The new Act on Collective Companies and Collective Investment (the “Act”) was approved by the Upper Chamber of Parliament and is expected to be submitted to the President for signature in the forthcoming days. If not vetoed by the President, the Act should become effective on its publication in the collection of laws and replace the current Act on Collective Investment. The Act proposes various new legal forms of investment funds, including (i) a joint-stock company with variable capital (the Czech variant of an open-ended collective investment scheme common in Western Europe) (a “SICAV”), (ii) a limited liability partnership issuing investment certificates, or (iii) a trust.

Further information regarding the Act can be found here.


The concept of a Czech SICAV was inspired by the German open-ended collective investment scheme model and has been introduced by the Act to create a more attractive environment for investors in the Czech Republic. The SICAV includes many advantages of the current form of a Czech joint-stock company, in particular, the limits of a shareholder’s liability permitted by Czech law and it also provides new opportunities for the disposal of a company’s variable capital without administrative, time and additional cost complications (for further details, please see below).

Corporate structure of a SICAV

The required internal structure of a SICAV is simpler than the current structure required for a Czech joint-stock company. A SICAV does not need to establish a supervisory board. The only required corporate bodies of a SICAV will be (i) a statutory director to manage the business of the SICAV, and (ii) an administrative committee to determine and oversee the implementation of the SICAV’s management strategy.

Shares and shareholders of a SICAV

A SICAV must issue the following two types of shares:

  • founder shares: the founders of a SICAV would primarily subscribe for founder shares. Typical shareholder rights attach to these shares, in particular, the right to attend and vote at a SICAV’s general meeting.
  • investment shares: the investors of a SICAV will subscribe for investment shares. The main purpose of such shares is the ability of a shareholder to request the SICAV to redeem the shares and pay the investor the redemption amount. In contrast to the owners of founder shares, owners of investment shares will not, in principle, have any influence on the administration or the business management of a SICAV.

Share capital of a SICAV

A SICAV’s share capital will correspond to its fund capital. The amount of the SICAV’s share capital registered in the Czech commercial register will amount to the sum contributed by the founders for the founder shares.

The SICAV’s fund capital does not need to be registered in the Czech commercial register and will continually increase or decrease depending on whether investment shares are issued or redeemed.

The investment shares shall be issued for their actual value which was announced on the decisive date (determined in accordance with the SICAV’s statute) and can be increased by an amount stated in the SICAV’s statute. If an investor requests the redemption of the investor shares, the redemption amount shall equal the investment shares’ actual value which was announced on the day of receipt of the investor’s request and can be decreased by an amount stated in the SICAV’s statute.

Sub-funds of a SICAV

A SICAV may establish “sub-funds” which will, from an accountancy perspective, form a separate part of the SICAV’s assets. The SICAV will issue investment shares in relation to each sub-fund. Each sub-fund will have its own investment strategy. The sub-funds do not have to be registered in the Czech commercial register.

If sub-funds are established by a SICAV, the SICAV will operate as an umbrella fund for all sub-funds. This structure allows, in particular:

  • investors to change their investment strategy by simply swapping sub-funds within a SICAV for no additional costs e.g. entry or exit fees;
  • an owner of investment shares relating to a sub-fund the right to a share of that sub-fund’s profits and a share of any liquidation balance of that sub-fund; and
  • only assets allocated to a specific sub-fund to be used to satisfy a creditor's claim against a SICAV arising from (i) the establishment or liquidation of a SICAV’s sub-fund, or (ii) the sub-fund’s investment strategy.