Act on the Examination of Foreign Investments was published in the Collection of Laws of the Czech Republic on 3 February 2021 under number 34/2021.
The Act puts a mechanism in place to monitor foreign investments and verify the identity of the ultimate owner of Czech companies which are considered strategic and essential for the security, public and internal order of the country.
This includes critical infrastructure (e.g. energy, water, banks, telecommunications), production of military equipment and dual-use products (e.g. nuclear technology). The law will also cover investments in companies engaged in the development and production of new and emerging technologies with security overlaps (e.g. bio- and nanotechnologies, artificial intelligence, space technologies). Investments in the media sector will also be subject to the monitoring.
The mechanism permits a thorough analysis of the ownership structure of the foreign investor, including the capital background and the identification of the beneficial owners in such strategically important sectors.
The law is part of the European cooperation and exchange of information framework in accordance with REGULATION (EU) 2019/452 establishing the screening of foreign direct investments into the European Union.
The Act is expected to be effective on May 1, 2021.
For more detailed information please contact the UCB CZ Relationship Management Team: GSS.Relationship.Management@unicreditgroup.cz
Impact on Clients: Clients need to take into consideration and evaluate their investment activities in strategic sectors in Czech Republic.