At the end of 2009 the deadline expired for EU Member States to implement Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market.
The process of screening Czech legislation led to the adoption of two transposing laws. These are the framework Act No 222/2009 on the free movement of services and the so-called Amending Act No 223/2009 amending certain other acts.
Free Movement of Services Act:
- defines the general principle of cross-border service provision, making it substantially easier for Czech service providers
- to provide services to other EU Member States without opening registered offices in those countries.
- It defines the general conditions for the permit regime applying to service providers based in the Czech Republic, including the ban on discrimination, suitability, necessity, the ban on a territorial restriction on the validity of a permit, the issuing of permits for an unspecified period and so on.
- It also introduces administrative cooperation between the offices of individual Member States (recognition of documents, recognition of mandatory insurance). The documents required from a service provider from another EU Member State may thus be submitted to the adminstrative body only in the form of a copy with an unverified translation. Verification of the document is then made possible by the Internal Market Information system (IMI).
- This brings administrative simplification and protection against the inactivity of administrative bodies in the Czech Republic through the horizontal introduction of the principle of "tacit consent" into Czech law. It involves the so-called creation of authorisation through expiry of a deadline.
It enshrines the establishment of Single Points of Contact (SPC) and defines the information and services they provide. The role of Single Point of Contact is performed by fifteen selected municipal trade licensing offices. An electronic SPC has been established on the BusinessInfo.cz portal.
- The Amending Act amended 36 acts: one of the most important amendments was to introduce the procedure of tecit consent, the introduction of authorisation for an unlimited period of time and the possibility to extend authorisation automatically. In all cases, a time limit has been established for the authorising body to handle applications.
- the age limit has been removed from authorisation processes in which this restriction was not justified, a legal right to the issuing of an authorisation after fulfillment of all the legal requirements has been introduced in some cases, and the requirement for permanent residence in the Czech Republic has been scrapped.
Types of services
A service is any kind of gainful activity provided in return for a payment. The EU Treaty further specifies services such as actions provided for a payment if they are not regulated under the provisions on the free movement of goods, capital and persons. Services include:
- activities of an industrial nature,
- trading activities,
- skilled activities and activities in the area of the liberal professions (such as, for example, provision of legal services, repair work, painting work or advertising).
Different ways of providing services
The period of time for which a company may provide cross-border services without setting up an office in the host country is not precisely defined.
A business owner may provide the service in person or may post employees of the company to another EU country. In both cases some common principles apply:
- In the case of temporarily posted workers, or the activities of self-employed persons for up to 183 days in the accounting year, the company pays income tax in the country in which the company has its head office.
- If the period of time exceeds 183 days, the company pays income tax in the target country, at a tax office in the place where the order was drawn up.
- The total period of activity in the host country should not exceed one year, or, in exceptional cases, two years. Otherwise, the company becomes liable for registering for social security and health insurance payments in the host country, whereas up to that time such contributions are paid in the country of origin.
- In some cases, and depending on the relevant treaty on the prevention of double taxation, the company might need to establish an organisational unit in the host country.
Rights of service recipients
Following implementation of the Directive, service recipients will have the right to a range of information connected with the provision of services (e.g. name of provider, commercial terms, cost of service etc.) and discrimination against recipients will be forbidden.
Useful information on the labour market is available on the following links:
"Single points of contact"
Businessmen wanting to provide services in the Czech Republic (regardless of whether they are Czech nationals or foreigners) may use the services of the so-called single points of contact (SPC).
Single points of contact (SPC) were established under the Services Directive as information points for entrepreneurs in the single market of the European Union (EU).
In addition to information relating to starting a business in the Czech Republic (e.g. requirements for issuing a business licence, the obligation to pay administrative fees, mandaory insurance etc.) The SPC also provides you with general information on doing business in other Member States of the EU and the EEA. You can also obtain information on consumer protection and information on extra-judicial dispute resolution. You can also turn to the SPC when addressing specific problems with an authority of another EU Member State.
An electronic SPC has been set up in the Czech Republic as well as 15 physical SPCs, which operate in municipal trade licensing offices in regional government offices.
At the electronic SPC you can find general information on doing business in the Czech Republic, as well as an overview of more than 180 business activities ordered by area or alphabetically. They provide a step-by-step guide to obtaining a business licence, and they also provide all the necessary forms.
An important role of the SPC network is to forward applications for licences in the area of services to the relevant offices - the permit-issuing bodies. It is no longer necessary to look for the right office to contact for licence applications, or to waste time finding out about the necessary attachments, etc. All you need to do is select the desired activity, download the relevant form, fill it in, sign it with a digital signature and send it off. The forms can also be printed, signed and physically delivered (by mail or in person) to an SPC, which will itself arrange delivery to the relevant office.
If you have any queries about doing business, you can contact SPC staff directly through the web interface:
The obligation of service providers in regulated trades to notify.
A natural person, temporarily and occasionally providing services in the Czech Republic in activities which, by their nature, belong to the skilled, restricted and concession trades, must make a written notification of the provision of services to the recognition authority, which is the Ministry of Industry and Trade, before commencing the pursuit of any regulated activity in the Czech Republic.
For legal persons temporarily and occasionally providing services similar obligations apply.
With the accession of the Czech Republic to the EU, European law on social security began to apply in the Czech Republic.
This means that the laws of individual Member States continue to apply as well as the European coordination regulations, which take priority over national legal arrangements, ensuring their mutual cohesion.
Proof of qualifications
Information relating to the recognition of professional qualifications and the issuing of professional qualification certificates.
The following governmental and non-governmental institutions and web portals offer further information related to providing services in another EU country and exports in general.
Useful information on the labour market is available on the following links:
Overview of programmes and projects providing support for the provision and export of services: