Thinking of Pausing or Cancelling Your Czech Trade License? Here’s What You Need to Know!

With the upcoming end of the year, a lot of trade license holders decide to pause or cancel their trade license. It is the ideal time to do so since the monthly payments generally go up every year on Jan 1 (see the 2026 changes in this article). It is also tactical from the Tax Return perspective.

This article explains what it means to pause, suspend, or cancel (terminate) your trade license, what the legal steps are, and how this decision interacts with Czech residence and tax obligations.

What Are Your Options?

If you no longer want to use your trade license, you can generally either pause it (so it is easy to reactivate it later) or completely cancel it.

🟡 Pause / Suspend Your Trade License

Pausing your živnost means you temporarily stop the activity, without cancelling the whole license. You can pause the trade license for a specific amount of time (i.e. during summer for teachers) or for unlimited amount of time (basically until the same day of 2099).

This can be useful if:

You’re taking a break from freelance work
You’re switching to an employment contract (although you can have both employment and trade license at the same time as we explain in this article: Employment vs Self-Employment in Czech Republic – Can You Combine These?)
Your earnings are too low to justify high insurance advances
You plan to return to freelancing later

🔴 Cancel / Terminate Your Trade License

Cancelling means you end your self-employment permanently (for now). You can get the trade license later on again, it will just require a completely new set of documents and going through the whole trade license process again from scratch.

This is suitable if:

You are leaving self-employment for good
You are switching to a different visa type (e.g., Employee Card) – although you can still combine an employee card and trade license
You are leaving the Czech Republic

Both options have legal procedures and consequences — and they are not identical.

How to Pause (Suspend) Your Trade License

To pause your trade license:

Go to any trade license office and request the suspension – although you can potentially do it via data box, we do not really recommend it since it usually takes longer and you have lower control about the process.
Collect the suspended trade license – it usually takes a few days.
Go pause all subsequent registrations – social security, health care and income tax – these do not happen automatically so you must make sure all your accounts are properly canceled/paused. You should also request the final statements showing if/how much you owe the respective authorities.

Important considerations when pausing trade license:

Suspension does not remove past obligations — you may owe back payments if advances were not paid.
You must still do your tax return next year.
Unless you switched from self-employment to employment, you lose your health care coverage when pausing the trade license.
You can not invoice anyone after the trade license is paused – you have to issue all your invoices before you pause the trade license.
You still have to keep an active business address for the suspended trade license.

Pausing your trade license can reduce your monthly obligations — especially if you have no clients currently — but it must be done before the end of a month otherwise you’ll still owe for the next one. For example, even if you close your trade license on Jan 2, you might still need to pay full monthly contributions for Jan since your trade license was active in that month.

IMPORTANT: If you paused the trade license for a specific amount of time (i.e. 2 months, 3 years), it will automatically re-active after the set date. Make sure you remember the re-activation date! If you want to keep your trade license pause for longer period of time, you have to go extend the suspension. Or simple pause it for “unlimited” period and reactive it only when you decide.

TIP: Move To Prague can take care of all these processes completely on your behalf without you needing to go anywhere. Contact us for more details.

How to Cancel (Terminate) Your Trade License

Cancelling your trade license permanently basically follows the same process as it’s suspension. What is different is that you do not need to keep an active business address. On the other hand, if you decide to get into freelancing again, you will need to go through a completely new process of obtaining the trade license – including getting a fresh criminal check if you are not an EU citizen or a permanent residence permit holder.

TIP: Move To Prague can take care of all these processes completely on your behalf without you needing to go anywhere. Contact us for more details.

What Happens to Your Visa / Residence Status?

If you are an EU citizen, pausing or canceling your trade license does not really influence your legal status in the Czech Republic.

If you are a non-EU citizen your residence permit is tied to your business activity (for example, through a Business Visa or Business Residence Permit), you’ll need to adjust your immigration strategy. Once you pause or cancel your trade license, you stop fulfilling the purpose of your stay.

Although that might be fine temporarily, it will not work in the long run.

If your visa or residence permit is tied to your trade license, pausing it or canceling it is only recommend if:

your visa/residence permit expires soon or you cancel it along with your trade license – if your visa for example expires in January and you know you will not be staying in CZE after that, canceling your trade license in December will make matters easier for you and it will not influence your current or future visas,
you are switching the purpose of your stay – if you have been in CZE under a business visa, then you found employment and you are now switching to an Employee Card, canceling/pausing your trade license is also relatively safe, although we would recommend keeping it active until you get the employee card approved,

📩 CAUTION: Don’t risk your residence or future status — if your residence permit is tied to your trade license, consult any changes with us before you actually make them. It is easier to prevent immigration mistakes than fixing them 🙂

Common Questions

Can I pause my živnost and still live in Czech Republic?
Yes — no problem at all if you are an EU citizen or permanent residence permit holder. If you are a non-EU citizen, this can only work if your visa or residence permit is not tied to your trade license.

What if I cancel my trade license but later want to return?
You can register a new trade license anytime — but the process resets and your obligations start over.

Do I still owe insurance if I cancelled?
Yes — you must settle outstanding advances or risk penalties.

How Move To Prague Helps

We have been helping foreigners with their Czech immigration and trade license related matters since 2012. We can take a complete care of:

pausing or canceling your trade license,
finding out your standings with social security, health care and tax offices to make sure you are all good and there will be no unpleasant surprises in the future,
preparing your tax returns,
helping you switch to a different visa or a residence permit.

📩 Reach out to us if you have any questions about your situation, canceling your trade license or anything else. Happy to advise 🙂

Move To Prague – AMAZING EXPERIENCE. EVERY TIME.

Thinking of Pausing or Cancelling Your Czech Trade License? Best Time Is Now!