How to start a business as an employee

With high inflation, every extra crown is useful. You can support your family budget even if you already have a job. Just start a business as a "side job". Find out what it takes.

What are the options?

Running a business while working is not difficult in the Czech Republic. Apart from your time and effort, you only need to complete a few formalities. The specific procedure depends on your chosen form of business. You basically have two choices - either you become a sole trader (self-employed) or you set up a company (most often s.r.o.).

Each option has its pros and cons, which we discuss in detail in our comparison of sole proprietorships and limited liability companies:

Employee - self-employed

To obtain a trade licence, which allows you to legally operate your business, all you need to do is contact the trade licensing office (in person or online) in the case of reportable trades. If you meet all the conditions for setting up your chosen trade, you will fill in a single registration form and pay an administrative fee of CZK 1,000.

You will then receive your registration number and start your business as a natural person - self-employed. You are also obliged to report your trade to the health insurance company and the Czech Social Security Administration (ČSSZ). Usually you do this directly via the form mentioned above.

As an employee, you are self-employed for a so-called secondary activity. This has several advantages over your main gainful activity. For example, you do not pay health and social security contributions in the first year of business. As a rule, you are also subject to lower levies - and with small earnings you do not even have to pay social security at all.

At the beginning of the following year, you then file a tax return and pay the tax assessed. You also submit your income and expenditure statements to the health insurance company and the Social Insurance Institution - and pay any additional premiums.

Interested in a trade? Read more in our article on running a business as a sideline.

Employee - business owner

The process of setting up an LLC is a bit more complicated. We describe the whole process in our guide to setting up a company - here we'll just outline the main steps you won't miss on your journey to starting a new business:

  1. Drawing up a memorandum of association or memorandum of incorporation
  2. Obtaining a trade license for the company
  3. Depositing the share capital (or part of it)
  4. Registration of the company in the Commercial Register
  5. Registering the company for taxes

Are you wondering what your obligations are as a new entrepreneur? Read our guide to the first steps of being an LLC owner.

Doing business at work: what to look out for?

When starting a business, you need to take into account your existing obligations to your employer. As well as meeting your normal obligations, such as keeping to working hours, you have one extra task. This is because your employer must give you permission to engage in gainful employment - and in writing.

  • If you work in the private sector, the law only requires this permission if you want to do business in the same field as your employer. Also watch out for competition clauses, which many companies like to add to employment contracts. These can also prevent you from doing business without your employer's permission.
  • Civil servants must always ask for consent, regardless of their chosen field.

Tip! According to the Labour Code, you do not need consent if you intend to engage in artistic, literary, journalistic, scientific or teaching activities. Even if your employer works in the same field.

Entrepreneur at work quickly and easily

Don't feel like spending time going to the authorities? We will be happy to handle the establishment of a trade and a limited liability company for you. We will arrange the trade licence, draw up contracts and ensure registration in the commercial register. And we can do it remotely - on the basis of a power of attorney.

Just leave us a contact and we'll work out the details.

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