Czech Republic: Governing Laws/Bylaw Requirements

There are generally no specific restrictions applicable to investments in the Czech Republic by a nonresident. However, certain limitations may apply according to the Czech Crisis Management Act, Act No. 240/2000 Coll. In case of an emergency, the Czech government can particularly prohibit:

(i) the acquisition of foreign currency assets, securities and book-entry securities the issuer of which is a resident or domiciled outside the territory of the Czech Republic for Czech currency;

(ii) making all payments from the Czech Republic abroad, including payments between payment service providers and their branches;

(iii) the deposit of funds for accounts abroad;

(iv) the sale of securities and book-entry securities, the issuer of which is a resident or registered office in the Czech Republic, persons with permanent residence or registered office outside the territory of the Czech Republic;

(v) receiving loans from persons with permanent residence or registered office outside the territory of the Czech Republic;

(vi) the establishment of accounts in the Czech Republic for persons with permanent residence or residence outside the territory of the Czech Republic and the deposit of funds into their accounts; and

(vii) the implementation of all payments from abroad to the Czech Republic between payment service providers and their branches. Moreover, certain notification duties may apply.

Entities which are subsumed pursuant to notification by the Czech National Bank under the group of statistically significant entities are required to notify certain investments to the Czech National Bank. As regards direct investments, a domestic company with direct investment by a foreign investor must report the direct investment to the Czech National Bank if the foreign investor’s share in the domestic company’s business, or the amount of loans provided or accepted within the direct investment in the Czech Republic, amounts to at least CZK 25,000,000 at the end of the calendar year.

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