Foreign investment screening in the Czech Republic
Certain investments made by foreign investors in the Czech Republic may be subject to screening. The controlling authority for foreign investments is the Czech Ministry of Industry and Trade. The Ministry's oversight can extend to investments that have already been completed, with the ability to initiate screenings within 5 years of the investment's completion if deemed a threat to national security. Investment made in violation of the law may result in severe penalties for the investor.
Are you wondering whether your investment in the Czech Republic may be subject to investment screening?
Read on to find out.
Conditions for Investment Screening
Screening applies to investments made directly or indirectly by a non-EU citizen or by an entity with its seat outside the EU (or entities directly or indirectly controlled by either one).
Another key determinant is the form of the investment. Screening may be triggered if the foreign investor obtains influence over a Czech target entity through:
- exercising of ≥ 10% of the voting rights or corresponding influence in the target entity;
- membership in a corporate body of the target entity;
- ownership of assets used for the target entity’s economic activity; or
- other form control enabling access to information, systems, or technologies important for the protection of the security of the Czech Republic.
Permit and Consultation
The Czech foreign investment regime differentiates between the obligation to obtain a permit prior to the investment completion and the obligation to consult the investment with the Ministry.
A permit is required for the investments into a target entity that:
- is engaged in the production, research, development, or innovation of military material;
- operates critical infrastructure; or
- is engaged in the development or production of dual-use goods.
Following the implementation of the EU NIS2 cybersecurity rules in the Czech Republic, investments into regulated service providers operating under a higher-obligation regime fall within the scope of foreign investment screening as of 1 November 2025.
Consultation is mandatory only for investments into the largest Czech media companies. In other cases, investors may voluntarily consult the Ministry to ensure compliance.
Sanctions
If an investor fails to comply with the conditions imposed by the Ministry or proceeds with an investment in violation of a prohibition, the Ministry may:
- prohibit or restrict the investor from exercising ownership or voting rights in the target entity; or
- order the sale of the target entity, its assets, or the investor’s participation in it.
In addition, the Ministry may impose fines up to 2% of the foreign investor’s total net turnover for the last completed accounting period or up to EUR 4,000,000.
Key Considerations
Foreign investors should keep the following points in mind:
- Timing: Applications for investment permits or request for consultation must be submitted before the investment is completed.
- Retroactive Review: The Ministry may initiate an ex officio screening within five years of the investment’s completion.
Conclusion
Given the potentially serious consequences of non-compliance, foreign investors should carefully assess whether a permit or consultation is required. In practice, voluntary consultation is often an effective way to increase legal certainty. If the Ministry confirms that an investment does not pose a security risk, the investment is protected against future review.
| Bořivoj Líbal
Managing Partner Eversheds Sutherland |
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