What Are Investment Companies and Investment Funds?
An investment company is a licensed entity that establishes and manages investment funds, provides their administration, or manages the assets of individual clients (portfolio management). Authorisation from the Czech National Bank is required to carry out the activities of an investment company.
An investment fund pools financial resources from investors and invests them according to a defined investment strategy — in real estate, securities, equity interests in companies, bonds, or other assets. Funds may take different legal forms — most commonly a unit fund or a joint-stock company in the form of a SICAV.
The key legal regulation is Act No. 240/2013 Coll., on Investment Companies and Investment Funds (ZISIF), which implements the European AIFMD and UCITS directives into Czech law and sets out the rules for the establishment, management, and supervision of funds.
Key Terms
- Manager — manages the fund’s assets and is responsible for investment decisions.
- Administrator — ensures accounting, asset valuation, compliance, and the fund’s internal audit.
- Depositary — an independent institution (typically a bank) that oversees the handling of the fund’s assets and ensures the safekeeping of assets.
- Fund Statute — the key document setting out the investment strategy, rules, and operating conditions of the fund.
Types of Funds under Czech Law
Czech law offers a broad range of fund structures for different investment strategies and types of investors.
Qualified Investor Fund (FKI)
The most flexible type of fund intended for professional investors. It allows for a broad range of investments — from real estate and equity interests in companies to alternative assets. The minimum investment is generally CZK 1 million. It may be self-managed (with a CNB licence) or non-self-managed (managed by an investment company).
Collective Investment Fund (Retail)
A fund intended for a broad range of investors, including the public. It is subject to stricter regulation and supervision by the Czech National Bank. It typically invests in liquid and standardised assets. It is suitable for managers who wish to target retail clients and offer investment products to the general public.
Manager under Section 15 of ZISIF (Mini-Fund)
A simplified form for asset management up to the limit of EUR 100 million (or EUR 500 million, as applicable). It does not require a CNB licence — only mandatory registration in the CNB register. It is an ideal entry point for emerging managers who wish to validate their investment concept without undergoing a demanding licensing process.
Comparison of Legal Forms of Funds
Comparison of the most commonly used fund structures under Czech law:
| SICAV | Unit Fund | Section 15 ZISIF | |
|---|---|---|---|
| Legal form | Joint-stock company with variable capital | Fund without legal personality | Registered manager |
| CNB licence | Yes for self-managed, no for non-self-managed | Managed by an investment company | Registration only |
| Sub-funds | Yes — ring-fenced | No | No |
| Tax rate | 5% (standard investment fund) | 5% (standard investment fund) | Depending on the type of entity |
| Suitable for | Qualified investor funds and retail funds | Standard collective investment | Emerging managers |
Our Services
We cover all stages — from the initial concept to long-term management and expansion.
1. Fund Formation and Licensing Proceedings
We guide you through the entire process — from selecting the appropriate structure and preparing the application and documentation to obtaining authorisation or registration from the Czech National Bank.
- Preparation of the fund statute and founding documents
- Application for a licence or registration with the Czech National Bank
- Communication with the regulator and submission of supplementary information
2. Management and Asset Management
We provide ongoing legal advice in connection with fund management — acquisition of assets, acquisition of equity interests in companies, and structuring contractual relationships with the depositary and administrator.
3. Compliance and Internal Audit
We ensure compliance with regulatory requirements — implementation of AIFMD, DORA, AML obligations, and the establishment of internal regulations and control mechanisms.
4. Distribution and Cross-Border Structures
We assist with the distribution of funds abroad, notifications to regulators within the EU, and the structuring of cross-border fund arrangements (passporting).
5. Investment Companies
We establish investment companies, handle licensing proceedings, set up their organisational structure, and assist with extending authorisation to cover new activities.
6. Fund Transformations and Amendments
We assist with the transformation of a mini-fund into a qualified investor fund, a change in the legal form of a fund (e.g. into a SICAV), fund mergers, or amendments to the investment strategy and statute.
How Does Fund Formation Work?
We guide you through the entire process — from the business plan to the launch of the fund and commencement of investment activity.
Step 1: Analysis of the Project and Selection of Structure
Together, we review your business plan, investment strategy, and target investor base. On that basis, we select the most suitable type of fund and its legal form.
Step 2: Preparation of Documentation
We prepare the fund statute, founding documents, internal organisational rules, and all supporting materials required for the licence or registration application to the Czech National Bank.
Step 3: Licensing Proceedings before the Czech National Bank
We submit the application and guide you through the entire approval process, including communication with the regulator and any required supplementary information.
Step 4: Setting Up the Operational Framework
We arrange the contractual relationships with the depositary and administrator and establish the compliance programme, internal regulations, and control mechanisms.
Step 5: Fund Launch and Distribution
Once authorisation has been obtained, we ensure the commencement of the fund’s operations, the offering of investment securities to investors, and, where relevant, distribution abroad.
Who Do We Help?
We work with the full range of participants in the capital markets:
- Investment companies — licensed companies establishing and managing funds. We assist with obtaining and extending licences, compliance, and corporate matters.
- Fund managers and asset managers — from mini-fund managers under Section 15 of ZISIF to large institutional managers with cross-border structures.
- Founders and investors — individuals and legal entities considering establishing their own investment fund as a vehicle for collective investment.
- Foreign entities — international funds and managers entering the Czech market, or Czech entities expanding into the EU.
Why Work with Us?
- Deep specialisation — We have long specialised in investment funds and collective investment. We monitor regulatory developments and are part of the professional capital markets community.
- Experience with the Czech National Bank — We have extensive experience with licensing proceedings and communication with the Czech National Bank. We know what the regulator expects and how to accelerate the process.
- Comprehensive approach — We combine regulatory, corporate, tax, and contractual aspects into one integrated solution. We do not approach a fund in isolation, but in the context of the overall structure.
- From startup to enterprise — We work with emerging managers as well as the largest investment companies. We tailor the scope and depth of our services to your needs.
- Cross-border experience — We assist with the distribution of funds abroad and with structuring international fund arrangements across the European Union.
- Long-term partnership — We provide not only one-off advice, but also ongoing support — compliance, internal audit, amendments to the fund statute, and responses to regulatory developments.
Frequently Asked Questions
What Is the Difference Between a Self-Managed and a Non-Self-Managed Fund?
A self-managed fund manages its own assets, which requires a full licence from the Czech National Bank and compliance with demanding personnel and capital requirements. By contrast, a non-self-managed fund entrusts its management to a licensed investment company — registration with the Czech National Bank is sufficient, making it a faster and less costly solution.
What Is a SICAV and Why Is It So Popular?
A SICAV is a joint-stock company with variable share capital. Investors enter by subscribing for investment shares and exit through their redemption, without the need to amend the registered capital. Its main advantage is the ability to create sub-funds — ring-fenced structures with their own investment strategies under a single entity.
How Long Does It Take to Establish an Investment Fund?
It depends on the chosen type of fund. Registration of a mini-fund under Section 15 of ZISIF may be completed within weeks. The establishment of a non-self-managed qualified investor fund usually takes 2–4 months. For a self-managed fund involving CNB licensing proceedings, a timeframe of 6–12 months should be expected, depending on the complexity of the structure.
Is a Mini-Fund under Section 15 of ZISIF Suitable as an Entry-Level Solution?
Yes, a mini-fund is often used as an entry-level solution for managers who wish to test their investment strategy without a demanding licensing process. The manager is subject only to registration with the Czech National Bank and may manage assets up to the statutory limit. Once a critical size is reached, the structure may be transformed into a fully fledged qualified investor fund.
What Are the Main Regulatory Obligations of an Investment Fund?
The main obligations include bookkeeping, asset valuation, compliance and internal audit, reporting to the Czech National Bank, fulfilment of AML obligations, cooperation with the depositary, and compliance with investment limits set by the fund statute and by law. With the implementation of DORA, additional requirements relating to digital operational resilience also apply.
Can a Fund Be Distributed Abroad?
Yes, thanks to the European AIFMD and UCITS directives, a fund may be distributed to other EU Member States through the so-called passporting regime. The process requires notification to the regulators of the relevant countries and compliance with local marketing and disclosure requirements.
Are You Planning to Establish a Fund or Need Legal Support?
Contact us and we will discuss your options. We can advise on the selection of the right structure, the licensing process, and ongoing management.