long does registration take?

It is one of the quicker procedures. Confirm current timing with the trade licensing office.

Do I need a Czech address?

You need an address to register the business. Ask the trade licensing office what proof is accepted for rented property.

Today: write one sentence describing exactly what you sell, then ask an accountant or the trade licensing office which category it falls into.

This is a general explainer, not legal or tax advice.