How to open an investment fund in the Czech Republic?

In the Czech Republic, foreign investors can choose to set up either a business or an investment fund as their vehicle for investing. Commercial firms must comply with one set of rules in the Czech Republic, while investment funds must adhere to different regulations. The Investment Companies and Investment Funds Act is the piece of legislation responsible for regulating investment vehicles in the Czech Republic. One of the options available to international investors looking to establish business activities in the Czech Republic is to participate in a Czech investment fund. The legislation in the Czech Republic provides a diverse selection of investment vehicles to cater to a broad spectrum of investors. Because the Czech Republic is a member state of the European Union (EU), its investment fund legislation follows the guidelines established by the EU in a number of its directives. Damnation company formation experts on our staff can assist you in complying with the regulations that are associated with this piece of legislation.

Legislation in the Czech Republic about investment funds

The newly enacted Czech Investment Companies and Investment Funds Act will benefit investors on domestic and international levels. The Act resulted in the creation of several new investment vehicles, including the following:

Investment vehicles include trust funds and SICAVs (investment companies with variable capital), to name just two examples.

The Act was modified following the Directive on Alternative Investment Fund Managers, which prompted the amendments (AIMF). The new Act allows investment funds and other kinds of investment organizations that handle the assets of investment funds to organize businesses in the Czech Republic, which is something that companies interested in forming a business in the Czech Republic should be aware of.

In addition, regulations for the industry are provided by the Czech National Bank, which is the primary regulator of investment vehicles in the Czech Republic and is responsible for regulating the sector. We can lend a hand to you if you require assistance with the procedure for registering, which is regulated by the Czech National Bank.

The various kinds of investment funds available in the Czech Republic

Even though the investment market in the Czech Republic is not quite as established as it is in other European states, more than 1,200 overseas investment funds were registered in the country in 2014. The applicable legislation distinguishes between open-ended and closed-ended funds, a characteristic that refers to the constraints applied for issuing shares. Generally, this distinction is made between open-ended funds and closed-ended funds.

Investors have the option of establishing an investment vehicle that will be registered with any one of the following legal entities:

• joint-stock firms

 • investment companies with changeable capital

 • limited partnerships

 • limited liability corporations

 • mutual funds

 • trust funds

Prerequisites for getting an investment fund registered in the Czech Republic

A minimum capital contribution of 1.25 million Euros will be required from the investors before establishing a company that will be shown as an investment fund. The Czech National Bank (CNB), the primary regulatory agency based for this category of vehicles, has the authority to approve investment funds. However, this approval is only granted under specific circumstances.

The information about the statute of an investment fund in the Czech Republic can be found in the Decree of the 24th of July 2013, which the CNB issued. This Decree stipulates what information should be provided on the investment fund and its managers and the investment strategies carried out under the respective vehicle.

Register with the National Bank of the Czech Republic.

Managers of alternative investment funds must register with the Czech National Bank following the new Act, which is the legislation that gives effect to the AIMF regulations (CNB). In addition, any individuals considering making financial investments in the Czech Republic must inform the CNB of their intentions in this regard.

In some circumstances, such as when the value of the investment project surpasses the thresholds established by the applicable legislation, the CNB will give permission.

What is unique about Czech QIFs?

Since its inception in 2007, the QIF has been aimed at qualified investors, who can be represented by either legal entities (banks, credit institutions) or natural persons (such as accredited investors) with substantial experience in the financial sector. Because of their lesser level of regulation than other forms of funds, QIFs are called alternative investment funds.

A joint-stock company is the first step in registering a Czech QIF for foreign and local investors. Investors must put a minimum of CZK 50 million into the QIF before it can be registered as a mutual fund or another type of QIF (EUR 2 million).

As per Czech law, the fund’s founders can raise this capital within one year of receiving a license to operate in the Czech Republic. Thus, it is essential to know that the money does not have to be deposited upon incorporation.

A well-diversified portfolio of investments is a prerequisite for this particular sort of fund. Because of this, the Czech National Bank has mandated that all Czech QIFs must invest in at least two asset classes. Investments in a single asset, for example, are prohibited from exceeding 50% of the total value of the fund’s investments.

In the Czech QIF market, investors can be either natural individuals or legal organizations. Each investor must contribute at least CZK 1 million (about $1 million) to the fund, which is limited to 100 qualified investors by law.

Do Czech funds’ assets have a monetary value?

Investment funds based in the Czech Republic are monitored by the Central Bank of the Czech Republic. Information on EU investment funds and other financial institutions is then sent to the European Central Bank (ECB).

A total of CZK 185.162 million was held in Czech funds in equity and investment fund shares; CZK 109.578 million was held in debt securities; CZK 60.357 million was held in currency and deposits; CZK 46.424 million was held in loans, and CZK 13.243 million was held in other types of accounts receivable (CZK 117 billion).

You can establish an investment fund in the Czech Republic.

The Czech National Bank is the primary regulator of investment funds in the Czech Republic. It is also responsible for governing business registration for investment funds in the Czech Republic. Although the minimum amount of capital that must be contributed to establishing a registered investment fund in the Czech Republic is 1.25 million euros, this number may change depending on the type of fund written.

One example of a form of Czech collective investment fund is a UCITS fund, which stands for “undertakings for collective investment in transferable securities.” Other types of Czech collective investment funds include non-UCITS funds. The UCITS in the Czech Republic can be organized either as a SICAV, defined as “an investment company with variable capital,” or as an FCP (an open-ended fund). The following aspects of UCITS funds can be discussed in greater depth by our team of consultants specializing in the registration of Czech companies:

In comparison, funds that have shown an internal management structure must have initial money of 1.25 million euros. The initial capital for both funds must be raised within six months of the entity’s incorporation. However, the initial capital needs must be fulfilled within six months following the fund’s establishment. This requirement is contingent on the management structure of the fund.

What are the necessary actions to bring an end to a Czech investment fund?

The process of winding down investment funds is analogous to other company companies. In the Czech Republic, the Czech National Bank and the local courts are required to be involved in forming any firm, regardless of the type of funding utilized. If investment funds with a legal personality fail, the Czech National Bank will select a liquidator to handle the situation.

If the fund does not have legal personality, the procedure will be carried out differently.

The administrator will handle the redemption of shares, while the management will be responsible for liquidating the fund’s assets to pay down the fund’s liabilities.

Investors thinking about establishing a company in the Czech Republic should be aware that investment funds in that country will not be subject to the same level of taxation after the year 2015 as they were before the passage of this new Act. Those investors should consider this information.

Our Damalion investment funds experts invite overseas investors interested in creating an investment fund in Czech Republic. 

How to open an investment fund in the Czech Republic — legal forms, licence routes, manager options, documents, capital, timeline, and investor eligibility.

For fund sponsors, asset managers, family offices, private equity and venture capital teams, and international groups. We help you prepare a clear file so a Czech fund can be assessed by the competent authority and service providers. Decisions stay with the regulator, depositary, and the relevant institutions.

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What helps a Czech fund launch faster?

Define the fund type and investor base at the start. Decide between UCITS or alternative (AIF). Decide if the fund is self-managed or externally managed. Keep a simple, consistent plan for strategy, target assets, and risk control. Explain service providers early (manager, depositary, administrator, auditor). A complete, consistent file reduces back-and-forth.

Main fund forms and routes

Route	Legal nature	Typical use	Notes (licensing/registration)
UCITS (open-end)	Investment company (SICAV a.s.) or mutual fund (podílový fond)	Liquid, diversified retail funds	UCITS regime; CNB authorisation; depositary required.
AIF for qualified investors (QIF / FKI)	SICAV a.s., SICAF a.s., limited partnership (k.s.), or mutual fund	Private equity, VC, real assets, credit	Qualified investors only; AIFM rules apply (full or sub-threshold).
Externally managed fund	Fund + licensed AIFM/UCITS ManCo	When sponsor delegates portfolio and risk	Manager licensed/registered; fund authorised/registered with CNB.
Self-managed investment company	SICAV a.s. acting as manager	Single-strategy platforms	Capital and governance requirements; CNB approval.

Documents most projects need

• Draft statutes/rules and key terms (share/units, classes, fees, valuation, gates, redemptions).
• Business plan and investment policy (assets, limits, leverage, risk controls).
• Service provider drafts: depositary, administrator, valuation, auditor, distributor.
• Manager profile (board, senior staff, risk/compliance, policies).
• Capital plan and investor profile (target investors, minimums).
• KYC/AML information for founders and significant investors.

Capital and minimums

For registered investment companies, initial capital thresholds apply. On your current page you note a capital level in the order of EUR 1.25 million for certain structures. QIF/FKI projects typically observe higher figures in CZK and may stage capital over time, subject to law and licence conditions. Always confirm with the CNB rules and the chosen structure.

Typical timeline

• Term-sheet alignment with providers.
• Drafts of statutes/rules and agreements.
• Submission to the Czech National Bank (CNB) as relevant.
• Follow-ups on governance, risk, valuation, and depositary oversight.
• Registration/authorisation; launch and first closing.

Related reading

• Investment funds articles
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• Special Limited Partnership insights
• Operating guide (example of processes)

Frequently asked questions

1) What Czech law governs investment funds?

The Act on Investment Companies and Investment Funds (Czech: Zákon o investičních společnostech a investičních fondech) and related CNB regulations. UCITS and AIFMD rules also apply where relevant.

2) Who is the competent authority?

The Czech National Bank (CNB) is the competent authority for authorisations, registrations, supervision, and ongoing reporting of funds and managers.

3) Which legal forms are available?

Investment company with variable capital (SICAV a.s.), investment company with fixed capital (SICAF a.s.), mutual fund (podílový fond, without legal personality), and other vehicles such as limited partnership (k.s.) used within AIF structures.

4) What is the difference between UCITS and AIF?

UCITS are harmonised retail funds with strict diversification and liquidity rules. AIF covers alternative strategies (e.g., private equity, real estate, credit) addressed to qualified investors, with AIFM rules on risk, leverage, and disclosures.

5) What are the manager options?

Externally managed by a licensed management company/AIFM, or self-managed (the investment company is also the manager). Governance, capital, and function-separation rules apply in both cases.

6) Is a depositary mandatory?

Yes. UCITS and most AIF structures appoint an eligible Czech depositary responsible for safekeeping, cash flow monitoring, and oversight duties defined by law.

7) What are typical capital requirements?

They depend on structure and management model. Your current page notes a level around EUR 1.25 million for certain registered investment companies. QIF/FKI projects observe CZK thresholds. CNB practice and EU rules must be checked case-by-case.

8) Who may invest in a QIF/FKI?

Qualified investors as defined by Czech law and EU rules (including institutions and experienced individuals meeting legal criteria and minimums).

9) Are diversification limits required?

Yes. UCITS has detailed limits. AIF may have policy-driven limits and CNB-tested risk controls. Some QIF/FKI strategies must avoid excessive concentration per statute and prospectus.

10) Can the fund be marketed across the EU?

UCITS benefit from an EU passport. AIFM-managed AIF can use AIFMD marketing passports to professional investors, subject to notifications and conditions.

11) Which documents are filed to the CNB?

Statutes/rules or articles, offering document/KID as applicable, service agreements (depositary, administration), manager information, policies on risk, valuation, liquidity, and AML/CTF controls.

12) How long does authorisation or registration take?

Timing varies by structure, completeness of the file, and CNB review. Expect several weeks to a few months from a complete submission, depending on responses to follow-ups.

13) Are side letters allowed?

Permissible under AIF practice if consistent with fund documents and investors are treated fairly. Disclosure and equal-treatment principles apply.

14) What are valuation requirements?

Valuation policies must be documented. Independence and consistency are required. The administrator or an external valuer may be used per law and fund rules.

15) How are fees and carried interest disclosed?

Fees, performance fee or carry, and expense policy must be disclosed in fund documents. For UCITS, KID/PRIIPs applies. For AIF, pre-contractual and periodic disclosures apply.

16) What are reporting duties?

Regulatory reports to the CNB and, where applicable, ESMA/AIFMD Annex IV. Financial statements audited annually. Investor reporting per fund documents.

17) How are AML/CTF obligations handled?

Managers and service providers must apply customer due diligence, monitor transactions, and keep records under Czech AML law and EU directives.

18) What about tax?

Tax depends on vehicle and investments. Obtain independent tax advice on fund-level taxation, investor taxation, withholding, and treaty access. This page does not provide tax advice.

19) Can the fund use leverage?

Yes, within documented limits. UCITS leverage is restricted and monitored. AIF leverage must be measured, disclosed, and kept within risk limits under AIFMD.

20) How is a fund wound up?

Winding-up follows Czech corporate and fund law. CNB and courts may be involved depending on the legal form. A liquidator or administrator is appointed. Assets are realised and liabilities settled in line with statutes and law.