How to establish a qualified investor fund

When a qualified investor fund is worth it

A qualified investor fund makes sense where larger assets of multiple investors are pooled and where investors want a regulated structure with independent control. Typically, these are groups of entrepreneurs who want to co-invest in real estate or companies, family wealth to be managed long-term and passed down through generations, and institutional investors who entrust part of their portfolio to a professional manager.

The fund pools funds or assets valuable in money from multiple qualified investors and invests them jointly according to a strategy, which is generally based on the principle of risk spreading (Section 95 of ZISIF). Investors receive a share in the fund's assets and yields in exchange for their contribution. Compared to public funds, a qualified investor fund is subject to lighter regulation, can invest in a wider range of assets, and sets its statute with greater freedom.

A fund is less suitable for an investor with a smaller amount, as the statutory minimum is generally EUR 125,000, or one million Czech korunas with a suitability assessment. It is also not suitable where investors need quick liquidity, as redemption is governed by the statute and can take longer, or where the founders do not have a clear investment strategy or do not want to bear the costs of administration, depositary, and audit.

Lawyers from the Prague-based ARROWS law firm will compare the fund with other structures for your specific project. We will assess how much assets you want to manage, how many investors you will target, how long the structure will operate, and whether the tax savings will offset the operating costs. For smaller volumes, a holding structure, a trust fund outside the investment fund regime, or a venture capital entity may be more advantageous.

Who is allowed to invest in the fund and what remained unchanged in 2026

A share in a fund can only be acquired by a qualified investor under Section 272 of ZISIF. This includes professional clients under the Capital Market Undertakings Act, managers investing on behalf of other funds, or pension companies on behalf of their funds. Other natural and legal persons become qualified investors by declaring in writing that they are aware of the risks and investing at least the amount stipulated by law.

That amount is EUR 125,000, or CZK 1,000,000 if the manager or administrator confirms in writing that, based on information from the investor, they reasonably believe that the investment corresponds to the investor's financial background, investment objectives, and professional knowledge and experience. The assessment is carried out similarly to investment advice or portfolio management and is confirmed by the manager, administrator, or a person authorized by them. Therefore, some funds set their own minimum of EUR 125,000 in their statute and do not use the one million koruna option.

The date of July 1, 2026, which appears in connection with the EUR 125,000 threshold, does not concern qualified investor funds. On this date, the transitional period ended only for entities that manage assets comparably to asset management and must have the designation "venture capital entity" in their name. Those registered in the Czech National Bank's list before July 1, 2024, must fully comply with the rules for their investors from this date (Article II of Act No. 163/2024 Coll.). However, for investments accepted before July 1, 2024, the requirements for prior information and suitability assessment do not apply.

A venture capital entity is neither an investment fund nor a licensed manager, must not exceed the relevant threshold, and must inform investors that it is not subject to CNB supervision (Section 15 of ZISIF). Its investors must generally invest at least EUR 125,000 and undergo a suitability assessment; a maximum of 20 investors may fail to meet the EUR 125,000 threshold. If the entity has more than 20 investors, it submits an auditor's report on compliance with this limit to the CNB every year. The differences between the two paths for technology investments are discussed in the article Investing in Scientific Startups.

The threshold is monitored even after the investor's entry. The value of the contribution must not fall below the statutory minimum as a result of the investor's actions, but the investor may exit the fund completely. If a person who does not meet the conditions acquires a share, the law disregards this, and if the fund permanently fails to meet the prerequisites, the court will dissolve it and order its liquidation upon the proposal of the CNB or another authorized person, but will first grant a period for remedy.

Self-managed vs. externally managed fund: a choice that determines costs

The founder's first decision is who will manage the fund. An externally managed fund entrusts management to a licensed investment company and is registered in the list maintained by the CNB. A self-managed fund manages itself, requiring an authorization to operate, its own managers, risk management, and internal control. According to our practice, the licensing proceedings take approximately six to twelve months, while the registration of a fund managed by an investment company takes in the order of weeks.

There is also a difference in capital. A self-managed investment fund authorized to exceed the relevant threshold needs an initial capital of at least EUR 300,000, an investment company with this authorization EUR 125,000, and both an investment company and a self-managed fund below the threshold EUR 50,000 (Section 29 of ZISIF). For smaller funds with a few investors, it is therefore usually cheaper to hire an existing investment company that already has the authorization and operational background.

The second decision is the legal form. The most common choice is a joint-stock company with variable capital, i.e., SICAV, as it allows for the continuous issuance and redemption of shares, the creation of sub-funds, and different classes of investment shares. The assets from its investment activities are accounting-wise and asset-wise separated from the other assets of the company. For closed structures, a limited partnership with investment certificates is used, and less frequently, a mutual fund without legal personality.

The law also permits a trust fund whose statute designates multiple qualified investors as beneficiaries. The choice of form affects how investors enter and exit, how profits are split between founders and other investors, and how the fund is taxed. If the founder wants to contribute an existing company or real estate to the fund, it is advisable to assess the structure simultaneously with the asset transfer and financing. Other ways to raise capital are summarized in the article Raising Capital Without a Securities Prospectus.

Manager, administrator, and depositary: who is responsible for what

A fund needs a manager, an administrator, and usually also a depositary. The manager decides on investments and manages risks, while the administrator keeps records of investors, values assets, calculates share value, and prepares reports. Both activities are often performed by the same investment company, but the administrator can also be a main administrator with a CNB authorization. The relationships between the fund and these entities are governed by contracts, the content of which determines how disputes and crisis situations are resolved.

The depositary, usually a bank, safeguards the fund's assets, monitors the manager's instructions, and oversees valuation. For a qualified investor fund, it performs the monitoring of instructions only after they are executed, unless agreed otherwise. This division of roles is the main protection for the investor, as the fund's assets are separated from the manager's assets and their movements are monitored by an independent entity. Depositary services are provided by only a limited number of banks, so it is advisable to contact them before preparing the application.

The obligation to have a depositary is the rule, but not without exception. A fund that is a qualified venture capital fund or a qualified social entrepreneurship fund under European regulations and whose manager does not exceed the relevant threshold does not need to have a depositary (Section 83 of ZISIF). Under statutory conditions, a notary can also act as a depositary, typically for funds with a long-term investment horizon that invest mainly in business shares.

Lawyers from our Czech legal team prepare the management contract, administration contract, and depositary contract so that they align with each other. We mainly watch what happens upon termination of cooperation, how asset valuation disputes are resolved, who is liable for delegated activities, and how to proceed if the depositary or manager terminates their activity. These issues are often sidelined during establishment and then addressed at the least convenient moment.

Fund and manager capital after the abolition of minimum fund capital

From September 1, 2026, the law no longer requires the fund capital of a qualified investor fund to reach a specified amount within one year of its establishment. Until August 31, 2026, it had to reach EUR 1,250,000, or EUR 1,000,000 for funds investing mainly in business shares or intellectual property rights within the period specified in the statute. Amendment No. 130/2026 Coll. abolished these rules in Sections 280 to 282 of ZISIF.

For funds established earlier, this means checking the statute and articles of association. If they refer to the original requirement, the requirement remains part of the binding setup of the fund until the statute or other documentation is amended, even though it is no longer required by law. Founders who previously planned a contribution mainly because of the statutory threshold can set the first-year financing according to the actual needs of the fund, not according to a statutory figure.

However, capital requirements for managers and self-managed funds remain in place. In addition to initial capital, an investment company and a self-managed fund authorized to exceed the relevant threshold must continuously maintain capital in accordance with Article 13 of Regulation (EU) 2019/2033, i.e., in relation to their fixed overheads. The capital of any manager must not fall below the minimum amount of initial capital throughout its existence (Section 30 of ZISIF).

At the same time, a growing fund does not necessarily mean a stronger manager. The fund's assets belong to the investors and are not included in the manager's capital, while the manager's costs for team, systems, and reporting grow. The fund's business plan should therefore show how operations will be financed in the first years, what the expected operating costs are, and who will continuously monitor the capital level.

From project plan to registration with the Czech National Bank

Preparation begins with the project plan, not with forms. The founder must clarify what the fund will invest in, for how long, how investors will enter and exit, and how yields will be distributed. These answers form the statute, which describes the investment strategy, limits, fees, investor rights, and valuation rules. A vague description of the strategy is a common reason why the CNB requests additional information.

In parallel, the manager, administrator, and depositary are selected, and contracts with them, investor documentation, and internal regulations for risk management, conflicts of interest, and anti-money laundering measures under Act No. 253/2008 Coll. are prepared. The investor documentation must include a basis for assessing the qualified investor and a separate written declaration of risk awareness, which must not merely be part of the terms and conditions.

Applications to the Czech National Bank are submitted electronically. In the proceedings, expect requests for additional information, typically regarding the investment strategy, depositary details, or the source of the founders' funds. A prompt and complete response shortens the proceedings more than anything else. After registration, the fund can accept investors, but it must verify compliance with the qualified investor conditions for each investor before acceptance and archive the documents, as both the CNB and the auditor review them.

The operation of the fund is associated with regular reporting. The fund prepares an annual report with financial statements verified by an auditor, and the manager submits reports on activities and risks to the CNB, the scope of which depends on its category. The fund ends with the exit of investors or liquidation; disputes arise mainly where the statute does not sufficiently describe asset valuation and investor settlement.

What changes with the amendment effective from September 2026

Amendment No. 130/2026 Coll. transposes into Czech law the revision of the European Alternative Investment Fund Managers Directive, referred to as AIFMD II. It is mostly effective from September 1, 2026, with some provisions, including supervisory reporting, effective from April 16, 2027. In addition to the abolition of minimum fund capital, it brings rules for liquidity management tools, delegation to third parties, and loan-originating funds.

For founders, it is crucial which category the manager falls into. For a manager who is not authorized to exceed the relevant threshold and manages only qualified investor funds, Sections 37a to 37k of ZISIF, i.e., also the rules for liquidity management tools and fund loans, do not apply (Section 28 of ZISIF). For smaller funds, it is therefore necessary to first verify whether the new rules apply to them at all.

The manager of an open-ended fund must state in the statute at least two liquidity management tools from the statutory list, for example, redemption limits and extension of the redemption period (Section 37b of ZISIF). Suspension of redemptions is not counted among these two tools and can only be used in exceptional cases. A manager who delegates key activities to other persons must inform the CNB in more detail and remains responsible for the delegated activities. Loan-originating funds have new rules for risk retention and leverage limits.

Tax regime of the fund and its investors

The tax regime of the fund is decided based on whether it meets the conditions of a basic investment fund under Section 17b of the Income Tax Act. Such a fund is taxed at a rate of 5%, while other funds are taxed at the basic rate of 21% (Section 21 of the same Act). A mutual fund is always a basic investment fund. Another fund or sub-fund meets the conditions if, according to its statute, it invests more than 90% of its assets in listed assets, such as investment securities, shares in capital companies, or loans; real estate is not among them. A special path applies to funds with shares admitted to trading on a regulated market.

For natural persons, it is necessary to distinguish two types of income. A share of profit paid by a fund whose shares are securities is generally taxed with a 15% withholding tax (Section 36 of the Income Tax Act), which does not enter the higher 23% bracket. Income from the sale of a share enters the general tax base with rates of 15% and 23%, unless it is exempt, for example, after three years from acquisition or if the total income from the sale of securities does not exceed CZK 100,000 per year. Legal entities generally include yields in their tax base.

Tax errors most commonly occur in two ways. The fund counts on a reduced rate, but its actual investment strategy does not meet the conditions of a basic investment fund, or investors incorrectly report yields from shares. Additional tax assessments then also include penalties and default interest. The context of taxing corporate investments is discussed in the article Corporate Investments in Securities and ETFs.

Risks in establishing and operating a fund

Many fund problems arise already when accepting investors and writing the statute. An investor accepted without a separate declaration or without a written suitability assessment calls into question the status of the fund, and a statute that does not describe valuation and exit leads to disputes among investors. Further problems are brought by late reports, insufficient verification of the source of funds, and a tax regime set up only after investments have started.

Final summary

The article showed that establishing a qualified investor fund is a series of decisions: about the manager and their category, the legal form, the depositary, and the tax regime. The rules for qualified investors did not change in 2026, but the law abolished the requirement for minimum fund capital, and the amendment brought new rules for liquidity, delegation to third parties, and loan-originating funds.

For the management of a company or family considering a fund, three questions are decisive. Who will manage the fund and in which category, how will its operations be financed in the first years, and whether the fund will meet the conditions for a reduced tax rate. Costs, the length of proceedings at the CNB, and the yield left for investors depend on the answers.

Delay is costly here. A statute and contracts prepared in a hurry are difficult to change later, and every change means additional administration; investors accepted without proper documentation can challenge the fund's status, and a tax regime set up additionally is corrected only with difficulty. Rules set up before the first investor are cheaper than their later correction.

Lawyers from the Prague-based ARROWS law firm will design the fund structure, prepare the statute, contracts with the manager, administrator, and depositary, as well as investor documentation, and guide you through the registration with the Czech National Bank. Write to us at consultation@arws.cz or look at our service CNB license and investments.