Alternative funds and their activities have been gradually developed in the Czech Republic since 2006; since 2013, they have developed under a single European regulation, the Alternative Investment Fund Managers Directive (AIFMD).
The inception and operation of qualified investor funds in the Czech Republic were launched by the amendment to the Collective Investment Act, effective from 26 May 2006; in addition to special funds that were only intended for collective investment by the public till then, the amendment newly introduced a fund for investment by qualified investors with lower regulation and a greater level of flexibility in setting up its investment policy, with less restrictive investment limits etc. compared to funds for investors from the public.
Under the CNB’s licence of 16 January 2007, the first qualified investor fund in the Czech Republic was the Open-end Mutual Fund AMISTA GARANCIA, AMISTA investiční společnost, a.s.
There are currently more than 200 qualified investor funds in the Czech Republic.
The Czech Republic has created a number of preconditions for the successful development of its alternative fund management sector:
- stable banking system;
- developed system of services to manage funds at a high professional level;
- location in Central Europe;
- lead compared to other Central and Eastern European countries;
- large number of double taxation treaties;
- low prices of services provided.
Although the Czech Republic was the first European country to introduce alternative funds into its legal system, their future depends on:
- the stability of legislative and tax conditions for the operation of the funds, with an emphasis on international competitiveness within the EU;
- public political international support for this sector.
The objectives include:
- increasing GDP through growth in the sector of highly specialised financial services;
- reversing the unfavourable situation where just a negligible portion of investments in Europe are managed in the Czech Republic;
- embracing the opportunity created by the single European regulation of alternative funds (the AIFM Directive) and attracting the administration of funds of foreign managers to the Czech Republic;
- ensuring that there are positive impacts on the state budget; increasing the amount collected in taxes.
Would you like to learn more?Contact us