How to do business as a courier? Terms of business and taxes
Many drivers are attracted to working behind the wheel. As a courier, you're your own boss, and you can earn good money. How do you start such a business? We've summarised the most important things for you.
What do I need to be a courier?
Courier companies such as DPD, Wolt, Bolt Food, Rohlik or Foodora most often work with couriers with an ID number. Whether you will be delivering parcels, food or shopping, you usually need a trade licence for this work.
You also usually need to have your own means of transport - but some companies also offer the option of hiring a company vehicle. Of course, you can't operate a motor vehicle without a driving licence. Other requirements include a smartphone for taking orders.
Which trade to set up?
The type of trade depends on the means of transport you will be using for your work:
- If you will be riding a bicycle, a free trade called "51. Pipeline and land transport (excluding rail and road motor transport)".
- Scooter and car drivers need a licence. The activity of a courier-driver specifically falls under this type of licensed trade: 'Road and motor transport - freight operated by vehicles with a maximum authorised weight not exceeding 3.5 t'.
In order to obtain a licence, you must meet the general conditions of the trade:
- Full legal capacity (usually proof of ID is sufficient).
- Good character (you must not have a criminal record relating to the business or transport).
Although the courier business is a licensed trade, the authority does not usually require any additional documents to issue the relevant licence, it will only check your criminal record.
Where to apply for a trade licence?
You can apply for a trade licence in person at the Trade Licensing Office, but you can also apply online via the Trade Licensing Portal. In both cases, you will be charged an administrative fee. For personal processing it is CZK 1,000, for electronic processing you will pay CZK 800.
It is also necessary to report the commencement of the trade to the tax office, the health insurance company and the Czech Social Security Administration (ČSSZ). This should happen automatically when you fill in the single registration form.
And if you don't want to spend time on the forms, we will be happy to sort everything out for you.
What about taxes and levies?
As a sole trader, you obviously have to pay taxes and social security and health insurance contributions. There are 4 ways to work out the taxes for a self-employed person. Small business owners usually find the following most useful:
- A flat rate, which is calculated as a percentage of your income.
- A flat tax as a single monthly amount that includes both income tax and insurance contributions. The amount is determined by your tax bracket, and hence your annual earnings.
The amount of insurance contributions depends on whether you are in business as a main or secondary activity. If you have a main business (and do not pay a flat-rate tax), you must pay at least the mandatory minimum contributions each month. For a secondary activity, the conditions are more complicated, but more favourable - we summarise them in our article on self-employed for secondary activities.
You file an annual tax return with the tax office and reports to the health insurance company and the Social Insurance Institution.
Can a foreigner work as a courier?
This depends on the conditions of the particular company (sometimes the language barrier can be a problem). In any case, a citizen of another country can also set up a trade in the Czech Republic if he or she meets the above conditions.
In addition, unlike a citizen of the Czech Republic, he needs:
- A criminal record extract from his/her home country (no older than 90 days). EU citizens can apply for it at CzechPoint branches.
- Business headquarters in the Czech Republic and the consent of the owner of the property (our virtual headquarters can also be used).
- Proof of residence in the Czech Republic (only for non-European Economic Area citizens).
In addition to the trade license, a foreign self-employed person in the Czech Republic must also arrange Czech health and social insurance.
Need more information? Read the detailed conditions for foreigners doing business in the Czech Republic and the instructions for registering for Czech social and health insurance.
Considering a career as a courier?
We will be happy to help you get started. Order a business set-up online and you can hit the streets soon. And if you need help with your trade, email our specialists using the form below.