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Home » Archives » Business

State to cut trade licenses by half

Bill reduces paperwork, simplifies biz start-ups

By Victor Velek
Staff Writer, The Prague Post
October 31st, 2007 issue

Long advocates of streamlining bureaucracy, the Civic Democrats, the governing coalition’s majority partner, hope that a new bill will take another step toward freeing businesses from the shackles of paperwork.
Such efficiencies are at the heart of the trade-licensing bill, which the Cabinet passed Oct. 22. The bill is one of the most important laws on the government’s agenda, according to Prime Minister Mirek Topolánek.
“Together with the public-finance stabilization measures already signed into law, the new trade-licensing law has the absolute most importance,” he said after moving the bill to Parliament. If passed, the law would come into effect July 2008.
Advocates of the law say it is a necessity to improve the country’s business environment. Currently, the Czech Republic features one of the most bureaucracy-ridden business climates in the European Union, according to the most recent Doing Business report, published by the World Bank.
The bill will address three main areas: cutting the number of recognized trades, reducing administrative burdens on businesses and simplifying the process of starting a business.
“Today, there are 261 trades regulated one way or another by the state, which is the highest number in the whole European Union,” said Industry and Trade Minister Martin Říman. “We are about to decrease that number from 261 to 96.”
While the measure will reduce the number of all types of trades, the most radical cut awaits free trades, businesses that are independent of specific regulation, such as education. Instead of the current 125 free trades, the bill introduces a single free trade, Říman said.
This should be welcome news to people looking to start multiple businesses listed as free trades, which then require multiple trade licenses. This increases paperwork for entrepreneurs and costs money, since every license requires a fee of 1,000 Kč ($53).
The law will also make the state administration more helpful, as entrepreneurs won’t be bound to work with the Trade Office at their place of residence, and will instead be able to use any of its offices in the country.
Starting a business will also be less painful, as the registration form will shrink to two pages from its current 21, Říman said.
Entrepreneurs welcome the bill but say more measures of this kind are needed, as the law only partly improves the climate.
“The new trade-licensing law is a good measure since it will cut paperwork,” said Bedřich Danda, head of the Association of Entrepreneurs and Tradesmen.
The only flaw of the law is that for some professions it cancels the work experience required to register as a bricklayer, for example, and instead only requires educational experience, said Viktorie Plívová, spokeswoman for the Economic Chamber, which was a partner in drafting the law.
“This requirement was well-founded,” she said. “I doubt that a person with a fresh vocational certificate is able to run his or her business right away.”
According to Plívová, there is still much work ahead to make the country truly business-friendly.
Annually, businesses spend 86 billion Kč on paperwork and communication with state authorities. The bill will help to curb this figure, but the fight for better conditions must not cease here, she said.

Victor Velek can be reached at vvelek@praguepost.com


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