Over the past two years I have increasingly seen the same scenario: a stable, profitable investment company suddenly gets refused account opening in the Czech Republic, or a bank, without warning, initiates the closure of accounts in the Czech Republic and freezes operations. In one recent case a client received refusals from three Czech banks in a row within six weeks, despite a perfect audit in the EU and an impeccable track record in another jurisdiction.
Why do banks refuse service to investment companies even with a transparent background, real investments, and a clear business model?
How unique is the situation to the Czech Republic, and can you plan your structure in advance to avoid account freezes in the Czech Republic six months after launch?
In this article I will analyze why Czech banks close investment accounts and refuse to provide services, how Czech KYC requirements, AML regulations, EU sanctions and the 14th package affect this, and what strategies the COREDO team is already using today to:
– minimize the risk of AML refusal in the Czech Republic,
– pass KYC verification for investments on the first try,
– build a sustainable banking setup in the Czech Republic and beyond.
If you are planning or already running an investment business with Czech banks (FioBanka, Creditas, UniCredit, ČSOB), I recommend reading the material in full: there will be no generic advice here. I will break down the real banking risk into concrete blocks and show how we at COREDO work with each of them in practice.
Why banks refuse to work with investment companies in Czechia
In recent years the Czech banking sector has undergone a significant tightening of financial compliance and risk management. The Czech National Bank (CNB) has been steadily implementing European banking standards, and international partners are increasing requirements for correspondent accounts in dollars and euros. The result is the same: the refusal of banks to serve investment firms in Czechia has become more the rule than the exception.
What our clients encounter in practice:
- FioBanka and Creditas carefully check “economic substance”, the reality of operations, local presence and a sustained link to Czechia (sustained link to Czechia). The absence of an office, employees or a clear economic rationale for the location often leads Czech banks to close investment accounts already after initial opening.
- UniCredit and ČSOB are increasing their focus on non‑EU residents, especially with complex ownership structures and transactions with third countries: from investment funds to family offices.
Inside banks decisions are made not by front‑office managers but by compliance officers relying on internal risk models: sector, client jurisdictions, sanctions risks, UBO transparency, and transaction history. For investment companies this means one thing: formally correct documents are no longer sufficient; what matters is the transparency of the company’s structure and its logic for the specific bank.
AML refusals in Czechia and KYC non-compliance
The main reason banks refuse investment companies in Czechia is failure to meet KYC (Know Your Customer) and AML (Anti‑Money Laundering) expectations. EU Directive 2018/1673 requires banks not simply to collect a basic package of documents, but effectively to build an evidentiary base showing that:
- the beneficial owners (UBO) are known,
- the source of funds is clear (legality of the source of capital),
- the source of wealth is clear (how the capital was accumulated over the course of activity),
- there are no links to sectors and jurisdictions that increase the risk of money laundering.
At COREDO I constantly see a typical AML refusal scenario in Czechia for investment companies:
- owners with a business history across multiple countries;
- a structure through holdings in different jurisdictions;
- turnover in the tens of millions, but some transactions are through partners or platforms for which there is no detailed documentation.
For a bank this is enough to classify the profile as high‑risk. KYC non‑compliance by investment companies in Czechia often appears in small details:
- a gap between declared forecasts and historical turnover;
- incomplete evidence of the source of capital (no contracts, closing docs, auditors’ reports on M&A deals or exits);
- outdated corporate documents and inconsistencies between legal and financial data.
EU sanctions and Czech banks: investment accounts
A separate block of risks: EU sanctions and their projections into local bank policies. The 14th EU sanctions package increased pressure on both the energy and financial sectors and on transactions with a number of countries that fall within the scope of secondary sanctions and OFAC monitoring.
For Czech banks this means:
- stricter screening of counterparties and beneficiaries;
- expanded control over operations related to certain sectors (energy, finance, trade);
- additional questions for clients who have links to the sanctions perimeter, even if the operations do not directly breach the rules.
– refusal of an account in Czechia due to EU sanctions at the application review stage if the bank sees potential links to high‑risk jurisdictions;
– much more frequent decisions to freeze assets (asset freeze) and freeze accounts of non‑residents if transaction signals suggest possible circumvention of restrictions;
– restructuring of correspondent relationships with the US, when banks minimize any OFAC risks and automatically consider transactions with a number of countries suspicious even when the operations are lawful.
At COREDO we model in advance for the client how the 14th EU sanctions package will affect investment flows through Czechia: which jurisdictions should not be used, which sectors require special explanation, and where it is better to separate the operational and investment circuits across different banks and countries.
Blocking of suspicious transactions
Even after successful account opening the risk does not disappear. For many investment companies the real problem starts later: through suspicious transactions in Czech banks that trigger internal monitoring systems.
Typical suspicious patterns include:
- a sharp increase in turnover without an explainable business logic;
- complex chains of transfers through multiple countries or banks;
- regular large transactions with counterparties from high‑risk jurisdictions;
- transactions inconsistent with the declared investment strategy.
Banks pay special attention to high‑risk investment sectors:
- cryptocurrency funds and crypto investment platforms;
- gambling and the betting segment;
- models close to high‑risk trading with an unclear economic substance.
It is not surprising that refusal to service crypto investment companies in Czechia has become commonplace: internal risk models in banks often classify crypto as high‑risk by default. In several cases the COREDO team worked on, crypto led to refusals by Czech banks already at the stage of analyzing the company’s website and marketing materials.
Account opening refusals in the Czech Republic for investment firms
Over the years I have developed a fairly clear matrix of typical reasons why investment companies are refused by Czech banks. I will summarize it using examples of popular banks:
| Bank | Main reasons for refusal | Typical triggers for investments |
|---|---|---|
| Creditas | Lack of a stable connection to the Czech Republic, sanction risks | Non‑EU residents without local presence, complex UBO structure |
| UniCredit | Strict approach to non‑EU residents, increased AML requirements | Transactions with high‑risk countries, complex settlement schemes |
| ČSOB | KYC non‑compliance, insufficient UBO transparency | High‑risk sectors, inaccuracies in source of funds |
| FioBanka | Regulatory violations and mismatch with the bank’s profile | Low real turnover despite declared large volumes, unclear business‑model |
– the bank’s non‑resident policy: some investment firms do not fit the target profile, especially if the beneficiaries – non‑EU residents;
– doubts about the adequacy or origin of capital relative to the declared level of the owners’ income;
– lack of transparency in the business model and a clear explanation of how the company makes money and why specifically through the Czech Republic.
In one case the COREDO team supported a company that was refused three times due to “insufficient connection with the Czech Republic”. We rebuilt the structure: added a local director, signed a genuine office lease, and established operational links with Czech partners. Six months later, on re‑application to another bank the account was opened, and the questions during the bank interview were mainly about the business plan and internal KYC/AML policies, not the owners’ jurisdiction.
Account freezes in the Czech Republic for businesses
Когда речь идёт не о первичном отказе в открытии счёта в Чехии, а о внезапной блокировке счетов в Чехии или решении банка о закрытии счетов в Чехии, последствия для инвесткомпании выходят далеко за пределы банка:
- останавливаются выплаты инвесторам и партнёрам;
- срываются сделки, что напрямую бьёт по ROI и доверительным отношениям с LP;
- повышается риск арбитражных споров с банками и претензий со стороны регуляторов других стран, если затронуты клиенты.
– упущенного дохода по сделкам;
– снижения оценочной стоимости бизнеса;
– ухудшения репутации на рынке капитала.
В COREDO при анализе риска блокировки счетов инвестиционных фирм мы используем собственный набор индикаторов: доля операций с high‑risk юрисдикциями, связь с санкционными секторами, сложность структуры UBO, история комплаенса в других банках. Это позволяет оценить ROI‑риски ещё до выбора банка и при необходимости выстроить мультибанковскую стратегию, распределяя потоки по разным юрисдикциям.
Crypto and sanction triggers in investments
Криптоинвестиции: отдельная тема. Для части чешских банков любые связи с крипторынком автоматически относят клиента к высокорисковым отраслям, даже если компания действует строго в рамках регуляций, а модели прозрачны.
Типичные сценарии:
- Банк видит в материалах клиента слова crypto, token, DeFi, и отказывает криптоинвестиционной компании в Чехии, не вдаваясь в подробности.
- Уже работающему фонду банк меняет внутреннюю риск‑политику и через какое‑то время уведомляет о закрытии счетов в Чехии по причине несоответствия обновлённым критериям.
- При появлении новых санкций в отношении отдельных проектов или стран банк усиливает скрининг и расширяет перечень «запрещённых» для себя моделей.
– отдельные направления финансового сектора с ограничениями;
– инвестиции, близкие к «чувствительным» областям (оборона, dual‑use технологии, сложные схемы в энергетике);
– модели с возможным риском разведывательной деятельности, когда взаимодействие с определёнными партнёрами выглядит нетипично для заявленного профиля.
Задача, которую часто решает команда COREDO, адаптация структуры компании: разделить криптоактивность и классические инвестиции по разным юрлицам, банкам и юрисдикциям, чтобы снизить общую нагрузку на комплаенс и не подвергать весь бизнес риску отказа.
How to avoid being declined by banks in the Czech Republic
In practice, the probability of banks refusing investment companies in the Czech Republic can be significantly reduced if account opening is treated as a separate compliance project rather than a technical task.
Key steps I recommend:
Maximum UBO transparency
- Simplify the structure where possible.
- Ensure consistency of beneficiary data across all documents, including foreign registers.
- Prepare a clear explanation of why the structure looks the way it does.
Detailed package for source of funds and source of wealth
- Gather contracts, reports, documents on exit deals, dividends, and asset sales.
- Structure them into a logical chain: from the origin of capital to investments through the Czech company.
- At COREDO we often prepare this as a short “compliance memo” for the bank.
KYC‑ready package for the business model
- A clear business plan with realistic turnover figures.
- Description of target counterparties, countries, and typical transactions.
- Public materials (website, presentations) that do not contradict the stated profile and do not increase the perception of high‑risk.
Preliminary compliance analysis for a specific bank
- Match the bank’s policy on non-residents with your company’s profile.
- Assess how the bank views your countries, industries, and transaction volumes.
- In COREDO’s practice, it’s often more advantageous to choose another bank in the Czech Republic or the EU from the start than to try to “get through” where the risk of refusal is high.
Preparation for the interview with the bank
- Beneficiaries and the director must be able to clearly and consistently explain the model, the origin of funds, and the reasons for choosing the Czech Republic.
- In some cases, the COREDO team conducts interview rehearsals, working through awkward questions before the meeting with the bank.
Strategies for unblocking accounts
If a refusal or blocking has already occurred, there is still room to manoeuvre, but action must be structured.
Practical strategies we apply:
- Request a reasoned refusal and a detailed analysis of the wording from a regulatory perspective: sometimes the bank indicates remediable reasons (incomplete package, unclear source of funds).
- Preparation of an expanded compliance file: additional documents, explanatory letters, updated AML policies/KYC, and internal monitoring procedures.
- An appeal to the bank with a legally sound justification of why the client meets internal and regulatory criteria, including references to local and European standards.
- In the event of a prolonged freeze of assets: assess the feasibility of arbitration proceedings against the bank, taking into account the amount, reputational risks, and prospects.
Alternatives to Czech banks for EU companies
Sometimes the most rational solution is not to force the entire business into the confines of a single Czech bank, but to build a diversified banking strategy relying on other jurisdictions.
In practice, the COREDO team often considers the following options:
| Alternative | Benefits for investments | Key compliance risks |
|---|---|---|
| Banks in Cyprus / UAE | Relative flexibility on KYC for clients from Asia/CIS, developed infrastructure for investments | Sanctions risk for the EU, the need for a well‑thought‑out structure of flows |
| Banks in other EU countries (for example, Lithuania) | Transparent European status, predictable regulation, convenience for managing an investment portfolio | Enhanced AML control, dependence on correspondent accounts in the US |
| Several banks in more permissive Asian jurisdictions | Greater tolerance for complex structures, flexible solutions for non‑residents | Possible reduction of “prestige” in the eyes of Western counterparties, attention from EU regulators |
Often re‑registering an investment company or creating a holding level in a friendly EU jurisdiction allows you to:
- reduce the likelihood of refusals by Czech banks;
- separate sanction‑sensitive and conservative flows;
- ensure better scalability of the investment portfolio without tying the entire business to a single banking center.
COREDO regularly designs such structures for clients, combining companies in the Czech Republic, Cyprus, Singapore, the UAE and other jurisdictions to strike a balance between market access, tax efficiency and compliance resilience.
Recommendations for investors
I’ll compile everything above into a practical list of actions that I use as the basis for strategic sessions with clients:
1. Conduct a KYC/AML audit before engaging with the bank
Assess the transparency of the UBO, source of funds, and flow structure. If necessary: revise the documents, policies, and model. The cost of such an audit is far lower than the price of account blocking or refusal.
2. Design a banking infrastructure, not just “open an account”
Choose banks taking into account beneficiary jurisdictions, industry, sanctions risks, and expected turnover. In some cases it’s sensible to plan for 2–3 banks in different countries from the start.
3. Minimize sanction and secondary risks
Continuously monitor EU sanctions packages, including the 14th, and the impact of restrictions on partners and industries. Reassess deal structures when rules change so as not to force the bank to stop operations.
4. Prepare a clear narrative for the bank
Including a company presentation, a description of the business model, an explanation of connections with the Czech Republic, counterparty selection criteria, and internal compliance procedures. This is critical, especially for Creditas and ČSOB.
5. Use the experience of specialized consultants
company registration in the EU, obtaining financial licenses, building an AML framework, and supporting banking relationships: this is a separate layer of work. At COREDO we regularly get involved already at the structure design stage so that we don’t have to “remedy” the consequences of refusals, but instead build from the outset a system that is resilient to KYC/AML checks.
Conclusion: checklist before applying to a Czech bank
Before submitting an application to a Czech bank, I would recommend asking yourself five questions:
1. Is the UBO structure and the sources of capital transparent and logical for compliance?
2. Is the business model clear to someone reading about it for the first time, and does it not appear high‑risk without explanations?
3. Do you have a sustainable and documentable connection to the Czech Republic (sustained link to Czechia)?
4. Have sanctions and jurisdictional risks been taken into account, and do your flows avoid intersecting with sensitive areas unless strictly necessary?
5. Do you have a complete, consistent KYC package prepared that will withstand not only the initial review but also subsequent regulatory inspections by the EU and the CNB?