The Czech Republic is one of the best countries in central Europe for starting a freelance business. Many freelance skills are in high demand, and skilled freelancers can earn a substantial income.
To become a freelancer in the Czech Republic, you'll need to go through the proper channels to ensure that your business is legal and that you're meeting all of the requirements. Read on to learn how to open a business in the Czech Republic and get your freelance career on the right track.
What It's Like to Work as a Freelancer in the Czech Republic
While many countries in Europe are still in the developing stages of their freelance economies, the freelance market is quite advanced in the Czech Republic. If you have the required skills (such as copywriting, graphic design or social media management), then you'll be able to find a lot of Czech businesses that will be happy to hire you for your services. You'll also be able to find clients in Europe and the rest of the world.
As you grow in experience and become an expert in your field, you'll be able to ask for significantly higher rates and work for top-level clients. You can continue to grow your business and enjoy a sustainable income.
While almost every type of freelancing is in-demand in the Czech Republic, some markets will pay more than others. If you have expertise in programming, development, design, digital marketing or business consulting, you'll be able to earn the highest. Other skills like copywriting, graphic design and virtual assistant also pay well but aren't the most profitable.
The cost of living in the Czech Republic is considered to be affordable, especially compared to some countries in Western Europe. You'll be able to make enough income to cover your budget, even if you aren't yet getting the top jobs.
How to Register to Work as a Freelancer in the Czech Republic
If you wish to freelance in Czech Republic, you'll need to get a Trace License, also known as a Živnostenský List. A Trade License will give you a tax ID so that you can pay taxes and social security. The Trade Licencing Act covers 80 different trades, and most freelancing services fall under the Act.
Obtaining a Trade License is relatively straightforward. You'll complete a form and turn it in at a public administration contact point or online. You may need to include a few extra documents. If you're from another country and not a permanent resident of the Czech Republic, you'll need a criminal record statement. If your business requires qualifications, you'll need to submit documentation. You'll also need to include documentation if you work outside of your home.
The registration fee is 1.000 CZK. Once you've applied and paid your fee, you can immediately start earning. You'll also need to register with Social and Health Insurance.
If you aren't a permanent resident, you'll also need to acquire a work visa. There are a few steps involved in getting a visa, so be sure to start right away.
How Much Does It Cost to Become a Freelancer in the Czech Republic?
There are some costs associated with being a freelancer in the Czech Republic. You'll be expected to pay income taxes. You'll pay 15% of your income if it's lower than 1 867 728 CZK and 23% if it exceeds it. Income tax is due once a year. You'll also make monthly payments to social security and health insurance.
You'll also be required to pay VAT (value-added taxes). You'll need to register with the EU to get a VAT ID number. VAT is either added at purchase or worked into your pricing system, depending on how you want to do it.
VAT fees for freelancing are typically the Standard Rate, which is 21%. There are Reduced Rates of 15% and 10%, but very few of the items listed would be sold as a freelance service. There's also a 0% rate, but nothing covered by freelance services.
In the Czech Republic, you're responsible for keeping up with all VAT payments and paying them quarterly. If you don't pay all VAT fees, you'll be required to pay when you file your income taxes. Xolo's guide to VAT has detailed information about how to register and report VAT as a freelancer in Czech Republic.
How to Get Paid and Invoice as a Freelancer in the Czech Republic?
Once you've completed a freelance job, it's time for the fun part - getting paid. After submitting your work and getting approval, you'll need to send an invoice to your client. As with other EU countries, the Czech Republic has a specific policy in place for invoicing.
You'll have to include the date issued (which must be within 15 days of the tax date) and put a unique number on each invoice. Numbers should be sequential. Include the VAT number and address for you and your client. You'll need a description of the services/goods provided along with the net cost and the VAT rate.
Tips to Start a Freelance Career in the Czech Republic
If you want to become a freelancer in Czech Republic, follow these tips to optimize your chances of success.
First, be sure to choose a niche or area of expertise. Don't market yourself as a generalist. As an expert, you'll attract clients who are looking for quality work.
Prague is a great place to live if you're freelancing in the Czech Republic. There are events throughout the year where you can meet other freelancers to network and share tips. There are also many spaces to rent for coworking.
Just because you open a business in Czech Republic doesn't mean you have to do all of your business with Czechian clients. With your VAT identification, you can easily work with clients throughout the EU.
If you don't already speak Czech, it makes sense to learn some basics. While most people speak English, you'll be able to communicate with more clients if you have a grasp of their native language.
How to Launch a Business as a Freelancer in the Czech Republic
Follow these steps to launch your freelancing business in the Czech Republic so that you can be successful and legally compliant:
- Decide what type of goods/services you'll sell. Make sure that it's something that's in-demand. Draft a simple business plan with a statement of what you do and what you'll charge. Describe your target market. Come up with concrete goals for your business.
- Ensure that you meet any professional requirements and have all necessary qualifications for your selected business.
- Acquire a Trade License and VAT number. Register to pay Social Security and insurance. Pay all administrative fees. If you're not a permanent resident, obtain a visa to work in the Czech Republic.
- Set up methods for managing expenses, invoices, income taxes and all other business finances.
- Create a website and social media accounts for your business. Develop a marketing plan to sell your services.
- Join local and online freelance groups for networking and tips.
- Get clients and continue to grow your business.
When starting a freelance business in the Czech Republic, Xolo Leap can help you establish e-Residency in Estonia, gaining you access to the EU market. You can live wherever you like while running your business. Xolo Leap also helps with managing your business through VAT-compliant invoicing, paying income taxes and more.
Become and Work as a Freelancer in the Czech Republic
Working as a freelancer in the Czech Republic can be a great way to supplement your income or can even be a full-time career. The country is a great place to live and work and has an active community of freelancers. When you put the proper thought into your business and follow all legal requirements, you'll increase your chances of success. With Xolo Leap, you can start a business in the EU market while having the freedom to live anywhere in the world.
