How to Obtain a Czech National Bank Licence for Financial Institutions

17.4.2026 | ARROWS law firm

To operate as a financial institution in the Czech Republic, a licence from the Czech National Bank is essential. However, the process of obtaining it is complex and full of pitfalls. An improperly prepared application can lead to delays, rejection, or subsequent sanctions. ARROWS, a Prague-based law firm, specialises in regulatory processes and helps clients navigate the entire licensing procedure efficiently, minimise risks, and avoid mistakes.

The photograph shows a lawyer consulting on obtaining a Czech National Bank (CNB) licence.

Regulatory environment for financial institutions in the Czech Republic
Initial phase: when you actually need a licence and how to start building it
Related questions for initial orientation and selecting the right licence
Preparing the application: where things get complicated
The licensing procedure before the CNB itself and how to handle it
Table of key risks and how to address them
Final summary

Quick summary

Obtaining a licence from the Czech National Bank (CNB) is not mere paperwork – the regulator carefully assesses capital, management expertise, the effectiveness of compliance, and the realism of the business plan. An incorrectly prepared application leads to delays, rejection, or unnecessary financial losses.
In practice, the licensing procedure itself takes 6 to 12 months – and that only from the moment the CNB considers the application complete. Each additional question from the regulator extends the timeline. The key to success is meticulous preparation of the documentation and an experienced legal representative familiar with CNB practice.
Obligations do not end with the granting of the licence. Licence holders are subject to ongoing CNB supervision, must meet reporting obligations, comply with AML/CFT rules and capital requirements. Breaches may result in fines in the tens of millions of Czech crowns, or even withdrawal of the licence.

Obtaining a licence from the Czech National Bank (CNB) is not a mere administrative formality. The regulator carefully assesses not only the submitted documents, but also the applicant’s actual readiness, staff qualifications, and the viability of the business plan. Errors in preparing the application are often the reason for its rejection or significant delays in the overall process.

The licensing process usually takes longer than entrepreneurs expect. Although the statutory decision-making time limits are 3–6 months, in practice proceedings are often prolonged due to the bank’s workload and the need to supplement or clarify supporting documents. It is more realistic to plan for six months to one year.

A key role is also played by setting up a robust internal control system and complying with compliance rules. The CNB strictly verifies the effectiveness of anti-money laundering and counter-terrorist financing (AML/CFT) measures and risk management. Deficiencies in these areas are an absolute obstacle to granting a licence.

Even after the licence is granted, obligations do not end. Licence holders are subject to continuous monitoring by the CNB, must regularly report data, and meet capital adequacy requirements. They must also be prepared for inspections. Breaches of these obligations may result in fines in the tens of millions of Czech crowns.

Regulatory environment for financial institutions in the Czech Republic

The Czech National Bank (CNB) has been the central regulator for all segments of the financial market since 2006. This means that whether you want to establish a bank, a payment institution, trade in securities, manage investment funds, or operate in insurance, everything is handled through the CNB and its network of legal regulations.

The regulator maintains a strong position and decides who may or may not operate in the financial market. A licence is permission to provide financial services, but it also entails compliance with a range of rules. Without a licence, you cannot operate legally. When setting up the structure and responsibilities (e.g., the board of directors, compliance, internal control system), advice in the area of corporate law, holdings and structures can also help. Attempting to operate without a licence carries the risk of high fines, criminal liability, and an effective ban on activity.

That is why, in recent years, more and more financial institutions have been turning to specialists. It is not only about formally correct documents, but about functional and robust systems. The attorneys from ARROWS, a Prague-based law firm, have experience with the CNB and know what the regulator expects, helping to set up the entire process.

Initial phase: when you actually need a licence and how to start building it

The situation handled by the attorneys from ARROWS, a Prague-based law firm, usually starts simply: the client has a business idea, wants to implement it, and finds out that they need authorisation from the CNB.

Many entrepreneurs are not sure at the outset what type of licence they actually need. For an initial assessment of whether your model falls under CNB regulation and what type of authorisation may be relevant, the CNB licences & investments service may be useful. For example, Act No. 256/2004 Coll., on Capital Market Undertakings (ZPKT), contains a broad definition of investment services. Not only direct trading, but also “carrying out preparatory work” or “providing recommendations” may require a licence under Section 4 of the ZPKT. Entrepreneurs may therefore encounter regulation without fully realising their investment activity.

Similarly, payment institutions cannot provide their services without authorisation from the CNB. The statutory time limit for issuing authorisation to operate as a payment institution is set out in Section 35(1) of Act No. 370/2017 Coll., on Payment Systems (ZPS), at 3 months from the date the proceedings are initiated, provided the application is complete. Deposits may only be accepted by a bank with a minimum registered capital of CZK 500 million, as stipulated in Section 4(1) of Act No. 21/1992 Coll., on Banks (ZOB). An electronic money institution has different requirements. Each licence is specific.

The attorneys from ARROWS, a Prague-based law firm, begin this phase with a qualified assessment of your business model. Their task is clear: to determine which specific licence you need, what conditions you must meet, and what needs to be prepared. This is a complex process that requires in-depth expertise.

Preparing the application: where things get complicated

Once it is clear which licence you need, the phase that determines success or failure begins. Preparing the application is not just about collecting documents and sending them to the CNB. The CNB requires a range of documents and supporting materials that must be not only formally correct, but also substantively relevant and realistic. In the licensing procedure, the regulator assesses four key pillars.

First pillar: financial resources. You must demonstrate that you have sufficient start-up capital and that its origin is lawful. This is not just a matter of: “Here is a million in the bank.” You need to provide source documents, statements, transaction history, tax returns and, where applicable, contracts showing where the money came from. The CNB does not trust a “magical” appearance of capital and, in more complex cases, also requires identification of the beneficial owner, anti-corruption checks and verification that the source is not linked to criminal activity.

Second pillar: professional competence and integrity of senior management. This is critical. The CNB is interested in who will be running the business. A senior manager must have a combination of relevant education, proven experience in the financial sector and, typically, successfully passed professional examinations, as required for example by Section 10a of the Capital Market Undertakings Act (ZPKT).

The regulator also assesses the management team as a whole – collectively, the individuals must have knowledge covering all aspects of your activities. A “senior manager” under the ZPKT or the Payment System Act (ZPS) means a person who is a statutory body, a member of a statutory body, an executive director or another person effectively authorised to manage the applicant’s activities, or a person responsible for managing key functions. The CNB may require senior managers to provide an extract from the Criminal Register, details of previous experience and evidence of education.

Third pillar: organisational structure and internal control system (ICS). This is where significant risk is hidden. The CNB will not grant a licence unless you have functional compliance in place, an AML/CFT system (under Act No. 253/2008 Coll., on certain measures against the legalisation of proceeds of crime and the financing of terrorism), risk management, internal audit and other safeguarding mechanisms, as required for example by Section 15 of the ZPKT or Sections 30 et seq. of the ZPS.

This is not just paperwork. In its supervisory practice, the regulator finds that many institutions have “formal” compliance that does not actually work. If an inspection shows that compliance is only a façade, you face a fine or even revocation of the licence.

Many mistakes occur precisely in this area. Applicants prepare internal policies that are formally correct, but in practice are not usable or do not reflect the real risk of their business. The CNB identifies this during its assessment and returns the application for revision.

Fourth pillar: realism of the business plan. The CNB examines whether your business plan makes sense. This is not a literary contest. The point is for the regulator to see that you understand the market, have realistic forecasts, know who you will do business with, and have a clear idea of how you will generate revenue. The business plan includes a description of the intended activities, target clients, security measures and IT infrastructure.

ARROWS, a Prague-based law firm, often sees plans that are either too optimistic or, conversely, too vague. Neither is acceptable. Preparing all these materials usually takes 1–2 months with professional support. Without expert assistance, it tends to take longer and involves more errors.

The licensing proceedings before the CNB and how to handle them

Once you submit a complete application, the official time limit begins. For a bank it is 6 months (Section 7(1) of the Banks Act (ZOB)); for a payment institution it is 3 months (Section 35(1) of the ZPS). This period is calculated only from the moment the CNB considers the application complete. However, there is a major “but”: in practice, during the proceedings the CNB often sends additional questions or requests clarification. Each such request extends the time limit. The proceedings can therefore drag on for months.

During the proceedings, the CNB may:

Ask you to explain or specify information you provided in the application.
Ask you for additional documents.
Initiate a meeting with you and your advisers.
Verify the information you provided (especially the origin of capital and the integrity of individuals).
Request statements from foreign regulators if you have foreign owners or management.

ARROWS, a Prague-based law firm, represents its clients at this stage in communications with the CNB. This is not just a matter of “sending an email and waiting”. Responses to questions must be precise, factual and must not contradict what you stated in the application. A single mistake may lead to an assessment that you did not provide complete or truthful information – and that is a ground for rejection.

In practice, the proceedings therefore take 6 to 12 months from the submission of a complete application. During that time, your company cannot move forward with anything else that depends on the licence.

After the licence is granted: obligations you must not ignore

When you finally receive the decision granting the licence, it is not the final finish line. It is only the beginning.

Once you start operating, you enter the ČNB’s supervisory regime. Supervisory activity covers a wide range of matters: compliance with capital requirements (Pillar 1 and Pillar 2 under Regulation (EU) No 575/2013 (CRR) and Directive 2013/36/EU (CRD IV)), fulfilment of disclosure obligations, regulatory reporting, AML/CFT compliance, risk management and other obligations. All of these have their deadlines, forms and details.

Specifically, you may face a fine or other sanctions if:

You fail to submit statistical reports or statements on time.
You breach AML/CFT rules or fail to properly identify clients.
You do not maintain sufficient capital in line with the prescribed requirements.
You fail to report a suspicious transaction.
You breach prohibitions and orders that the ČNB may issue during supervision.
Your internal control system does not function during a ČNB inspection.

Fines can range from hundreds of thousands to tens of millions of Czech crowns, depending on the seriousness of the breach and the duration of the unlawful situation. In extreme cases, the ČNB may also revoke the licence.

Attorneys from ARROWS advokátní kancelář help their clients ensure they understand and comply with their obligations. An institution that meets regulatory requirements is more competitive and minimises the risk of sanctions.

Table of key risks and how to address them

Potential issues	How ARROWS helps (office@arws.cz)
Incomplete or poorly prepared application leading to rejection: Errors in documentation, an unrealistic business plan or missing evidence of the source of capital may result in the application being rejected and the loss of months of time and the investment made in preparation.	Attorneys from ARROWS advokátní kancelář will provide a comprehensive analysis of your business model, high-quality preparation of all supporting materials and a review of documents before filing. They know the ČNB’s practice and what the regulator focuses on.
Extension of the proceedings due to additional questions from the ČNB: If your responses to the ČNB’s questions are not precise, logical and complete, you risk further and further questions that can extend the proceedings to a year or more.	Attorneys represent clients in communications with the ČNB and draft responses that are substantive and do not give the regulator grounds for further doubts. Experience with the ČNB’s practice is essential here.
Weak internal control system, compliance or AML/CFT uncovered by the regulator during evaluation: If your system is not functional or is merely formal, the ČNB will return the application or later, after the licence is granted, impose a fine or revoke the licence.	Attorneys from ARROWS advokátní kancelář design and build functional, robust compliance and AML/CFT systems that truly work and withstand inspection. They participate in implementing these systems into your operations.
Failure to comply with obligations after the licence is granted – a fine of up to tens of millions of Czech crowns: Incorrect reporting, AML/CFT breaches, insufficient capital or a non-functioning control system may lead to fines in the millions.	ARROWS provides long-term legal advice and monitoring of obligations and helps clients set up processes so that obligations are met without risk. If issues arise with the regulator, ARROWS also assists with defence or negotiations regarding sanctions.
Complexity of transitional measures and new regulations (e.g., DORA, MiCA): New rules such as Regulation (EU) 2022/2554 of the European Parliament and of the Council (DORA) on digital operational resilience and Regulation (EU) 2023/1114 of the European Parliament and of the Council (MiCA) on markets in crypto-assets introduce additional complex requirements. If you ignore them, you risk sanctions.	Attorneys from ARROWS monitor legislative changes and advise clients on how to address them so that your IT and compliance strategy meets the latest regulatory requirements.

Specific situations: foreign owners, branches and special permits

The situation becomes more complicated if you have foreign owners or management. The ČNB then usually requires a statement from the supervisory authority in the country where the foreign owner’s headquarters has its principal office. This prolongs the licensing process.

If you are a bank already licensed in the EU and you want to operate in the Czech Republic through a branch, you can use the “single licence” principle (so-called passporting). In such a case, you do not need to file a new licence application, but you must complete the notification procedure, as permitted, for example, by Section 5b of the ZOB, Section 15 of the ZPKT or Section 38 of the ZPS. This also has its requirements and deadlines.

Some activities require additional special authorisation. If, as a bank, you want to provide investment services, you must obtain an investment services authorisation in addition to the basic licence. This brings another layer of compliance and also further scrutiny by the ČNB.

In such situations, legal advice is almost essential. Attorneys from ARROWS advokátní kancelář have experience with cross-border situations and know how to deal with the complexities of foreign supervision.

Final summary

The path to a ČNB licence is complex, demanding and full of pitfalls. It is not just paperwork. It is about ensuring the regulator sees that you have sufficient capital, the right people, functional systems and a realistic plan. Mistakes in preparation can cost you months of time and significant financial resources invested in preparing documents that the ČNB will return.

The proceedings themselves then take 6 to 12 months. Even after the licence is granted, it does not end – long-term obligations towards the regulator begin, which you must fulfil diligently. Mistakes after the licence is granted may lead to fines in the tens of millions of Czech crowns or even revocation of the licence.

For this reason, more and more financial institutions decide to bring experts into the team already at the preparatory stage. Attorneys from ARROWS advokátní kancelář have experience with the process, know the ČNB’s expectations and know the typical mistakes that applicants make without assistance.

If you do not want to risk mistakes, delays and financial losses, it is safer to go through the process with those who know it. Contact office@arws.cz – attorneys from ARROWS advokátní kancelář will review your situation and tell you how to meet regulatory requirements without unnecessary obstacles.

FAQ - most common questions about ČNB licensing

1. What exactly is the fee for the licence application itself (administrative fee)?
The administrative fee varies depending on the type of licence and is set out in Act No. 634/2004 Coll., on Administrative Fees. For example, for a bank the administrative fee is CZK 1,000,000 (item 144 of the Schedule of Fees). For an application for authorisation to operate as an investment firm it is CZK 100,000, for an investment intermediary CZK 10,000 (item 146 of the Schedule of Fees). For a payment institution it is CZK 50,000 (item 145 of the Schedule of Fees). So do not count only the administrative fee, but also the costs of lawyers, accountants, consultants, and all preparation of the documentation.

2. Can the Czech National Bank (ČNB) refuse the licence and, if so, is it possible to defend against this?
Yes, the Czech National Bank (ČNB) may refuse the licence if it finds that you do not meet the conditions. You may file a remonstrance against the refusal decision, which is decided by the ČNB Bank Board pursuant to Section 147(1) of Act No. 6/1993 Coll., on the Czech National Bank. However, a remonstrance is not always successful, especially where there are fundamental shortcomings in the preparation. Our attorneys in Prague at ARROWS can assist you both with preparing a high-quality initial application and, if necessary, with your defence in the remonstrance proceedings.

3. What happens if, during the proceedings, the ČNB changes the legislation or issues new regulatory guidance?
If a legislative change occurs during your proceedings, you are obliged to respond to it and ensure that your application complies with the new rules. This is a natural part of the process, even though it extends the proceedings. ARROWS attorneys monitor legislative changes and advise clients on how to address them without unnecessary delay.

4. Is it mandatory to participate in training under the Capital Market Undertakings Act in order to obtain a licence?

The Capital Market Undertakings Act requires that a senior manager has adequate education and experience, as set out in Section 10a of the Capital Market Undertakings Act. Certain persons must pass professional examinations. These are not part of the licence application, but they should be completed before filing.

5. What if, after the licence is granted, we want to change the scope of our services or the senior manager?
Any material change must be notified to the ČNB without undue delay, as provided for, for example, in Section 10b of the Capital Market Undertakings Act, Section 37 of the Payment System Act, or Section 16 of the Act on Banks. In some cases this is a simplified procedure (e.g., extending the authorisation to include a new service), in others it involves waiting for the relevant consent of the regulator. Do not expect changes to happen overnight.

6. What happens if I fail to comply with obligations after the licence is granted, for example if I do not submit reports on time?
The fine imposed by the ČNB may range from hundreds of thousands to tens of millions of Czech crowns, depending on the seriousness of the breach and the duration of the unlawful situation. Failure to comply with reporting obligations may also lead to the initiation of administrative proceedings. In the worst cases, the ČNB may even revoke the licence.

Notice: The information contained in this article is of a general informational nature only and is intended for basic guidance on the topic under the legal framework as of 2026. Although we take the utmost care to ensure accuracy, legal regulations and their interpretation evolve over time. We are ARROWS advokátní kancelář, an entity registered with the Czech Bar Association (our supervisory authority), and for maximum client security we are insured for professional liability with a limit of CZK 400,000,000. To verify the current wording of regulations and their application to your specific situation, it is necessary to contact ARROWS advokátní kancelář directly (office@arws.cz). We accept no liability for any damages arising from the independent use of the information in this article without prior individual legal consultation.

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