Self-employed student: how to set up a trade at school
Do you have an interesting business idea or do you believe you can sell your skills better on your own than on a temporary job? Start a business while you study! You can easily handle the business license and a few administrative steps. Start your career now and gain valuable practical experience before you collect your school leaving certificate or diploma.
Students: full-time versus distance learning
As a student, you have a number of advantages over your employed peers. These include trade concessions. In fact, running a business while studying is usually classed as a secondary occupation, which is subject to more lenient conditions than your main occupation. Among other things:
- You will not pay any insurance premiums in the first year of business;
- you are not subject to mandatory minimum deposits;
- you only pay social security on higher incomes.
We explain all the benefits in the article on secondary business.
However, you need to meet the following criteria to benefit from studying:
- Age 18-26;
- full-time study (in the case of higher education, it can be combined if you provide the institutions with proof of study).
You can, of course, get a trade licence even if you do not meet these two points. However, then it will not be a secondary activity, but a main activity, and you will have to pay minimum social security and health insurance contributions right from the start of the business. Typically, this applies to distance learning and combined studies students at secondary schools, for example.
TIP: As a self-employed student, you can also benefit from the student tax credit. Your parent can also claim tax relief for a dependent child.
The conditions for setting up a student trade and how to choose a course of study
Have you decided to go into business? Think about what kind of trade you need before you visit the authorities. The conditions for obtaining a trade licence depend on this.
You have a choice of trades:
- reporting trades (this includes free, tied and craft trades);
The most common trades are free trades, which you can start operating soon after registering with the trade licensing office. You can choose from an extensive list of activities, including photography, marketing, graphic design, translation or retail, for example, for running an e-shop.
Obtaining a free trade is very simple - you just need to meet the following conditions:
- Full legal capacity (most often obtained by turning 18, evidenced by a valid ID card);
- good character (proven by an extract from the criminal record, which the authority will obtain itself; the sole trader must not have been previously convicted of a deliberate crime related to the business).
You can also start your business immediately in the case of trades related to a trade or craft, but you must also prove your professional competence (education or experience). For example, as a painter, accountant or hairdresser.
Licensed trades are a special category, for which you also need to obtain approval from the authorities. These include transport, taxi services or travel agencies.
We discuss what you need to do to obtain each trade in our article on trade conditions.
Setting up a trade - in person or remotely
The process itself is essentially no different whether you are a student or the trade will be your main activity. You declare your trade by submitting a single registration form (JRF), through which you will also let the health insurance company, the Social Security Agency and the tax office know about your business. You will pay an administrative fee of CZK 1,000.
If you decide to go to the Trade Licensing Office in person, you can go to any branch - for example, in the town where you are studying. The office staff will fill in the form with you and answer any questions you may have.
You can also apply for a trade licence remotely; you will then have to complete the form yourself. You can pay the administration fee by postal order or bank transfer.
And then what?
After registering your trade , you'll receive your business registration number and an extract from the trade register, which proves your right to do business. From the day you register your trade, you can issue invoices. Either an accountant can help you with this or use online invoice generators that even a layman can use.
In the first calendar year of your business as a student, you do not pay social security or health insurance. However, after the end of the calendar year, you are obliged to submit a tax return to the tax office. You must also submit your income and expenditure statements to your health insurance company and the Czech Social Security Administration. You will then have to pay the insurance premiums and tax, if applicable, according to the amount of your earnings. We discuss other obligations of sole traders in the article on taxes and levies for secondary activities.
Starting a business without worries
Setting up a trade is a big step for a student. And we will be happy to help you with it. We contact all the authorities for you and sort out everything you need. Get in touch with us via the contact form or visit us in the office.