What is a trade and who can do business on an ID?

According to the Trade Business Act, a trade is “a continuous activity carried on independently in one's own name, under one's own responsibility, for the purpose of making a profit”. In other words, doing business on an ID card is designed for everyone who meets the following conditions:

• Age at least 18 years (younger persons need a responsible representative and consent of the court).
• Legal capacity (evidenced by an identity card).
• Integrity (confirmed by an extract from the criminal record, which the office obtains itself).
• Professional competence (for certain types of trades).

1. First steps: How to start a business

Your journey will begin at the trade office. You can go to any office, regardless of your place of residence.

To establish a trade, you will need:

• ID card.
• 1,000 CZK (or 800 CZK if submitted electronically).
• Completed the Unified Registration Form, which replaced the earlier complex administrative procedures.

TIP: If you prefer modern technologies, you can start a business online through the Portal of the Entrepreneurship Business. Just log in with a bank identity, for example, and submit the form electronically.

What type of trade to choose?

There are four basic types of trades:

1. Free — Does not require professional qualifications, suitable for example for marketing services.
2. Artisanal — Requires proof of a certificate of instruction, graduation exam in a field or practice. Examples: hairdressers, bakers.
3. Bound — Prerequisite is a professional qualification, such as accounting or driving school.
4. Conceded — In addition to professional competence, requires a state government permit, for example for travel agents.

TIP: to work as an operator/trader in Peakforce you need a free trade, namely “Consulting and consulting activity, processing of professional studies and opinions”

2. What to do after starting a business?

1. Registration at the health insurance company and OSSZ

By filling out the unified registration form, you automatically register with the health insurance company and the District Social Security Administration (OSSZ). The amount of payments depends on whether the trade is your main or secondary income:

Changes in health and social insurance in 2025

‍

From January 2025, the minimum advance payments for health and social insurance will increase. Here are the specific amounts:

• Minimum deposit for health insurance: Increases to CZK 3,143 per month (compared to CZK 2,968 in 2024).
• Minimum social security deposit: Increases to CZK 4,759 per month (compared to CZK 3,852 in 2024) .These amounts are based on the growth of the average wage, which is the basis for their calculation.

For those who carry out their trade as a secondary activity (for example, during employment or parental leave), the mandatory minimum advance payments will be paid only if their profit exceeds the determined amount, which in 2025 rises to 111 737 CZK per year.

TIP: Be sure to keep an eye on changes in legislation — especially if you're starting a business on a core business, an increase in advances can have a significant impact on your budget.

2. Taxes

From 2024, you no longer need to register with the tax office — registration takes place automatically. You file your tax return once a year, electronically. If you exceed the income of 2 million crowns per year, you must register as a VAT payer.

3. Flat-rate tax

If you want to minimize administration, you can sign up for a flat tax. The monthly payment includes social and health insurance as well as income tax. The advantage is that you do not have to file a tax return.

Tips for starting a business easily

• Choose a place of residence: Most often this is the address of residence, but if you are in a rental, be sure to secure the consent of the owner.
• Bookkeeping: As a non-VAT payer, you only need tax records. Keep all documents for tax returns.

Advantages of working on an ID card in practice

1. Freedom in planning — You work when it suits you.
2. Possibility of higher income — You decide your hourly rate yourself.
3. Tax Optimization — Flat rates and other tools allow you to reduce your tax base.

Working on an ID offers amazing freedom and flexibility, but it also requires responsibility and organization. 2025 will bring minor changes, especially in the area of minimum insurance advances, and it is important to prepare for them. Take advantage of the practical tips from this article so that nothing surprises you and enjoy all the benefits that business brings.

‍