AIFM passporting in the Czech Republic

Non Czech above-threshold AIFMs authorised in their EEA home State may exercise passport rights for marketing the investment into the AIF to professional investors upon receiving a confirmation of its home Member State Authority that it notified the Czech National Bank (the “CNB”). The CNB then registers the relevant AIF in a list of foreign AIF marketed in the Czech Republic. Once the AIF is registered by the CNB, it can be publicly marketed to the relevant (qualified) investors.

A notification is a sufficient condition for a private placement in relation to the EEA AIF to professional investors in Czech Republic. On the other hand, a private placement to persons other than qualified investors is possible under additional conditions that (i) such an investment into an AIF may be offered publicly or (ii) there is a maximum of 20 addressees.

As for a public offering to the EEA AIFM to nonqualified investors, beside the manager’s licence, the notification and the registration with the CNB, it is necessary (i) that the EEA AIF is comparable with a local special fund (i.e. non UCITS), while the CNB decides in this matter upon an application submitted by the manager, as well as (ii) to ensure provision of information to investors, service for investors and public administration including operation of a contact point. However, these activities may be carried out electronically or by other means allowing remote access.

AIFMs based in Non EEA jurisdictions wishing to manage or distribute units of the EEA AIF in the Czech Republic will be required to apply for permission by the CNB. Moreover, the EEA AIF other than Czech based AIF needs to be registered with the CNB before the third country AIFMs may start to offer investments in the AIF.

Above threshold EEA AIFMs may commence pre-marketing AIFs which are not yet established or established but not yet compliant with the applicable marketing procedures, to potential professional investors in the Czech Republic, provided that the CNB receives a pre-marketing notification letter within two weeks of starting such pre-marketing activity. EEA AIFMs need to send this pre-marketing notification letter to their home State competent authority within two weeks of starting such pre-marketing activity, which in turn is directly transmitted to the CNB.

The information provided to potential professional investors within the context of the pre-marketing activity should not enable such investors to commit to acquiring units or shares of the pre marketed AIF or amount to a subscription form or similar document, whether in draft or final form.

For a period of 18 months after the start of the pre-marketing of the AIF, the AIFM may not rely on reverse solicitation in the jurisdiction where the pre-marketing has been notified.

From July 2024, there is no registration fee of a foreign AIF with the CNB or a renewal fee.

Further, there is a CZK 5,000 (approx. EUR 200) administrative fee in relation to an application to the CNB for an evaluation of comparability between the foreign AIF and the local special fund.

An application for the license of a third country AIFM in the Czech Republic shall be subject to a fee amounting to CZK 50,000 - 100,000 (approx. EUR 2,000 - 4,000) (subject to further conditions).