Key Legal Obligations for Concierge and Luxury Lifestyle Management Firms

JUDr. Jakub Dohnal, Ph.D., LL.M.
JUDr. Jakub Dohnal, Ph.D., LL.M.
23.4.2026 | ARROWS law firm

Concierge agencies and luxury lifestyle management operate in a complex legal environment. They often underestimate the risks associated with personal data protection, employment law regulation, tax obligations, and contractual commitments. Safe operations require an understanding of the fundamental legal duties. This article will present key legal services and help you avoid the most common mistakes.

The photo shows a lawyer discussing the topic of key legal obligations.

Quick summary

  • Concierge agencies must correctly classify their workers under Czech law (and, where applicable, international rules) to avoid fines for illegal employment or breaches of tax obligations.
  • Protecting clients’ personal data under the GDPR and Czech legislation is mandatory; breaches may result in fines of up to EUR 20 million or 4% of worldwide turnover.
  • Contractual documentation, including client agreements and dispute-resolution tools, must serve as a prevention instrument rather than mere formalities—this is most often where ambiguities arise that lead to court disputes.
  • Professional indemnity insurance and liability insurance are essential; without them, the company may face an existential threat.

Legal status of concierge services and employment-law classification

Concierge agencies in the Czech Republic operate in a relatively unregulated environment. Unlike in some countries, there is no specific licence or register for concierge services. However, this means that general commercial and employment-law rules apply to them in full.

One of the most frequently overlooked issues is the correct classification of the individuals who work for the agency. Many concierge agencies engage workers under agreements to perform work (DPP) or agreements on work activity (DPČ), without a clear legal framework that would justify this classification.

Czech legislation, in particular the Labour Code (Act No. 262/2006 Coll., as amended), sets out general criteria for distinguishing between an employee and a person providing services under a contract outside an employment relationship. The assessment is based on the factual circumstances of the working relationship—especially whether the employer has the right to direct how the work is performed, whether the worker organises their own time, invests their own resources in the activity, or has the ability to work for multiple clients at the same time.

In practice, this means that if a person working for a concierge agency reports to it every day, takes instructions, uses company equipment, and cannot work for competitors, they are most likely de facto an employee. If such a person is formally engaged only under an agreement outside an employment relationship, the agency faces the following issues: unpaid social security and health insurance contributions for the employee, fines from the labour inspectorate and the Financial Administration, and potentially tax penalties and default interest.

Lawyers from ARROWS, a Prague-based law firm, can help you analyse these relationships and properly set up contractual documentation so that it reflects the real nature of the work and is understandable for supervisory authorities as well. When setting up DPP/DPČ arrangements, internal rules, and preventing the risks of illegal employment, it may also be helpful to rely on expertise in employment law.

Related questions on employing concierge staff

1. Can I hire a concierge worker as a freelancer without paying insurance contributions?
No. If the person works based on your instructions and directions, they are in fact your employee, and you are obliged to offer them an employment relationship or at least correctly pay social security and health insurance contributions. This is one of the most common mistakes we have to fix in practice. The practical impacts on records and monitoring of the remote-work regime are also summarised in the related text on recording working hours when working from home.

2. What are my obligations when I employ a worker for travel or introduce them to clients?
The same as for any other employee—proper records, insurance contributions, compliance with working hours and occupational health and safety. In addition, you must address travel allowances and insurance coverage in case of an accident abroad.

3. What if an employee travels abroad with a client? Is the law of the country we are going to applicable, or Czech law?
In general, the law of the country where the work is actually performed applies (the so-called lex loci laboris), but the employment contract should include a clear agreement on which law will apply to the employment relationship and what the insurance coverage will be. For posting employees abroad, it is necessary to arrange an A1 form (confirmation of affiliation to the social security system), which prevents double contributions. In cross-border situations such as choosing the applicable law, posting workers, and coordinating obligations in different states, support in the area of international law is typically also relevant. In these situations, lawyers from ARROWS, a Prague-based law firm, will help you reassess employment contracts, set up insurance coverage, and communicate with the Financial Administration and inspection authorities.

Personal data protection and GDPR

Concierge agencies and luxury lifestyle management services work with highly sensitive personal data. This includes not only the client’s name, address, and phone number, but often also their health data (allergies, health limitations), financial information (bank account details, value of assets), travel data, family composition, and potentially information about security measures at their property. It is precisely this scope of data that makes data protection critical in this sector. When setting internal rules and responsibilities for using automation/AI-based tools in working with client data, it may also be useful to consider AI governance in companies.

The key legal instrument is the General Data Protection Regulation (GDPR – Regulation (EU) 2016/679 of the European Parliament and of the Council), which applies to all agencies, including those not established in the EU, if they provide services to data subjects in the EU. GDPR breaches may result in fines of up to EUR 20 million or up to 4% of the company’s worldwide annual turnover, whichever is higher. These are astronomical amounts that can destroy a smaller agency.

Core obligations under the GDPR include: a clear legal basis for processing, information on processing provided to data subjects, security measures protecting data against unauthorised access, maintaining records of processing activities, transparency and predictability in any use of data, and in some cases carrying out a data protection impact assessment (DPIA).

In practice, this means that your client portfolio is not your property – it belongs to your clients, and you are only entitled to process it under the terms you have contractually agreed with them and which you must disclose in your data protection information (privacy policy). If you think you can sell your client list to competitors, or use it for unexpected marketing without their consent, you will face a fine. Likewise, if your client data leaks due to weak encryption or a security flaw, you bear legal liability for it.

Another common mistake agencies make is having data processed by providers (for example, in the cloud) without having a properly drafted data processing agreement in place. Under the GDPR, by signing such an agreement (referred to as a “Data Processing Agreement” or a “personal data processing agreement”), your provider becomes your processor and is bound by the same obligations as you. If you do not have the contract, or it is insufficient, you again face the risk of a fine.

The attorneys at ARROWS, a Prague-based law firm, can assist you with: preparing or reviewing a data processing agreement, meeting GDPR obligations including creating a privacy policy and information for data subjects, ensuring data security, handling requests for access to data or erasure, and, in the event of a data breach, also reporting the incident to the Office for Personal Data Protection (Úřad pro ochranu osobních údajů).

Practical steps when processing client data

When a new client uses your concierge service, they should receive information about how their data is handled. This information must include at least: who the data controller is (your agency), the legal basis for processing, how long the data is stored, what security measures are in place, and what rights the data subject has (right of access, rectification, erasure, etc.). This information is usually provided as part of the client agreement or as a separate document.

If you transfer data outside the EU (for example, if you have partners in the USA or elsewhere), you must ensure so-called adequate data protection. Under the current legal framework for 2026, key mechanisms for data transfers outside the EU include standard contractual clauses (SCCs) approved by the European Commission or mechanisms based on adequacy decisions (e.g., the EU-US Data Privacy Framework for the USA).

The list of countries with adequate protection is limited, and transfers to other countries require careful legal analysis and implementation of safeguards. This is a complex area where agencies often end up breaching the law without realizing it.

Risks and sanctions

How ARROWS can help (office@arws.cz)

Insufficient or incorrect information provided to data subjects

We will prepare or review your privacy policy and client information; we will ensure compliance with the GDPR and Czech law.

Incorrect legal basis for data processing

We will assess your processing model and set the correct legal basis; we will prepare the documentation.

Weak data security; risk of a leak or hacker attack

We will advise on security; we will help prepare security measures and secure cloud services.

Problem with transferring data outside the EU

We will put in place adequate legal transfer mechanisms (standard contractual clauses, adequacy decisions, binding corporate rules, etc.).

GDPR breach; request for access/erasure of data; risk of a fine

We will represent you in proceedings before the regulator; we will prepare the defence; we will negotiate regarding sanctions.

Contract documentation and dispute resolution

It is precisely in the area of contractual obligations and their enforcement that we see the most frequent issues with concierge agencies. The agency may have clients, but often does not have them covered by clear, legally binding contracts. In the event of a dispute, it is then unclear what was agreed and what claims each party is entitled to.

A typical case: a client orders a concierge service that includes travel planning, reservations, and purchases. The contract is unclear – it contains only general wording such as “we will do everything necessary.” When the agency then cannot deliver one of the requested services (for example, because the hotel is not available), the client believes this is a breach of contract and wants a refund. The agency, on the other hand, argues that given the circumstances it did everything within its power. Without a clear contract, no one is right.

A proper client agreement should include at least: a list of services included in the fee and those that are not, deadlines and timeframes for providing the services, the price and payment terms, the client’s obligations (for example, the obligation to pay on time), what insurance coverage applies and what the limits of the agency’s liability are (including exclusions), how disputes are resolved, and under what conditions the contract can be terminated.

The limitation of liability section is particularly important. An agency cannot afford to be liable without limit for every outage or mistake. Contractually, it can be agreed that the agency’s liability is capped at the value of the annual fee or another amount, or limited to certain types of damage (for example, that the agency is not liable for missed flights that are not its fault). However, this limitation must not be so absolute that it conflicts with the law – if, for example, you limited liability for harm to life or health, or for intentional misconduct, such a clause would be invalid because it is prohibited by law.

It is also important to clearly define which services are included in the fee and which are paid separately. The client should know that if they purchase an annual package for CZK 50,000 per month, this package includes, for example, 40 hours of work, travel consultations and hotel reservations, but does not include purchasing leather from exotic animals or arranging a private jet. If this is not clear, the dispute will be multi-directional and costly.

When resolving disputes, it is advisable to choose an out-of-court mechanism – typically mediation or arbitration. Court proceedings are expensive, slow, and public. Mediation involves negotiations led by an independent mediator who attempts to bring the parties together without issuing a legally binding decision.

Arbitration is a private legal process where the parties choose an arbitrator who decides the dispute finally and bindingly, and the decision is then enforced as if it were a court judgment. Both methods are faster and more discreet than public court proceedings – which is important for luxury agencies, as they do not want media attention.

The attorneys at ARROWS, a Prague-based law firm, can assist you with: preparing a legally binding client agreement that clearly defines the scope of services, price, obligations and liability limits; ensuring compliance with Czech legislation; reviewing existing contracts; preparing a dispute resolution mechanism; and, in the event of a conflict, also representation in mediation or arbitration.

Related questions on contractual relationships with clients and the service provider’s liability“

1. Do I need a written contract with each client, or is an oral agreement sufficient?
An oral agreement is legally binding, but in the event of a dispute it is very difficult to prove its content. A written contract is significantly safer for you and is the standard in this industry. Without it, you risk your client claiming something completely different from what you remember.

2. Can I stipulate in the client agreement that I bear no liability under any circumstances?
No. Czech legislation, in particular the Civil Code (Act No. 89/2012 Coll.), provides that certain areas of liability (especially personal injury or loss of life, or intentional breach of duty) are very difficult or impossible to limit. However, you can clearly define what you are not liable for (for example, delayed flights that you cannot influence) and set a cap on your liability for other types of damage.

3. What should happen if a client wants to withdraw from the agreement? Do I have to refund the money?
That depends on what your client agreement provides. You can agree on cancellation terms, including that within a certain period after the agreement is concluded the client is not entitled to a refund (if costs have already been incurred), and after that period the client cannot claim a refund. However, this must be clearly set out in the agreement and must meet statutory requirements for fair contractual terms, in particular those protecting consumers.

Insurance coverage and liability risks

One of the most serious risks in operating a concierge agency is the absence of, or insufficient, insurance coverage. This can expose the agency to an existential threat—if it takes on an expensive project (for example, organising a month-long stay for a VIP client) that fails and the client suffers significant loss, the agency may face a damages claim in the millions of Czech crowns. Without insurance, it would have to pay this loss from its own funds, which may lead to bankruptcy.

In the Czech Republic and generally in the EU, there are two basic types of insurance coverage that are relevant for concierge agencies:

  • Liability insurance (general liability) – this insurance covers liability for harm caused by the agency to a third party, whether property damage or bodily injury. Example: during a client’s travel itinerary abroad, your employee takes a valuable item from the client and it is stolen in the hotel lobby. The client makes a claim against you for reimbursement of the value. This loss should be covered by this insurance.
  • Professional liability insurance (E&O, Errors & Omissions) – this insurance covers losses arising from an error, negligence, or inappropriate advice provided by the agency in the course of its professional activities. Example: the agency recommended a specific hotel to the client without proper due diligence, the hotel had serious security issues, and the client suffered harm there. This liability should be covered by E&O insurance.

In practice, a concierge agency should have at least combined insurance coverage (general liability and professional liability) in an amount of at least CZK 1 to 2 million; the amount depends on the scope of activities and the size of a single project. If you work with VIP clients and plan expensive travel projects in the millions, the insurance coverage should be significantly higher—on the order of CZK 5 to 10 million or more.

A common mistake agencies make is arranging cheap insurance from a general insurer without realising that the policy does not cover concierge activities at all or only covers them partially. When an insurance claim is filed, the insurer then rejects it because the activity is not within the scope of the policy.

Another mistake is that the agency takes out insurance for itself but does not ensure coverage for its employees. If an employee acts on behalf of the agency and causes damage, that damage should be covered by the agency’s policy—this is usually part of the insurance package, but it needs to be verified.

The attorneys at ARROWS, a Prague-based law firm, can assist you with: analysing your current insurance policies and determining whether they include adequate coverage for concierge activities; recommending an appropriate level of insurance coverage; communicating with the insurer in the event of a dispute over policy interpretation; and, in the event of an insurance claim, representing you vis-à-vis the insurer.

Tax obligations and bookkeeping

Concierge agencies are individuals or legal entities that are required to meet all tax obligations typical for their legal status. This mainly includes income tax (whether the agency is an individual carrying out business activity or a legal entity), value added tax (VAT, if it is not considered an exempt person), and social security and health insurance contributions (if the agency employs people).

In the Czech Republic, the standard VAT rate of 21% applies to ordinary services, which means that if a client orders your concierge service for CZK 100,000 excluding VAT, you must invoice a total of CZK 121,000. You then remit the VAT to the state. It is important to report VAT correctly—if you are a VAT payer (i.e., you have turnover exceeding the statutory threshold), you should deduct input VAT on purchases (for example, employees’ travel expenses or office equipment). Proper VAT administration and duly issued invoices are critical in the event of a tax audit.

For employees, the social security and health insurance contributions mentioned above apply. Current rates, which may change annually, for example for 2026 are approximately: the employer pays around 24.8% for social security and 9% for health insurance from the gross salary; the employee then pays approximately 7.1% for social security and 4.5% for health insurance (these amounts are withheld by the employer from the employee’s salary). If contributions are not handled correctly, you may face significant penalties.

Situations can also be problematic where you hire an external provider, such as a photographer or an IT specialist, to carry out a specific project. If you in fact manage and control their work, there is a risk that this is disguised employment and you should have them as an employee rather than an external contractor. Again, this is a common mistake that the tax authorities and the labour inspectorate penalise rigorously.

Especially for agencies that have clients abroad or that themselves operate cross-border, it is important to understand tax obligations in different jurisdictions. If you provide services to an Italian entrepreneur from the Czech Republic, you need to clarify what tax applies to you, what double taxation treaties exist, and what obligations you have when reporting income from foreign clients. This is a specific area where it is very easy to make a mistake and later face a tax audit.

The attorneys at ARROWS, a Prague-based law firm, can assist you with: setting up your agency’s tax and accounting system; advice on VAT structure and rates; ensuring compliance with social security and health insurance legislation; addressing employment and external contractor issues; tax planning; and, in the event of a tax audit, representing you vis-à-vis the Financial Administration.

Related questions on accounting, taxes, and international obligations

1. Do I have to keep full accounts, or is tax records bookkeeping sufficient?
That depends on your legal form and size. If you are an individual (self-employed) without employees and your annual turnover does not exceed a certain threshold, you can keep tax records. Once you have employees, are a VAT payer, or exceed the turnover cap, you should switch to full accounting. Attorneys and accountants can help you decide on the correct form.

2. What if I take on foreign clients? How will that affect my tax obligations?
Income from foreign clients is generally also subject to Czech taxation. If you have clients in different countries, there may be double taxation treaties that ensure you do not pay tax twice—once in the Czech Republic and once in the client’s country. This area is complex and you should clarify it with your tax adviser or attorney.

3. If I take an employee on a trip abroad, can I pay them without social insurance contributions?
No. Social security and health insurance contributions are paid in the Czech Republic for as long as the employee remains insured under the Czech system, even if they work abroad. There are certain exceptions and transitional regimes for employees working abroad on a temporary basis (e.g., secondment and obtaining an A1 form), but as a general rule, insurance contributions are mandatory.

Employee security and oversight

Although this may not be a legal topic in the traditional sense, overseeing and managing the security of employees who work with clients’ sensitive information is legally relevant. Concierge employees often have access to clients’ homes, know their travel plans, their financial situation, personal data, and secrets.

Concierge employees often have access to clients’ homes, know their travel plans, their financial situation, personal data, and secrets. If an employee misuses this information (for example, sells a client list to a competitor, or steals something from a client’s home), you face both criminal liability (you may be prosecuted for breach of a duty of care you were required to exercise) and property liability towards the injured party – the client who trusts you.

In practice, this is a so-called “insider threat” – a threat from your own employee. To defend against it, the agency should have: clear procedures for checking employee records (screening, references, etc.); clear rules on access to information (not all employees need to see the full list of clients); physical measures (locked offices, secure storage, etc.); IT security (encrypted communication, strong passwords, regularly updated software, etc.); and appropriate insurance coverage against this risk.

Attorneys from ARROWS, a Prague-based law firm, can assist you with: preparing and reviewing internal security rules and policies; legal risk analysis; preparing employee agreements that include prohibitions on misuse of information and confidential matters; and representation in the event of a security incident.

Specific risk: Cross-border operations and international elements

Many concierge agencies operate with international elements – they have clients in different countries, or they themselves provide services abroad (travel, flights, accommodation outside the Czech Republic, etc.). This means the agency must handle the legal requirements of more than one jurisdiction.

If you have a client in Italy for whom you book accommodation in Tuscany and something goes wrong, proceedings may be initiated before an Italian court, under Italian law, with an Italian lawyer – which brings a range of complexities and costs. That is precisely why it is recommended that contractual documents include a so-called “choice of law” clause – an agreement on which law will apply (usually Czech law, so the agency maintains legal certainty) – and a “jurisdiction clause” – an agreement on in which country and before which courts disputes will be resolved. These clauses are governed by the rules of private international law.

Another risk is the question of insurance coverage abroad. If an agency employee travels with a client to America and an accident occurs there, is your agency’s insurance policy also valid in the USA? Usually yes, but the details vary and need to be verified with the insurer, or you may need to arrange extended territorial coverage.

Attorneys from ARROWS, a Prague-based law firm, thanks to the ARROWS International network, have access to lawyers in various countries who can help with legal issues in those jurisdictions. If you therefore need advice on how to proceed in the event of a dispute in Italy or the USA, or you want to ensure proper insurance coverage and legal protection for cross-border operations, ARROWS attorneys can help you coordinate the approach with local experts.

Potential issues

How ARROWS helps (office@arws.cz)

Unclear legal obligations in individual countries; breach of local laws

We will assess your activities in each country; ensure compliance with local law; prepare recommendations.

A dispute abroad; you do not have a lawyer in the given country; you do not know local law

We will represent you or communicate with local lawyers through the ARROWS International network; ensure an effective resolution.

Insurance coverage is not valid abroad; risk of financial loss

We will review your insurance package; advise on extending coverage; communicate with the insurer.

Data transfers between countries; breach of GDPR in a cross-border context

We will ensure a legal basis for transfers; set up secure mechanisms; communicate with regulators (the Czech Data Protection Authority – Úřad pro ochranu osobních údajů – or supervisory authorities in the EU).

Final summary

Operating a concierge agency or luxury lifestyle management services is a complex activity that requires a systematic understanding of the legal environment. While it may seem that the main question is how to market the service and how to acquire clients, the truth is that legal issues often determine whether an agency survives or fails.

Employment-law classification of workers, personal data protection under GDPR, contractual documentation with clients, insurance coverage, and tax obligations – all of these areas involve specific risks that you must not overlook. If you do not master them and do not get help with them, you will face fines (which can reach hundreds of thousands or millions of Czech crowns), court disputes (which will cost you time and money), or an even worse situation – a more demanding client chooses you and your agency runs into trouble.

Attorneys from ARROWS, a Prague-based law firm, are well versed in these matters and know the most common pitfalls and how to avoid them. We will help you analyse your legal situation, prepare or review contracts, secure insurance coverage, address tax issues, and represent you in the event of a dispute or an inspection. We have experience with concierge agencies, luxury management, international elements, and crisis management. If you want to avoid costly mistakes, contact us: office@arws.cz.

FAQ - Frequently asked questions on the legal aspects of concierge agencies 

1. What are the most common legal issues you deal with for concierge agencies?
Most often, we encounter incorrect classification of workers, missing or insufficient insurance coverage, and missing or poor-quality contractual documentation with clients. All three areas lead to significant financial and legal problems. If you want to get an overview of your situation, you should have them reviewed. Contact us at office@arws.cz.

2. What insurance coverage is essential for a concierge agency?
At a minimum, a combined liability for damage and professional liability (E&O) policy, with coverage of at least CZK 1 to 2 million, and higher if you work on more expensive projects. It should clearly state that it covers concierge activities and that it also applies to your employees. If you are not sure, contact us – we will review your policy and advise on the correct setup. 

3. What should a client contract include?
It should clearly define the scope of services (what is included and what is not), the price, deadlines, the client’s obligations (including the obligation to pay on time), insurance coverage and the agency’s liability limits, the dispute resolution process, and the terms for termination of the contract. The contract should be written in a clear manner, but with proper legal precision. ARROWS attorneys in Prague can assist you with drafting or reviewing it – office@arws.cz.

4. What should happen if an incident occurs—for example, an employee steals a client’s property, or there is a personal data breach?
First and foremost, proceed calmly and systematically. A security incident report (including a personal data breach) must be submitted to the regulator (the Office for Personal Data Protection) within 72 hours under the GDPR. If it involves a criminal offence (theft), you should report it to the police. You should also inform your insurer immediately so that it can start investigating the insured event. At such a moment, it is very important to have a high-quality lawyer who will guide you through the process. ARROWS attorneys in Prague specialize in handling exactly these types of crises – office@arws.cz.

5. How do the obligations differ if I take on foreign clients?
Foreign clients are usually also subject to GDPR regulation (if you are a provider established in the EU), so you must comply with the same data protection standards. From a tax perspective, the rules of the country where the client is resident apply, but your income is also taxable in the Czech Republic. Contractually, it is advisable to ensure that any dispute is resolved under Czech law and in the Czech Republic. If you have a specific foreign client, you should clarify the legal situation. 

6. If the agency becomes insolvent, are my personal assets at risk?
That depends on your legal form. If you are a natural person (self-employed), you are liable for business obligations with all of your assets. If you are a limited liability company (e.g., an s.r.o.), your liability is limited up to the amount of any unpaid registered capital contribution—creditors can reach your personal assets only in certain cases (e.g., a breach of directors’ duties). This is one of the reasons why, for agencies with a larger volume of activity, it is advisable to choose the legal form of an s.r.o. ARROWS attorneys in Prague can help you decide on the right legal structure – office@arws.cz.

Notice: The information contained in this article is of a general informational nature only and is intended for basic orientation in the matter, reflecting the legal state as of 2026. Although we take maximum care to ensure accuracy, legal regulations and their interpretation evolve over time. We are ARROWS, a Prague-based law firm, registered with the Czech Bar Association (our supervisory authority), and for maximum client protection we maintain professional liability insurance with a limit of CZK 400,000,000. To verify the current wording of the regulations and their application to your specific situation, it is necessary to contact ARROWS directly (office@arws.cz). We accept no liability for any damages arising from the independent use of the information in this article without prior individual legal consultation.

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