COREDO > Licensing > Investment Activity Licence

Investment Activity Licence

Investment Activity Licence — EU Authorization to Manage Investment Funds

Investment Activity Licence — authorization to manage investment funds in the EU under UCITS and AIFMD frameworks. It allows managing funds (UCITS, AIF, pension funds, etc.), working with investors, and providing asset management services across the EEA market.

COREDO supports the acquisition of investment licences and the launch of fund activities in Europe.

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Requirements for Obtaining a Licence

To obtain an investment fund management licence, you must meet strict regulatory requirements:

Capital Requirements:

The minimum own funds for managing investment funds is EUR 125,000 for UCITS managers under Directive 2009/65/EC.

For AIF managers of alternative funds, requirements range from EUR 100,000 to EUR 500,000 depending on the strategy and assets under management.

Capital must be fully paid and registered at a credit institution within the EEA.

Competent Management:

Board members, shareholders, and key staff must possess significant professional experience in the investment sector and appropriate financial education.

Impeccable reputation is required. Regulators conduct sanctions list screening (OFAC, EU sanctions, PEP databases) and require integrity tests.

Investment Management Competence:

The company must demonstrate proven experience in portfolio management, risk calculations, compliance with investment limits, and disclosure requirements for investors.

Risk Management Policies and Procedures:

Develop systems to manage operational, credit, market, and liquidity risks.

Regular stress tests of portfolios and monitoring of compliance with investment limits are required.

AML/CFT Compliance:

Implement AML controls and CFT procedures under the new AMLR (2024/1624), including KYC/KYB verification of all investors, transaction monitoring, and annual audits.

Business Plan and Investment Strategy:

Provide detailed descriptions of managed fund types, target investors, and investment strategies.

Forecasts of assets under management, a 3–5-year development plan, and fund marketing methods are required.

IT Infrastructure and Security:

Reliable accounting and reporting systems, investor data protection, backup systems under DORA, GDPR compliance.

How We Work: Licensing Stages

Obtaining authorization to manage investment funds involves several stages. On average, this takes 2–4 months:

Stage 1: Document Preparation (2–4 weeks)

Prepare the registration package: constitutional documents, financial information on owners, management qualification documents, investment strategy, IT systems description, risk management and AML/CFT policies, business plan.

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Stage 2: Application Submission (1–2 days)

File the application with the national financial supervisory authority (CySEC, CNMV, CNB, etc.).

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Stage 3: Application Review (1–3 months)

The regulator analyzes manager qualifications, viability of the fund management strategy, and capital adequacy.

Risk management systems, investors, and beneficial owners are verified through PEP databases.

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Stage 4: Licence Issuance (several days)

Following approval, the licence is registered in the state registry, and the company may begin fund management operations.

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Comparison: Investment Activity Licence vs. Banking Licences

Criterion	Investment Activity Licence	Banking Licences
Minimum Capital	EUR 100,000–500,000	5 million EUR
Fund Management	✅ Yes	❌ No
Accept Deposits	❌ No	✅ Yes
Professional Trading	✅ Yes	✅ Yes
UCITS/AIF	✅ Yes	❌ No
Typical Timeline	2–4 months	3–7 months

Licence in Different Jurisdictions

COREDO provides investment fund management licensing services in the following jurisdictions:

Jurisdiction	Typical Timeline	Notes
Czech Republic	2–3 months	Closest to COREDO HQ, experienced regulator (CNB)
Estonia	2–4 months	Fast review, fintech-friendly environment
Lithuania	2–4 months	Part of EEA, competitive conditions
Cyprus	1–3 months	International financial center, COREDO experience
Spain	3–4 months	Major European jurisdiction
Portugal	2–3 months	Stable regulatory environment

COREDO Service Cost: from EUR 8,500. The exact price depends on the chosen jurisdiction, complexity of the investment strategy, and fund management experience. Contact our team for a detailed quote.

Non-EU Fund Managers Entering the EU Market

COREDO increasingly works with fund managers and investment companies based outside the European Union who seek access to EU investor capital or need EU-regulated fund structures.

United Kingdom. After Brexit, FCA-authorised fund managers lost EU passporting rights. Access to EU investors or fund distribution requires a separate EU licence (e.g. Lithuania, Estonia, Cyprus). A local EU structure and regulatory authorisation are required.

Singapore. Fund managers regulated by MAS under the Securities and Futures Act fall under the EU AIFMD third-country regime. EU market access is possible via national private placement regimes or full EU authorisation through a separate fund structure and licence.

Switzerland. FINMA-regulated fund managers may benefit from limited recognition agreements, but full distribution in the EEA requires EU registration or licensing. The AIFMD third-country regime applies.

Dubai and UAE. Fund and asset managers regulated by DFSA and VARA have no direct access to the EU market. Access to European investors requires establishing a separate EU-authorised fund structure with full regulatory approval.

For all non-EU clients, COREDO provides end-to-end support: from company formation in the chosen EU jurisdiction to licence application, AML compliance setup, and ongoing regulatory reporting.

Passporting and EEA Expansion

A key advantage is the ability to conduct fund management and investment services across all countries of the European Economic Area without separate licences.

The UCITS and AIFM passporting mechanism allows companies to:

Expand fund management to other EEA countries without re-applying for authorization in each jurisdiction
Attract investors from all EU countries without additional permissions
Open branches and representative offices in other jurisdictions

This makes the licence especially valuable for ambitious companies planning European market expansion.

Why Choose COREDO

Proven track record

COREDO has secured 100+ financial licences across the EU since 2016

Access to European investment markets

right to manage funds across all EEA countries

Professional status

recognition as a professional market participant

Passporting

expand to other jurisdictions without additional licences

Attract investors

collect capital from institutional and retail clients

Regulatory support

European regulator oversight ensures reliability

Competitive conditions

low capital requirements (EUR 100,000–500,000) compared to banks

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Case Studies

Case 01Asset Management Company in Czech Republic.

A Czech portfolio manager with EUR 200,000 capital sought UCITS management licence to launch institutional investor fund. COREDO prepared comprehensive fund documentation, risk management framework, and investor prospectus compliant with ESMA requirements. ČNB approved fund licence in 3 months; fund launched with EUR 5 million initial institutional capital within 2 weeks.

Case 02Alternative Fund Operator in Lithuania.

A Lithuanian real estate investment fund manager required an AIFM licence for a EUR 15 million real estate acquisition fund targeting Baltic markets. COREDO coordinated the AIFM application including detailed fund strategy, depositary arrangements, and independent valuation procedures. Licence granted in 3 months; fund completed its first property acquisition within 1 month of authorization.

Case 03Investment Advisory Firm in Portugal.

A Portuguese investment advisory group sought a full investment management licence to offer portfolio management and discretionary investment services to high-net-worth clients. COREDO managed the licensing application including compliance infrastructure, client onboarding procedures, and fee structures compliant with MiFID II. Licence issued in 2 months; firm attracted 40+ institutional clients within 3 months of authorization.

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Our Experts

Pavel Kos

Head of Legal at COREDO since June 2017. Pavel specializes in obtaining investment and financial licences across EU countries. Education: University of Finance and Administration, Prague.

Frequently Asked Questions

What ongoing compliance obligations apply after receiving the licence?

Post-authorization obligations include: annual audit by an independent auditor, quarterly regulatory reporting, ongoing KYC/KYB for all new investors, semi-annual stress testing of portfolios, annual AML/CFT audit, and investor disclosure obligations via KIID (Key Investor Information Document) or PRIIPs KID. Failure to maintain these obligations may result in licence suspension or revocation.

Can a newly established company without an investment track record obtain this licence?

Yes, but regulators scrutinize such applications more closely. Typically required: a comprehensive business plan with realistic AUM projections, key personnel with demonstrable investment management credentials, and a pre-arranged relationship with a depositary bank. COREDO assists in building the pre-licensing infrastructure that demonstrates operational readiness to regulators.

What are the key differences between UCITS and AIF management licences in terms of investor access?

UCITS authorisation permits marketing funds to retail investors across the EEA under full consumer protection rules, including mandatory KIID disclosure and strict investment limits. AIF management authorisation under AIFMD is primarily for professional investors (institutions, qualified private investors); retail distribution of AIF requires additional national private placement procedures in each target jurisdiction. The choice of licence type determines your marketing strategy, compliance costs, and the investor universe you can reach.

What capital must be maintained on an ongoing basis after licence issuance?

Initial capital requirements (EUR 125,000 for UCITS, EUR 100,000–500,000 for AIF) are minimums that must be maintained at all times, not just at application. Additionally, if assets under management exceed EUR 250 million, UCITS managers must hold additional own funds equal to 0.02% of excess AUM, capped at EUR 10 million. Regular capital adequacy reports must be submitted to the national regulator on a quarterly or semi-annual basis.

What is the difference between UCITS passporting and AIFM passporting?

UCITS passporting (under Directive 2009/65/EC) allows cross-border marketing of retail funds to individual investors across all EEA countries. AIFM passporting (under Directive 2011/61/EU) is available for marketing AIF to professional investors only. Retail distribution of AIF requires additional national private placement rules in target jurisdictions. The choice of passporting type determines the investor base you can reach.

Contact COREDO

Ready to obtain an Investment Activity Licence? Request a free consultation from our team — we will select the optimal jurisdiction and provide a cost estimate.

Phone: +420 228 886 867 | Email: info@coredo.eu Address: K Cervenemu dvoru 3269/25a, Prague 3, 130 00, Czech Republic