Setting up an investment fund in the Czech Republic in 2022 is more and more popular. You will be impressed by all its benefits. Besides, it’s one of the ways for foreign investors to set up their business operations in the country.
Find out in this article all about opening an investment fund in the Czech Republic.
What are the types of licenses to open an investment fund in the Czech Republic?
There are several available licenses to act as a Fund Manager in the Czech Republic, the two main are:
- Large Fund Manager, which has very strict requirements and is hard to obtain
- Asset Management Company (AMC), which allows having assets with a value which not exceed 100 MEUR
Focus on the Asset Management Company
The AMC has the right to collect assets up to 100,000,000 EUR if it is a quick investment for less than 5 years and/or the company uses leverage. If it is a long-term investment and the company will pay back the investors in 5 years or more, then the limit is 500,000,000 EUR.
The company attracts qualified investors – any person who invests more than 1,000,000 CZK (about 40,000 EUR). It’s important to understand that the company does not become the owner of the assets, as in the case of conventional investment funds, but simply manages them. Thanks to this, accounting is easier and the tax is quite low. The company pays 19% on its profits, not on the profits from all assets.
The advantage is also the minimal intervention of CNB. You can take any commission, in any form (fix, commission at the entrance, at the exit, by results, etc.). It is from this commission, minus the costs, that you pay 19%. The company can also simultaneously be engaged in standard business activities.
Reporting to the CNB is also minimal – once-a-year reports. The company’s activities are not regulated by the CNB (the CNB does not say how to work, what protection and guarantees to provide, what documents should look like etc.), but only controlled (so that investors are qualified and the limits are observed).
What are the benefits to open an investment fund in the Czech Republic?
Here are some benefits of such funds:
- Optimization of taxation. Fund profit tax is 5% for most types of funds.
- Concealment of beneficiaries. Participant investors of funds are not listed in public registries and are not subject to the exchange of information.
- Ability to raise capital – easy entry and exit of investors, transparent structure.
- Protection of investors’ rights – regulation of the activity of the CNB, supervisory functions of the depositary.
- Legal withdrawal of assets to Europe.
- Protection of business from raiding in any country.
- Easy distribution of shares in fund assets.
- Trouble-free transfer of shares to other persons through the sale of shares of the fund.
- Compliance with European law on investment companies and funds.
- Compliance with all requirements of MiFID, OECD, and FATF.
- Czech jurisdiction has a spotless reputation.
- 100% foreign ownership of the fund is allowed.
- Ability to target the fund for any type of activity.
- Czech membership in the EU opens up tremendous opportunities for doing business around the world.
- A large number of international treaties against double taxation
To learn more about investment funds, click here.
