Certificate of temporary residence (not compulsory)
In general, it is not necessary to request the certificate of temporary residence. The Icelanders can request the certificate if they intend to stay in the Czech Republic for more than 3 months, and have not threatened state security or seriously disrupted public order. There are certain cases in which the certificate of temporary residence is necessary, for example, a car registration or application for a loan or mortgage at the bank. The applications for the certificate of temporary residence are administered by the Ministry of the Interior. Find out more about application requirements on: https://www.mvcr.cz/mvcren/article/temporary-residence.aspx
An Icelandic citizen automatically acquires the right of permanent residence in the Czech Republic if they have resided there legally for a continuous period of 5 years. In some specific cases, they may be eligible to apply for permanent residence before 5 years. For example, if an Icelander retires and has worked in the country for the last year, or has lived there continuously for 3 years. If an Icelander meets these conditions, they can apply for a permanent residence document, which confirms their right to live in the country where they now live permanently, without any conditions.
Upon grant of a permanent residence, an Icelander no longer has to fulfil the requirements for long-term residence - they cannot be regarded as a disproportionate burden on the public finances, even if they are entirely dependent on Czech social security system. They may use health services (public health insurance) and social services the same way as a citizen of the Czech Republic.
Continuity of residence is not affected by a temporary absence in the Czech Republic (less than six months a year), or a continuous absence in maximum of 12 months for important reasons (pregnancy, serious illness, study, etc.), or military service. A resident can lose their right to permanent residence if they live outside the country for more than 2 consecutive years.
Permanent residence permit (not compulsory)
The permanent residence document is not compulsory, but it can be useful when dealing with the authorities or for administrative formalities. The authorities may no longer require you to prove that you have a job, sufficient resources, health insurance, and so on. The application for permanent residence can be submitted at the offices of the Ministry of Interior of the Czech Republic. Find out more about application requirements on: https://www.mvcr.cz/mvcren/article/eu-citizens-and-their-family-members-permanent-residence.aspx
The right to enter and reside in the territory of Czech Republic is not unconditional, it may be restricted for reasons of public policy, public security or public health.