July 25, 2016

Working Contract or Trade License?

Working contract or trade license – get the one which suits your needs! (Part 1)

In our previous articles, we discussed how to work legally in the Czech Republic as an employee of a company and how to get a trade license and become self-employed. However, what is the best option for you? In order to make an informed decision, you may find useful few facts about employment and self-employment as well as my personal experience with clients that confront Expat Care.CZ with this very question.

The article is more dedicated to non-EU citizens. EU citizens may enter the Czech job market under the same conditions as Czech citizens, i.e. they may travel here freely, search for a job, get employed, and stay even when their working contract has expired. Similarly, they can also apply for a trade license and start working as freelancers.

For non-EU citizens, the decision between employment and self-employment is more crucial since it determines the type of visa the person concerned will apply for. If you decide to find an employer in the Czech Republic, you will need an Employee card (or the EU Blue Card if you are a highly-skilled worker). If you decide to work in the Czech Republic on a self-employed basis, you will first need to obtain a trade license and then apply for business visa. Let’s take a closer at Employment in this Part 1 of my article. In Part 2, I will address the Self-employment (trade license).

“In short, the process of obtaining an Employee card is more time-consuming than in case of the trade license.”

In order to obtain an Employee card, you first need to find an employer because the card is issued for a specific job position. The employer has to advertise this position in the central register of job vacancies for employee card holders (or Blue Card holders). If the job position cannot be filled within 30 days by an EU-national, and the employer wishes to employ you, you can apply for an employee card based on the reference number assigned to this specific position. The working contract between you and the employer is also a part of the employee card application. You need to apply at the Czech embassy abroad and the whole process takes by law 60 days or 90 days in especially complicated cases. The employee card is issued for the period of your working contract, generally for 2 years because this is its maximum validity. Nonetheless, it is, of course, possible to renew the card on the territory of the Czech Republic after two years if you still have an active working contract. It is very important to note that the Employee card allows you both to work legally and to stay legally in the Czech Republic, and therefore you do not need to apply for any other visa or work permit.

Photo: Pixabay.com

In short, the process of obtaining an Employee card is more time-consuming than in case of the trade license as will be discussed in part 2 of this article, however, once you obtain the card, you do not need to worry about immigration matters for a relatively long period of time – by law, application for extension of validity can be filed no sooner than 120 days and no later than 30 days before expiration of the validity of the current one. In the meantime, you just need to make sure that you respect the rules of your working contract.

“Once you start working, you receive a monthly salary and therefore have a guaranteed income, and also do not need to worry about health insurance and social security insurance because all of this is concern of your employer.”

In practice, it may be quite challenging for you as for a non-EU citizen to get in touch with an employer (you can stay in the EU for 90 days and depending on your nationality you may require short-term Schengen visa for that) – a lot will be probably done via internet rather than via personal meetings which puts you into slight disadvantage. On the other hand, if you have the skills that are desired by the company, the employers are generally keen to wait for you until your immigration issues are resolved. Once you start working, you receive a monthly salary and therefore have a guaranteed income, and also do not need to worry about health insurance and social security insurance because all of this is concern of your employer.

In contrast, trade license is generally much more straightforward to obtain, however, it is issued for 6 months up to 1 year and you need to prove the Czech authorities that you are actively freelancing in order for your visa to be renewed. Similarly to employment, working on a trade license also has its advantages and disadvantages that need to be taken into account. More about trade license and business visa in Part 2 of my article.

Still not sure? We can offer advice on Employee cards, Blue cards, trade licenses and much more. If you would like to discuss any related issues, please do not hesitate to contact Expat Care, relocation and immigration agency.