Commentary on the Czech FDI Act

Czech Act No. 34/2021 Coll., on Screening of Foreign Investments entered into force on 1 May 2021. The Act introduced into Czech law a completely new regime for the screening of investments coming from third countries in entities or property used for economic activity in the Czech Republic. It significantly affects transaction practice in cases where the buyer comes from countries outside the European Union.

The Czech-language publication by a group of authors led by Jan Kupčík was published in December 2022 and is the first and only thoroughly detailed commentary of the Act. The commentary builds on the authors' practical experience and academic background and seeks to answer practical and theoretical questions pertaining to every section and paragraph of the Act. As the decision-making practice remains non-public, besides an explanatory memorandum the commentary provides a unique guide to interpreting the Act.

The commentary naturally follows the structure of the Act. It starts by defining foreign investments from the point of view of the entities on the side of the investor and the object of the investment, as well as the decisive parameters of the transaction (definition of the effective degree of control). Subsequently, the foreign investments for which there is a mandatory notification or consultation obligation are identified and discussed. The authors also examine which investments are recommended for an optional consultation. In addition, the commentary includes a procedural part, describing various aspects of the individual phases of the entire process at the Ministry and details of EU cooperation. It concludes with a look at sanctions and transitional provisions.

The commentary is available for Czech Beck online users here.