You've got a trade license, right? Explaining why the 'Švarc' system rules in Czechia

Czechia hits a record 1.182M self-employed, but experts warn the rise is driven by a controversial loophole not a true startup boom.

Elizabeth Zahradnicek-Haas

Written by Elizabeth Zahradnicek-Haas Published on 11.11.2025 12:30:00 (updated on 11.11.2025) Reading time: 3 minutes

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Shutterstock by Pressmaster
Shutterstock by Pressmaster

Czechia is in the midst of what officials describe as an “entrepreneurial boom,” with new data from the Czech Social Security Administration (ČSSZ) showing a record 1.182 million self-employed people registered in the country, a jump of 27,000 in the first three quarters of this year alone.

Despite the historic numbers, experts warn the surge does not reflect a wave of innovative startups but the expansion of the controversial Švarc system, a form of disguised employment that allows companies to slash labor costs at the expense of worker protections.

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The spike is most visible in Prague, which, according to the ČSSZ holds the highest concentration of these self-employed individuals, and in sectors dominated by micro-businesses with fewer than 10 employees, companies that make up more than 95 percent of all Czech enterprises.

The sharp rise in registered self-employed individuals, therefore, points less to a flourishing entrepreneurial climate and more to an alarming structural problem within the Czech labor market.

#careers #daily news #jobs #work #working in Czechia
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