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In this article I will reveal the complete roadmap for registering an investment fund in Europe – from choosing the optimal jurisdiction to opening a bank account and launching operational activities. You will learn which documents to prepare, which AML/KYC requirements to comply with, how to structure fund governance and how to avoid mistakes that cost entrepreneurs time and money. The article is structured as a practical guide and at the same time as an analytical overview that will help you make strategic decisions at every stage.

Private Equity fund in the EU: what is it and why register it?

Definition of a Private Equity fund and its role in the European economy

But a Private Equity fund is not just a company that manages investors’ money. It is a regulated financial structure that is subject to strict European legal requirements. Each fund must have a license for asset management, comply with requirements for disclosing information about beneficiaries, ensure the protection of investors’ rights and adhere to AML/KYC standards. Ignoring these requirements risks fines, license refusal and even criminal liability.

Registration and licensing — why are they needed?

Investor protection. Regulators require funds to disclose information about their investment strategy, risks, fees and governance structure. This enables investors to make informed decisions and protects their rights.

Prevention of money laundering and terrorist financing. AML/KYC requirements ensure that funds do not become tools for illegal operations. Regulators require verification of sources of funds, identification of beneficial owners and monitoring of suspicious transactions.

Financial system stability. Licensing and supervision prevent the creation of unregulated funds that could pose systemic risk.

Access to investors. Without a license you will not be able to attract capital from professional investors, pension funds and other institutional investors who require regulated structures.

Key requirements of AIFMD and EU directives

According to the AIFMD, each fund must:

• Have a licensed management company (AIFM) that is responsible for investment decisions and risk management.
• Appoint an independent depositary that holds the fund’s assets and monitors compliance with requirements.
• Disclose information about the fund’s beneficial owners in accordance with the 2025 requirements, which have been tightened.
• Comply with AML/KYC requirements, including verification of sources of funds and investor identification.
• Provide annual reports to the regulator and investors.
• Manage liquidity risks and ensure that the fund can meet its obligations to investors.

In addition to the AIFMD, funds must comply with the requirements of the European Securities and Markets Authority (ESMA), national regulators (for example, CySEC in Cyprus, MFSA in Malta, the Bank of Lithuania) and the requirements for digital identification of founders (eIDAS), which came into force in 2025.

Choosing a jurisdiction for a Private Equity fund in the EU

choice of jurisdiction for registering a Private Equity fund in the EU is a strategically important decision that affects tax burden, investor protection and access to the European market. Different countries offer unique conditions for fund formation, so it is important to compare key European jurisdictions, taking into account regulatory, tax and infrastructure requirements.

Comparison of European jurisdictions

Choosing a jurisdiction is a strategic decision that affects licensing timelines, cost, tax burden and management flexibility. COREDO’s practice has shown that there is no universal jurisdiction for all funds — the choice depends on fund size, investment strategy and target investors.

Lithuania, an optimal choice for mid-sized funds (50–500 mln EUR). The Bank of Lithuania is known for its professionalism and transparency of process. Licensing timelines: 3–6 months, which is faster than Luxembourg but slower than Cyprus. Minimum capital: 125,000 EUR. Lithuania offers a good balance between speed, cost and reputation.

Cyprus: a leader in licensing speed, especially for RAIF (Regulated Alternative Investment Fund), which are registered in 2–3 months. CySEC (Cyprus Securities and Exchange Commission) has experience working with international funds. Cyprus also offers tax incentives and management flexibility. At the same time, Cyprus’s reputation has improved in recent years, but it remains less attractive to conservative investors compared to Luxembourg.

Malta, the fastest jurisdiction for licensing (4–8 weeks). The MFSA (Malta Financial Services Authority) is known for its efficiency. Malta offers tax incentives and flexibility. It is a good choice for funds that want to enter the market quickly.

Luxembourg, a premium jurisdiction for large funds (over 500 mln EUR). Luxembourg has the highest reputation globally, attracts conservative investors and offers tax benefits. On the other hand, licensing timelines are 6–12 months and minimum capital is 1,250,000 EUR. Luxembourg suits funds that are ready to invest in reputation and long-term development.

Selection criteria: taxes, speed, flexibility

When choosing a jurisdiction, several criteria should be considered:

Tax residency of the investment fund. Different jurisdictions offer different tax regimes. For example, funds in Cyprus and Malta can obtain incentives on investment income. Luxembourg offers a participation exemption system that helps avoid double taxation. Lithuania offers a standard tax regime with possible optimization. The choice of jurisdiction should be coordinated with the fund’s tax planning.

Licensing speed. If you want to enter the market quickly, choose Malta (4–8 weeks) or Cyprus (2–3 months). If you have time and are willing to wait, Luxembourg offers the best reputation but requires more time.

Management flexibility. Cyprus and Malta offer greater flexibility in fund structuring and asset management. Luxembourg is more conservative and requires adherence to strict rules.

Capital requirements. Luxembourg requires a minimum of 1,250,000 EUR, which may be a barrier for startups. Lithuania, Cyprus and Malta require less capital.

Reputation and investor trust. Luxembourg has the highest reputation, but Lithuania, Cyprus and Malta have also earned investor trust through professional regulation and transparency.

Risks of different jurisdictions

Each jurisdiction has its own risks and features that should be considered:

Lithuania. Risk — political instability in the region (although Lithuania is a member of the EU and NATO). Feature: high compliance requirements and documentation. The Bank of Lithuania requires a detailed description of investment strategy and risk management.

Cyprus. Risk — reputational issues related to past financial scandals. Feature — flexibility in management and tax incentives. CySEC requires thorough verification of sources of funds and identification of beneficiaries.

Malta. Risk: small jurisdiction size and a limited investor base. Feature: fast licensing and tax incentives. MFSA requires adherence to high compliance standards.

Luxembourg. Risk: high capital requirements and long licensing timelines. Feature: premium reputation and attractiveness to conservative investors. CNPD requires compliance with strict governance and reporting rules.

Documents for registering an investment fund in Europe

Documents for registering an investment fund in Europe are the foundation for a successful launch and subsequent operation of your fund. A correctly prepared and complete set of documents is necessary to pass all stages of registration, obtain a license and comply with the requirements of European regulators. Below is an up-to-date checklist of documents required to register an investment fund in 2025.

Complete checklist of documents for 2025

Here is the complete checklist of documents required by regulators:

Fund constitutive documents:

• The articles of association of the investment fund (Articles of Association), which describe the fund’s structure, governance and rules.
• Investment memorandum (Offering Memorandum), which discloses the investment strategy, risks, fees and investment terms.
• Risk and liquidity management policy.
• AML/KYC policy, which describes investor verification procedures and monitoring of suspicious transactions.

Documents on management structure:

• Agreement with the management company (AIFM Agreement), which defines the rights and obligations of the management company.
• Agreement with the depositary, which sets out the depositary’s rights and obligations regarding asset custody and control.
• Agreement with the administrator, which defines procedures for NAV (Net Asset Value) calculation and administration.
• Agreement with the auditor, which defines audit and reporting procedures.

Documents on digital identification of founders (eIDAS):

• Electronic signatures of founders executed in accordance with the eIDAS standard.
• Video verification of founders (in some jurisdictions).
• Proof of the fund’s legal address (for example, a utility bill or lease agreement).
• Proof of sources of funds (bank statement, documents on the origin of capital).

Beneficiary documents:

• Disclosure of information about the fund’s beneficiaries in accordance with the 2025 requirements. This includes names, addresses and ownership shares of all persons who control the fund.
• Beneficiary declaration signed by the founders.

Business plan documents:

• Fund business plan, which describes the investment strategy, target investment objects, expected income and expenses.
• Financial forecasts for 3–5 years.
• Description of target investors and capital raising strategy.

2025 requirements for digital identification of founders

Electronic signatures (eIDAS). All documents must be signed with electronic signatures that comply with the eIDAS standard (Regulation (EU) No 910/2014). This means signatures must be made using a qualified certificate and have legal force.

Video verification. In some jurisdictions (for example, in Cyprus and Malta) regulators require video verification of founders. This means the founder must undergo a video call with a regulator representative or a licensed company that confirms their identity.

Proof of legal address. Regulators require proof of the fund’s legal address. This can be a utility bill, lease agreement or a letter from a bank.

Proof of sources of funds. Regulators require proof of the sources of funds that will be invested in the fund. This can be a bank statement, documents on the origin of capital or a letter from an investor.

Preparing the investment memorandum

The investment memorandum (Offering Memorandum) is a key document that discloses to investors information about the fund, its investment strategy, risks and investment terms. It is not just a marketing document, but a legal document that regulators scrutinize.

The investment memorandum should include:

• Description of the fund. Type of fund (AIF, RAIF, QIF), jurisdiction of registration, management company, depositary, administrator.
• investment strategy. Description of target investment objects, geographic regions, economic sectors, investment time horizon, expected returns.
• Risks. A detailed description of the risks associated with investing in the fund, including market risks, credit risks, liquidity risks, and operational risks.
• Fees and expenses. Description of all fees charged by the fund, including management fees, performance fees, and administrative expenses.
• Terms of investment. Minimum investment size, entry and exit conditions, frequency of NAV calculations, fund liquidation terms.
• Qualified investor criteria. Description of who can invest in the fund (professional investors, qualified investors, retail investors).
• Investor protection. Description of mechanisms to protect investors’ rights, including voting rights, information rights, and rights to judicial protection.

Step-by-step procedure for licensing AIF

The step-by-step procedure for licensing an alternative investment fund involves a series of consecutive formal steps, starting with the preparation and registration of the company and ending with obtaining all necessary permits. Each stage requires attention to detail and strict compliance with regulatory requirements, which ensures the legality and transparency of the fund’s future activities.

Preparation and company registration

The first stage is the preparation and registration of the company that will act as the fund. This stage includes several key steps:

• Choice of jurisdiction and fund type. As discussed above, the choice of jurisdiction is critical. You also need to choose the fund type: AIF (alternative investment fund), RAIF (Regulated Alternative Investment Fund) or QIF (Qualified Investor Fund). Each type has different requirements and licensing timelines.
• Reservation of the fund name. You must reserve the fund name in the national company register. The name must be unique and meet the regulator’s requirements. For example, the name should include words that indicate it is a fund (for example, “Fund”, “Fonds”, “Fondas”).
• Preparation of the charter and incorporation documents. You must prepare the fund’s charter (Articles of Association), which describes the fund’s structure, governance and rules. The charter must comply with national legislation and AIFMD.
• Registration of the company in the local register. After preparing the documents you must register the company in the local company register. This usually takes 1–2 weeks.

Preparation of documents for the regulator

The second stage is the preparation of the full package of documents for the regulator. This stage includes:

• Preparation of the investment memorandum. As discussed above, the investment memorandum must be detailed and professional. The regulator will thoroughly review each section.
• Development of risk management and liquidity policies. You must develop policies that describe how the fund will manage risks and liquidity. These policies must be aligned with the fund’s investment strategy.
• Preparation of AML/KYC policies. You must develop policies that describe how the fund will verify investors and monitor suspicious transactions. These policies must comply with the EU Anti-Money Laundering Directive (AMLD5).
• Appointment of key persons. You must appoint a management company (AIFM), an administrator, a depositary and an auditor. Each of these parties must be licensed and experienced in working with investment funds.

Submitting the application to the regulator

The third stage is submitting the application to the regulator. This stage includes:

• Assembling the full package of documents. You must collect all the documents required by the regulator and submit them in the prescribed format.
• Submission of the application to the national regulator. You must submit the application to the national regulator (for example, CySEC in Cyprus, MFSA in Malta, the Bank of Lithuania). The application is usually submitted via an online portal.
• Responses to regulator queries. After submitting the application, the regulator may ask questions or request additional documents. You must respond to these requests within the specified time (usually 2–4 weeks).
• obtaining a license or a registration number. After the application is approved the regulator issues a license or registration number confirming that the fund is registered and may begin operations.

Opening a bank account: operational launch

The fourth stage is opening a bank account and operational launch. This stage includes:

• Preparation of documents for the bank. You must prepare the documents required by the bank, including a copy of the license, the fund’s charter, digital identification documents of the founders, and proof of source of funds.
• Opening a corporate account. You must open a corporate account at a bank that will hold the fund’s assets. The bank may require a video call with a fund representative to verify identity.
• Deposit of the minimum capital. You must deposit the minimum capital into the fund’s bank account. The amount of minimum capital depends on the jurisdiction and fund type.
• Launching a marketing campaign. After obtaining the license and opening the bank account you can start attracting investors.

The Role of Legal Opinions in Minimizing Legal Risk

Legal Opinion in Due Diligence

Key elements of a Legal Opinion for investment companies

Mandatory sections of a Legal Opinion

Specifics of a Legal Opinion on AML and finance

Common mistakes when preparing:

• Insufficient detail in AML procedures
• Lack of references to applicable legislation
• Vague wording without concrete conclusions

Legal Opinion in international transactions

Legal Opinion for venture capital investments

Legal Opinion for M&A

Legal opinion on obtaining financial licenses

Step-by-step algorithm for preparing a Legal Opinion

Common mistakes when preparing a legal opinion

Legal Opinion in different jurisdictions

Legal Opinion for the EU

Legal Opinion for Asia

Legal Opinion for Africa

The impact of a Legal Opinion on attracting investment

Checklist: what to include in a Legal Opinion

• Clear definition of the subject of the opinion and the addressee
• Brief summary of conclusions
• Description of factual circumstances and the company’s structure
• Analysis of applicable legislation (references to articles)
• Detailed analysis of AML and KYC procedures
• Analysis of corporate governance and ownership structure
• risk assessment of non-compliance with financial regulation
• Analysis of contractual obligations and potential disputes
• Assessment of compliance with data protection requirements (GDPR)
• Clear conclusions and recommendations
• Limitations and disclaimers
• Signature of a qualified lawyer, date, contacts
• References to sources and documents
• Appendices (copies of key documents)

Practical recommendations

What is the real risk for businesses? Why can even formally missing deadlines threaten not only six-figure fines, but also account freezes, license revocations and the loss of partners?

Здесь: не только аналитика, но и практические шаги, чек-листы и стратегические идеи, которые команда COREDO успешно реализует для клиентов в самых сложных юрисдикциях. Прочитайте статью до конца, чтобы не допустить критических ошибок и выстроить устойчивую систему AML compliance.

What is an AML audit for businesses in the Czech Republic

In the context of tightening regulatory requirements, it is precisely the AML audit that helps companies not only comply with the law but also minimize the risks of financial sanctions and reputational damage.

Definition of an AML audit and its role in compliance requirements

Internal audit allows identifying gaps in procedures, assessing the effectiveness of current measures, while an external audit provides independent expertise and preparation for regulatory inspections. COREDO’s practice confirms: regular auditing reduces the risk of fines, account blocking and loss of licenses, and also increases the trust of banks and partners.

New AML requirements in 2025

From 2025, the FAU (Financial Analytical Office of the Czech Republic) tightened the requirements: the list of obliged entities has been expanded, mandatory registration of an AML contact person was introduced, procedures for identifying beneficial owners have been strengthened, and all processes must be documented and automated. The solution developed by COREDO for international clients includes integrating the new requirements into business processes and preparing for the deadline of 1 February 2025.

Penalties for AML violations in the Czech Republic

Violations are recorded in public registers, which leads to reputational losses and the severing of relationships with banks and investors. In COREDO’s practice there have been cases when late registration of an AML contact person led to the blocking of all outgoing payments until the violation was remedied.

AML audit in the Czech Republic, stages of implementation

Conducting an AML audit in the Czech Republic is not a one-time formality but a comprehensive process required for any business subject to anti-money laundering requirements. A step-by-step guide to the stages of an AML audit will help to understand the details of mandatory procedures, prepare the business for regulator inspections and build a compliance system that is resilient to risks and compliant with Czech legislation.

Preparation and planning of the AML audit

The first step is defining the scope of the audit and collecting all documentation: AML policies, KYC files, audit protocols, transaction registers. COREDO’s experience shows: thorough preliminary diagnostics make it possible to identify hidden risks and optimally allocate resources. At this stage the team is formed, key risk areas and audit priorities are determined.

Risk assessment and jurisdiction analysis

The COREDO team uses modern transaction analysis and client profiling tools, which makes it possible to detect anomalies and suspicious patterns at an early stage.

Review of client KYC procedures

The implementation of digital onboarding and remote verification, carried out by COREDO for fintech companies, speeds up the process and reduces the number of errors.

Analysis of transaction monitoring and suspicious operations

Modern transaction monitoring systems with AI support allow detecting suspicious operations in real time. It is important to assess the accuracy of anomaly detection, the level of false positives and the effectiveness of automated filters. In one of COREDO’s cases, the integration of AI modules reduced the number of false positives by 45% without loss of monitoring quality.

Review of sanctions screenings and PEP monitoring

Screenings must be integrated into the onboarding process and updated at least once a month. COREDO’s solution for the banking sector includes automatic matching with global lists and maintaining a history of checks.

Stage 6: Assessment of internal policies and documents

Internal AML policies must not only be formally approved but also regularly updated to reflect legislative changes. Special attention is paid to audit protocols, maintaining monitoring logs and the correctness of transaction registers. COREDO’s practice shows: a clear structure and allocation of responsibilities significantly increase the resilience of the compliance system.

Review of the suspicious transaction reporting system

It is important to ensure the completeness and quality of information, document all stages of preparation and analyze the history of submitted reports. In one of COREDO’s projects, automation of STR preparation reduced response time to 2 hours.

Assessment of AML competencies and personnel

Since 2025 the AML contact person must have confirmed qualifications and experience in the field of compliance. Assessing staff knowledge, regular training and testing are mandatory elements of an effective AML program. COREDO implements comprehensive training modules and retraining programs for clients from various industries.

Testing and verification of system effectiveness

Staff testing, analysis of previous incidents, internal audit and evaluation of training effectiveness make it possible to identify systemic problems and address them in a timely manner. The solution developed by COREDO provides for regular stress tests and an audit of the effectiveness of compliance processes.

Stage 10: Preparation of the Report and Recommendations

COREDO’s practice confirms: a clear follow-up audit plan increases the likelihood of successfully passing regulatory inspections.

AML compliance in the Czech Republic: requirements

Key requirements for AML compliance in the Czech Republic: these are not formal rules but a comprehensive system of measures that affects governance structure, internal processes and state supervision. New obligations came into force in 2025, including the appointment and registration of an AML contact person, without which companies risk facing serious sanctions and loss of trust from partners and regulators.

Appointment and registration of the AML contact person

Requirements include relevant education, experience in AML/compliance and timely updating of data via datová schránka. The contact person bears personal responsibility for interacting with regulators and the timely submission of STRs.

Requirements for internal AML policies

It is important to document all processes, allocate responsibilities and regularly update policies in accordance with new requirements.

Requirements for identification of beneficial owners

The tightening of requirements in 2025 requires the precise identification and disclosure of information about beneficial owners, regular verification of data and updating information when ownership structures change. All information must be entered into the register of beneficial owners and be available for inspection by regulators.

Requirements for KYC and Due Diligence procedures

All due diligence results are documented, and eKYC is integrated into onboarding processes to speed up and improve the accuracy of verification.

Transaction monitoring: detection of suspicious transactions

Criteria for identifying suspicious transactions must be formalized, and STRs must be submitted to the FAU within the established deadlines with a full package of information.

AML compliance solutions for the Czech Republic

Technological solutions for AML compliance in the Czech Republic are becoming increasingly sought after against the backdrop of tightening legislation and the rapid development of digital financial services. The integration of automated tools enables companies not only to meet regulatory requirements but also to significantly improve the efficiency of data processing and risk management. Below we will examine the key issues in choosing and implementing such solutions in practice.

Automation of AML processes: selection and implementation

For medium-sized companies, cloud-based transaction monitoring systems with the ability to integrate with CRM and ERP are optimal. Implementing such solutions, as COREDO’s experience has shown, makes it possible to reduce costs by 30–40% and increase the speed of transaction processing.

How AI detects suspicious transactions

AI and machine learning make it possible to detect complex anomalies, reduce false positives and analyze large volumes of data. The use of ML models in COREDO projects has shown an increase in the accuracy of detecting suspicious transactions to 98% and a reduction in the time to process STRs.

eKYC and digital onboarding: 2025 requirements

From 2025, eKYC and digital onboarding are becoming the standard for all companies subject to AML. The eIDAS regulation requirements include the use of biometric identification, remote verification and integration with government databases. COREDO’s solutions allow faster client onboarding and ensure full compliance with the new requirements.

Checklist for Preparing for an AML Audit in the Czech Republic

Requirements for different categories of companies

Specific requirements for different categories of companies determine the level of business responsibility and formal procedures under the law. For each sector of activity, not only the list of mandatory measures changes, but also the depth of control: this is particularly noticeable in the example of AML requirements for real estate agencies in the Czech Republic, where compliance rules and standards are updated annually.

AML requirements for real estate agents in the Czech Republic

Internal control and documentation of all operations are mandatory.

AML requirements for accounting and auditing firms

Accounting and auditing firms must implement internal AML control, train staff, record all suspicious operations and interact with the FAU upon their detection. In COREDO’s practice, automation of reporting has reduced the administrative burden by 25%.

AML requirements for financial and payment companies

Financial institutions supervised by ČNB are required to comply with enhanced requirements for licensing, capital, reserves and monitoring procedures. COREDO’s solutions include comprehensive preparation for licensing and support for interaction with ČNB and FAU.

Risk Management and Reputation

risk management and reputational security are the foundation for the resilience and development of modern business. An effective strategy in this area not only enables timely identification and mitigation of threats, but also strengthens the trust of clients, partners and investors. Below we will consider the key aspects of AML risk assessment and other important elements of a reputational security framework.

AML Risk Assessment in Business

The risk-based approach methodology involves regular risk assessments of customers, transactions, jurisdictions and products. The use of automated tools (for example, risk scoring platforms) allows COREDO to quickly identify and document critical risk areas.

Protection against Reputational Risks and Breaches

Violations of AML requirements lead to long-term consequences: loss of banks’ trust, contract terminations, and reduced investment attractiveness. Implementing whistleblowing procedures and fostering a culture of compliance are key elements of long-term business resilience.

Optimization of AML system costs

Optimizing operational costs when implementing AML systems has become a key factor in the long-term sustainability and efficiency of financial organizations. Today process automation of compliance allows significantly reducing the time, resources and costs related to combating money laundering, while reducing operational risks and increasing the transparency of business processes.

In this context, it is important to consider how to properly evaluate the ROI on investments in AML audit and automation, and which areas of optimization deserve attention.

Return on investment for AML audit and automation

According to COREDO’s experience, implementing automated AML systems pays off within 12–18 months through reduced operational costs, minimized fines and improved process efficiency. Performance metrics include TCO, onboarding speed and the percentage of detected suspicious transactions.

Outsourcing or an in-house compliance department

Outsourcing compliance functions is appropriate for small and medium-sized companies that need to rapidly scale AML operations. An in-house compliance department is necessary for large organizations with high transactional activity. Hybrid models implemented by COREDO enable optimal resource allocation and cost reduction.

Key Findings and Recommendations

For entrepreneurs:

• Appoint and register an AML contact person by 1 February 2025
• Conduct a full audit of procedures and address gaps
• Invest in monitoring automation
• Build a compliance culture through regular training

For executives and Compliance Officers:

• Develop an AML compliance development strategy with KPIs
• Use a risk-based approach to prioritize resources
• Integrate AML processes with CRM
• Conduct internal audits quarterly

For marketers and consultants:

• Emphasize experience working with the new requirements
• Create educational content
• Develop partnership programs with AML providers
• Showcase successful implementation cases

Universal 3-month checklist:

1. January 2025: audit, appointment of contact person, policy updates
2. February 2025: registration of the contact person with the FAU, implementation of automation
3. March 2025: staff training, KYC updates, internal audit

Additional resources and contacts

• Financial Analytical Office (FAU): AML regulator in the Czech Republic
• Czech National Bank (ČNB): supervision of financial companies
• European Commission – source of information on AMLD, 6AMLD
• COREDO consultants – expertise in legal and financial support for compliance projects

COREDO’s experience proves: a systematic approach, modern technologies, and professional support are the key to long-term success in the European market.