Turnkey Alternative Investment Fund Setup

Who is the alternative investment fund setup for?

Establishing an alternative investment fund under § 15 of the Czech Act on Investment Companies and Investment Funds (Act No. 240/2013 Coll.) is suitable for individuals interested in conducting business activities involving the management of other people’s assets in a manner comparable to managing an investment fund.

It is a simple method for managing investors' assets which, unlike traditional investment funds, is not subject to regulation and supervision by the Czech National Bank (CNB). Instead, it only requires registration with the CNB. Compared to classic investment funds, an alternative fund (often called a "mini-fund") is characterized by low administrative demands, a simple setup process, and quick registration with the CNB.

A key restriction for alternative investment funds is that they cannot make public offers to invest funds. The offering must be private, meaning there is a closer relationship between the alternative fund and the person being offered the investment opportunity. An alternative investment fund can have a maximum of 20 retail investors; any more would be considered a public offering, which is not allowed unless the investors are qualified investors—those investing more than EUR 125,000.

How much capital can alternative funds manage?

Alternative investment funds may not manage assets exceeding EUR 500 million, or EUR 100 million if the fund uses leverage in its asset management.

It is important to note that alternative funds are generally prohibited from conducting targeted marketing campaigns to the public. Doing so would be considered public solicitation, which is prohibited or highly restricted. An alternative investment fund may only offer its services individually. Reaching out to the public is only allowed if the marketing message clearly targets qualified investors only.

Step-by-Step: Establishing an Alternative Investment Fund

1) Establish a legal entity to act as the fund manager. The most common form is a limited liability company, though joint-stock companies are also used. It is no longer permitted for the fund manager to be a natural person (since August 13, 2017). The manager must also have a registered office in the Czech Republic (§ 15(2) ZISIF).

2) Create an investment strategy and draft the investment agreement along with other required documents to be submitted with the registration application to the CNB.

3) Submit the application to the CNB’s registry once all documentation is ready. The application is typically processed within one week.

What is the CNB’s registration process like?

The process begins with a proposal submitted by the future alternative fund. The application must be submitted electronically and in the Czech language. It can also be submitted via a power of attorney.

Upon registration, the CNB records the alternative fund in its register. This is not a licensing process—no license is granted.

How long does CNB registration take?

If the application is complete and meets all requirements, the CNB will register the fund within five working days of receiving the application. Our current record for the fastest registration is 2 days from submission.

Please note: additional time is needed to prepare all required documentation, which can take several weeks depending on the complexity.

What do we need from you to establish an alternative fund?

To register an alternative fund with the CNB, we will need:

• identification of the legal entity managing investors’ funds. If you do not yet have one, we can establish it for you;
• information about the type of investments and asset classes you intend to invest in;
• the estimated value of the managed assets (NAV – net asset value);
• information to help create your investment strategy or the full strategy if already prepared;
• detailed information about the conditions and model of investment management to prepare the investment agreement.

Where to next?

• What is an alternative investment fund?
• Obligations of the fund manager
• CNB reporting
• AML obligations
• Preparation of the KID under the PRIIPs Regulation
• Investment agreement
• Investment strategy
• News