Asset management license
in the Czech Republic

What does an Asset management company in the Czech Republic mean and how does it work?

An Asset Management Company in the Czech Republic is a licensed entity authorized by the Czech National Bank (CNB) to manage investments on behalf of qualified or institutional investors. These companies can establish and manage investment funds that pool client capital and apply a wide range of investment strategies, including real estate, equities, currencies, derivatives, and even crypto-assets. 

Advantages of Asset Management Company

• The founders and directors of an asset management company can be citizens of any country. There are also no mandatory requirements for professional qualifications or specific experience in finance.
• Asset Management Companies can be formed with a share capital as low as €1. 
• The minimum investment for qualified investors is only €40,000, significantly lower than the typical €125,000 threshold across the EU.
• The cost to set up an Asset Management Company in the Czech Republic is one of the lowest in the world, at only €25,000. 
• The entire registration process can be completed in just 1 month.
• You can manage a wide range of assets, including cash, securities, real estate, cryptocurrencies, and more. There are no restrictions on the types of investments or geographical scope of your fund.
• The Czech Republic does not require asset management companies to work through a depository.
• The CNB ensures the protection of investors’ rights through active supervisory functions. This adds a layer of security and confidence for your investors.
• Beneficiaries do not need to be listed in public registries, and information exchange is not mandatory, ensuring privacy.
• The Czech Republic is a signatory to numerous international treaties against double taxation, ensuring optimal tax efficiency for cross-border operations.

A qualified investor – who is it?

In the Czech Republic, Asset Management Companies offering trust-based investment services are designed for qualified private investors and professional institutional investors.

A qualified investor is either an individual or a legal entity, Czech or foreign, that meets two key requirements:

• the investor must contribute at least 1 million Czech korunas (approximately €40,000);
• the investor must declare that the investment aligns with their financial situation, investment objectives, professional knowledge, and experience.

Institutional investors include entities such as banks, brokers, insurance companies, pension funds, and others.

Why is the Asset Management Company in the Czech Republic better than offshore?

In recent years, the global trend of deoffshorization has been gaining momentum. Governments around the world, international organizations like the Financial Action Task Force (FATF), OECD, the European Union, and the United Nations, have implemented tighter regulations against offshore companies. 

The traditional appeal of offshore companies includes:

• Lower taxes or no taxes on profits.
• The ability to keep company ownership and beneficiaries hidden.

By choosing the Czech Republic over an offshore jurisdiction, you can preserve the key benefits of operating offshore, such as tax optimization and privacy of beneficiaries, while also gaining a host of additional advantages that make it an even better choice for asset managers and hedge fund operators.

The Czech Republic is fully regulated under EU law. This ensures that your business is compliant with European regulations and provides you with full access to EU markets. Unlike offshore jurisdictions, where local laws may be less secure or less protective of assets, the Czech Republic offers strong asset protection under EU law. 

The Czech Republic is home to highly reputable financial institutions and has well-established relationships with top banks in Europe and globally. 

In addition, you will be able to engage with qualified investors and institutional investors within the EU and beyond, without concerns about legal ambiguity. Offshore jurisdictions, while attractive for tax reasons, are often viewed with skepticism by institutional investors due to concerns about regulatory risks.

While offshore companies often operate in a gray zone of legality, asset management companies in the Czech Republic are fully “white” and compliant with international standards. 

Is it possible to create a company managing crypto-assets or a crypto hedge fund?

In the Czech Republic, you can set up an Asset Management Company or hedge fund that specifically focuses on managing crypto-assets. This includes attracting investments in cryptocurrencies, investing in ICO projects, engaging in crypto-mining, and supporting the development of blockchain-based ventures.

Conclusion

The Czech Republic offers a cost-effective and flexible jurisdiction for setting up Asset Management Companies and hedge funds. With low setup costs, no capital requirements, and fast registration, it provides a smooth entry for asset managers. The Czech regulatory environment ensures EU compliance, investor protection, and offers a transparent framework for managing a range of assets, including cryptocurrencies.

At SBSB, we specialize in providing comprehensive legal and regulatory support to businesses looking to establish themselves in the Czech Republic and other jurisdictions. Our team of experienced professionals is well-versed in the complexities of setting up and operating asset management companies, ensuring full compliance with Czech regulations. We guide you through every step of the process — from company registration and compliance to operational setup. Whether it’s ensuring your company meets the registration requirements, drafting essential policies, or preparing for future regulatory changes, we are here to help your business thrive in the dynamic and growing asset management sector in the Czech Republic.

Feel free to contact us for tailored legal advice and solutions that ensure compliance and foster your success in this vibrant market.