Trust fund in the Czech Republic

The Czech Republic currently offers the possibility to establish and operate trust funds as a property organisation. However, before launching such a fund, it is necessary to consider several peculiarities related to its registration. Below, we will look at the peculiarities of setting up a trust fund in the Czech Republic, the main requirements for its operation and how we can help you at all stages of its establishment.

What is a trust fund in the Czech Republic?

A trust fund is an organisation established to manage assets for the benefit of certain persons or purposes. The legal status of a trust fund is laid down in §1448 of the Civil Code of the Czech Republic. Trust funds are not legal entities, they have no legal personality or registered office. However, according to the Czech Tax Code, a trust fund is a taxable entity and is treated as a legal person in the tax process.

In other words, a trust is a form of management of any assets created by separating them from the settlor’s estate, after which such assets are neither the property of the trustee, the settlor, nor the beneficiary.

A trust may be established by assigning the settlor’s assets by contract in the form of a notarial deed or a will. Trusts can be used primarily as a tool for protecting and long-term managing corporate and family property, ensuring the confidentiality of ownership information, and structuring future asset transfers in a safe and stable manner.

What is the Order of our Service

In order to obtain a trust fund licence in the Czech Republic, there are specific procedures that the Czech Civil Code and the Czech Tax Code regulate.

1. The first step is to make preparations, which include:
   • selecting and determining the number of trustees and their procedures;
   • drafting a charter;
   • designation of the assets that will make up the fund;;
   • determining the terms of payment from the fund, information on the duration of the fund (if no such information is provided, it is presumed that the fund will operate indefinitely); and
   • defining the objectives of the foundation’s activities (private or public).

   Please be advised that these documents must comply with the laws of the Czech Republic.

2. After complying with the registration procedure, the trustee must accept the mandate to manage the fund.
3. Further, the trustee must apply for legal entity registration to the tax administrator, whose competence includes the decision on registration.
4. After checking the documents, if there are no irregularities, the tax administrator will assign a taxpayer identification number to the trust fund.
5. A trust fund is created when the entry is made in the register of trust funds.

You will also need to open a bank account.

With years of experience in trust registration, we can accompany you through each of the above steps:

• prepare for you a trust fund agreement between the settlor and the trustee;
• prepare a charter;
• to register the foundation in the registry;
• to represent your interests in the state authorities throughout the registration procedure.

Your success is our priority!