Category: Czech Republic

Clifford Chance has promoted Michal Jasek and Milan Rakosnik to Partner.

Focusing on corporate and M&A, Jasek has been with Clifford Chance Prague since 2005 when he joined as a Lawyer. Earlier, he was a Junior Lawyer with Giese & Partner between 2003 and 2005 and, before that, a Paralegal with Linklaters between 2001 and 2002.

Focusing on real estate, Rakosnik joined Clifford Chance Prague in 2011 as a Lawyer. He was promoted to Senior Lawyer in 2017 and to Counsel in 2020. Earlier, he worked at Baker McKenzie as an Intern between 2010 and 2011.

BBH has advised PPF Real Estate on its acquisition of Quinn Hotels Praha which owns Hilton Prague. CMS advised Quinn Hotels Praha.

Hilton Prague is the largest hotel in the Czech Republic.

The BBH team included Partners Petr Precechtel and Andrea Adamcova, Senior Associates Jan Krejci and Adam Necas, Junior Associates Adam Krejci and Mikulas Zacpal, and Trainee Marek Pieklo.

The CMS team included Partners Helen Rodwell and Lukas Hejduk, Consultant David Cranfield, Counsel Lukas Valusek, Senior Associate Pavel Kocian, and Associates Stepan Havranek and Lukas Reichmann.

The Czech Republic has recently implemented new regulations for crypto-asset service providers, marking a significant step in aligning its legal framework with European Union standards. The Act on Digitalisation of the Financial Market (ZDFT), effective as of 15 February 2025, introduces comprehensive rules for the rapidly evolving digital finance sector. This article delves into the main features of the new law, its practical implications, and the specifics of the Czech regulation in the area of digital finance and crypto-assets.

Key regulatory changes

The ZDFT responds to the challenges associated with the application of key European regulations, namely:

• Digital Operational Resilience Act (DORA): Regulation (EU) 2022/2554 focuses on enhancing the digital operational resilience of the financial sector.
• Markets in Crypto-Assets Regulation (MiCA): Regulation (EU) 2023/1114 establishes a harmonised legal framework for crypto-asset providers across the EU.

These regulations aim to foster stability and security in digital financial transactions, and the ZDFT serves as the foundation for their application within the Czech Republic.

MiCA and the scope of regulation

MiCA introduces strict requirements for crypto-asset service providers operating within the EU. It categorises crypto-assets into three main types:

1. Asset-Referenced Tokens (ARTs): Crypto-assets pegged to a basket of assets to maintain stability.
2. E-Money Tokens (EMTs): Tokens serving as digital alternatives to traditional fiat currencies.
3. Other Crypto-Assets: A broad category that includes most non-fungible tokens (NFTs) and utility tokens.

Under MiCA, service providers dealing with these assets must comply with stringent transparency and disclosure obligations. This includes preparing detailed business plans outlining technical features, risks and investor rights.

The role of the Czech National Bank

The Czech National Bank (CNB) assumes a central role as the primary regulatory authority under both DORA and MiCA. The CNB is responsible for overseeing compliance with the new rules and supervising crypto-asset service providers and other digital finance entities.

The key powers and responsibilities of the CNB include:

• Supervision and oversight: Monitoring compliance with DORA and MiCA regulations.
• Incident reporting: Receiving reports of incidents under DORA, as the Czech Republic has opted not to establish separate Computer Security Incident Response (CSIRT) teams.
• Interim measures: Imposing specific interim measures to prevent market abuse, including the ability to order the freezing of assets or funds in sanction proceedings.
• Enforcement fines: Levying enforcement fines for non-compliance with corrective measures, up to approximately EUR 200,000 (CZK 5 million) per fine, with an aggregate limit of approximately EUR 800,000 (CZK 20 million).
• Maintenance of registers: Maintaining informative registers of white papers, stablecoin issuers and crypto-asset service providers.
• Sanctions for offences: Imposing sanctions for violations of DORA, MiCA and the ZDFT.

Licensing and fees

As of 15 February 2025, entities providing crypto-related services in the Czech Republic are subject to specific licensing requirements, while the CNB oversees the licensing process. The following fees are imposed for applications (no additional fees are required as of now):

• Crypto-asset service providers (CASPs): CZK 20,000 (approx. EUR 800)
• Issuers of asset-linked tokens (ARTs and EMTs): CZK 50,000 (approx. EUR 2,000)
• Application for a licence to provide virtual asset services (VASP): CZK 10,000 (approx. EUR 400)

Licensing requirements for crypto-asset service providers

Entities seeking authorisation as Crypto-Asset Service Providers (CASPs) must submit a detailed application to the CNB, including:

• A business plan detailing the types of crypto-asset services to be offered, target markets and marketing strategies.
• Proof of compliance with prudential safeguards under MiCA Article 67.
• Governance structure documentation, demonstrating sound internal controls.
• Financial stability evidence, proving that management has the required knowledge, expertise and integrity.
• Risk management frameworks, ensuring compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) regulations.
• ICT security documentation, outlining cybersecurity protocols as required by the Digital Operational Resilience Act (DORA).

These stringent requirements aim to ensure that only well-prepared and financially stable entities enter the market, protecting both investors and the broader financial system.

Penalties for non-compliance

The ZDFT prescribes a range of penalties for offences related to DORA and MiCA violations. While the Czech Republic has not opted for criminal sanctions, the financial penalties can be significant.

• DORA violations: Maximum fine of approximately EUR 2 million (CZK 50 million) for breaches related to risk management, business continuity, notification obligations and digital resilience testing.
• MiCA violations:
• Natural persons: Maximum penalty of approximately EUR 4,700,000 (CZK 118,475,000) or three times the amount of the undue benefit.
• Legal persons: Maximum penalty of approximately EUR 14,100,000 (CZK 355,425,000), 15% of total annual turnover, or three times the amount of the undue benefit.

Specifics of crypto-asset services

The ZDFT specifies the application of MiCA requirements within the Czech legal framework, linking it to existing laws such as the Payment Transactions Act and the Insolvency Act. Service providers must periodically inform the CNB of relevant information, including submitting officially audited financial statements.

The Act also addresses the competence of service providers, requiring them to possess knowledge of crypto-asset regulations, the ability to explain the nature of crypto-assets and the capacity to provide appropriate recommendations.

Conclusion

The implementation of the Act on Digitalisation of the Financial Market in the Czech Republic represents a decisive move towards regulated digital finance. As of 15 February 2025, entities providing crypto-related services must now navigate the licensing requirements, including the new CASP licence, and ensure compliance with stricter operational and cybersecurity standards. While the Czech Republic has opted for financial penalties rather than criminal sanctions, the potential fines for non-compliance, reaching millions of euros, underscore the importance of adhering to the new regulations. Service providers must prioritise preparing comprehensive documentation, strengthening internal controls, and ensuring their staff possess the necessary expertise to navigate this evolving regulatory landscape. The Czech Republic’s approach, while adhering to EU standards, also emphasises a practical perspective, ensuring that even smaller entities can comply with the new requirements.

By Lukas Tomanek, Senior Associate, JSK, PONTES

Clifford Chance has advised Sumitomo Mitsui Banking Corporation as the sole coordinator, sole bookrunner, and mandated lead arranger on a JPY 80 billion samurai loan for Energeticky a Prumyslovy Holding.

Sumitomo Mitsui Banking Corporation is a Japanese multinational banking financial services institution owned by the Sumitomo Mitsui Financial Group.

Energeticky a Prumyslovy Holding is a Czech Republic-based energy company.

According to Clifford Chance, this landmark deal is the largest debut samurai loan for a global corporate borrower since the financial crisis and cements SMBC Group’s leading role in the samurai loan market. Samurai loans enable non-Japanese companies to access Japanese institutional investors.

The Clifford Chance team included Managing Partner Milos Felgr, Counsel Dominik Vojta, Senior Associate Hana Cekalova, and Associate Tomas Kubala.

With the end of the 2024 calendar year accounting period, companies must focus on key obligations associated with it. This overview, prepared by the law firm Eversheds Sutherland, summarizes the most important deadlines and obligations related to financial statements, the annual report, the related parties report, and the filing of the corporate income tax return. Proper and timely fulfillment of these obligations is essential to comply with legal requirements.

A summary of the most important deadlines for 2025:

Financial statements:

• Review within six months from the balance sheet date (usually by 30 June 2025)
• Filing (together with the annual report) in the collection of documents within 30 days of their approval (usually by 30 July 2025), but no later than 12 months after the balance sheet date (usually by 31 December 2025) 

Related parties report 

• Preparation by 31 March 2025 
• Filing in the collection of documents within 30 days of its approval, but no later than 12 months after the balance sheet date (usually by 31 December 2025) 

Corporate income tax return 

• Filing by 2 May 2025 with a possible extension until 1 July 2025

1. Financial statements

Preparation of financial statements

The preparation of the company’s financial statements must be arranged by its statutory body. The financial statements are prepared as on the balance sheet date when the company accounting books of the company are closed. The balance sheet date for most companies is 31 December 2024.

Review and approval of the financial statements

The General Meeting or the sole shareholder reviews the regular financial statements within six months from the last day of the previous accounting period. If the company’s accounting period is a calendar year, the last possible date for the review and approval of the financial statements for 2024 is 30 June 2025.

If the company has its financial statements audited by an auditor, we recommend that the decision to approve the financial statements should include the appointment of an auditor for the next financial year. The auditor may be appointed for more than one year.

Publication of the financial statements on the company’s website

Joint stock companies and European Companies (SEs) are required to publish their financial statements on their websites for at least 30 days before the date of the General Meeting and for 30 days after the approval or disapproval of the financial statements.

Together with the financial statements, the annual report, or report on business activities and the state of its assets, and the related parties report with the opinion of the supervisory body, are also published.

Filing of financial statements in the collection of documents of the commercial register

The financial statements must be filed in the collection of documents within 30 days of their approval by the General Meeting or the sole shareholder and verification of an auditor (if required), but no later than 12 months after the balance sheet date. This twelve-month period applies regardless of whether financial statements have been audited or approved.

If the company’s accounting period is a calendar year, the last possible date for the filing of the financial statements for 2024 in the collection of documents is 31 December 2025.

2. Related parties report and annual report

Preparation of the related parties report

If the company is controlled person (i.e. it is controlled by another person or entity, typically by its majority shareholder, or it is part of a group of companies or a concern), the statutory body also prepares a report on relations between related parties within three months of the end of the financial year. The related parties report is usually part of the annual report.

If the company has a supervisory body (e.g. a supervisory board), this body reviews the related parties report and then informs the General Meeting about the findings. If the controlling person/entity is the sole shareholder, no review is required.

The related parties report must be filed in the collection of documents of the commercial register within 30 days of its approval by the General Meeting or the sole shareholder and verification by the auditor (if required), but no later than 12 months after the balance sheet date. The twelve-month period applies regardless of whether it has been verified by the auditor or approved. If the company’s accounting period is a calendar year, the last possible date for filing the 2024 related parties report in the collection of documents is 31 December 2025.

Preparation of the annual report

Companies that are required to have their financial statements audited are also required to prepare an annual report. Its purpose is to provide a comprehensive, balanced and integrated view of their performance, activities and current economic position of the company. In the case of joint stock companies that are not required to have their financial statements audited, a report on business activities and the state of its assets is required.

Financial statements, including the annual report, or report on business activities and the state of its assets, after they have been verified by an auditor and approved by the competent body, the company publishes within 30 days of both of these conditions being met, but no later than 12 months after the balance sheet date of the financial statements. This twelve-month period applies regardless of whether these documents have been approved. If the company’s accounting period is a calendar year, than the last possible date for filing the annual report for 2024 in the collection of documents is 31 December 2025.

3. Taxes

Corporate income tax

The corporate income tax return in “paper form” must be filed within three months from the end of the tax period, which means by 1 April 2025. 

However, the deadline for filing the returns is extended in the following situations:

• to four months after the end of the tax period (until 2 May 2025), if the return has not been filed within the three-month period and is subsequently filed electronically
• to six months after the end of the tax period (until 1 July 2025), if the financial statements must be audited or if the tax return is not filed within the three-month period and is subsequently filed by a tax advisor.

If the entity has a data box that is established by law or has a statutory obligation to have its financial statements verified by an auditor, it is obliged to file its corporate income tax return electronically or via a tax adviser, i.e. by 2 May 2025 or 1 July 2025.

By Michal Ruzicka, Principal Associate, and Simon Holicky, Trainee, Eversheds Sutherland

Reals has advised Investika Real Estate Fund on the acquisition of the Anglicke Nabrezi – U Zvonu development project in Pilsen from private sellers. Krivanek Tomasek and Andrs and Haloun reportedly advised the sellers.

With over CZK 20 billion in assets under management, Investika Real Estate Fund is the largest non-bank real estate fund in the Czech Republic and Slovakia, targeting a stable annual return of 4–6%.

According to Reals, the modern complex comprises over 200 residential units and approximately 2,800 square meters of commercial space for offices and retail.

The Reals team included Partners Pavlina Tejralova and Miroslav Dudek and Attorneys at Law David Hartman and Patrik Novotny.

Editor’s Note: After this article was published, Andrs and Haloun confirmed its involvement to CEE Legal Matters. The firm’s team included Partner Pavel Haloun and Senior Associates Jakub Machovic and Vaclav Adamec.

When discussing competition law, the Competition Authority and its powers are usually part of the business conversation, given that it is the key enforcer ensuring fair competition and penalizing those who try to distort it. However, for many undertakings, a decision by the Competition Authority isn’t always the end of their fight for justice – sometimes it’s just the beginning. Affected competitors often have to undertake significant efforts to seek compensation from those whose anti-competitive behaviour has harmed or even destroyed their business. In this article, we share our experience with the first-ever successful follow-on damages action in the Czech Republic and the challenges we encountered along the way.

Our story began in 2004 when Student Agency launched its bus service between the two largest Czech cities, Prague and Brno. However, its distinctive yellow buses didn’t remain the sole option on this route for long. In 2007 Asiana – a Czech company previously focused mainly on selling airline tickets – entered the market with its own buses on the same route. To Asiana’s surprise, Student Agency responded immediately by aggressively expanding its transport capacity on the Prague-Brno route. Moreover, it provided services at prices lower than the average monthly total cost, slashed fares on buses departing at the same time as Asiana’s, prevented access to the bus boarding point in Brno, and even thwarted a ticket sales agreement with a local newsstand operator in Brno. After nearly a year of fierce struggle, Asiana was ultimately forced out of the market.

Following the anti-competitive behaviour of Student Agency as the dominant player in the market, we assisted Asiana in preparing a complaint to the Czech Competition Authority regarding possible abusive exclusionary practices. The Competition Authority began to look into the matter and to gather evidence it conducted a dawn raid at Student Agency’s headquarters, during which it seized the following emails: “Today the ‘stewardess’ went on her first ride. The fight begins, which must end within 2 months with Asiana’s withdrawal from the Brno – Prague route.” and “we decided to take an uncompromising approach. ‘Stewardess’ out of the game. If we don’t give it a chance, it will be pushed off the line within 2 months……”[1] In these emails, the references to ‘stewardess’ refer to Asiana’s other business activities of selling flight tickets through its website and trade name “Letuška“, which translates as ‘Stewardess’. Based on these emails, the Competition Authority concluded that Student Agency deliberately sought to exclude Asiana from the market. Therefore, to establish abuse of dominance the Competition Authority only needed to prove that Student Agency set its prices below the average total costs, rather than the average variable costs.

The Competition Authority then concluded that Student Agency was a dominant undertaking on the relevant market, which deliberately priced its tickets below the average total costs and expanded transport capacity in order to exclude Asiana from the market, as a result of which consumers were restricted in their choice of carrier and suffered harm in the subsequent increase in transport prices. Given the above, the Competition Authority imposed a fine of CZK 5,154,000 on Student Agency.

However, Asiana was still far from receiving proper compensation at this point. Student Agency challenged the Competition Authority’s decision in Czech administrative courts, seeking to have it overturned. Understandably, Asiana was eager to prevent this, as the decision formed the foundation for its claims in a subsequent follow-on action. Therefore, Asiana attempted to intervene in the proceedings brought by Student Agency. To be able to intervene in proceedings before the administrative courts in the Czech Republic, one must, simply put, be directly affected in one’s rights and obligations by the issuance or revocation of the contested decision of the administrative authority (e.g., the Competition Authority). Thus, we argued that the abuse of dominant position was to Asiana’s direct detriment (exclusion from the market) and that if the Competition Authority’s decision were overturned, Asiana’s private and public rights would be affected. The issue of Asiana’s participation in the administrative proceedings came before the Czech Supreme Administrative Court, which – surprisingly enough – concluded that the purpose of the Czech Competition Act[2] is to protect competition as an economic phenomenon, not to protect individual market participants, and that Asiana was thus only indirectly affected by the Competition Authority’s decision.[3]

Although Asiana was not able to intervene in the proceedings before the administrative courts, the courts upheld the Competition Authority’s decision and the path to compensation was finally open. We therefore filed a lawsuit on behalf of Asiana against Student Agency, asserting several claims. First, we claimed actual damages for the costs incurred in the operation (lost costs consisting of the preparation, entry and implementation of the operation of the Praha – Brno bus line). Second, we claimed lost profits for the duration of the operation. And third, we claimed lost profits for the year following Asiana’s exclusion from the market.

A major benefit of this follow-on action was that the court was bound by the fact that was proven in the administrative proceedings that Student Agency had breached the Competition Act to the detriment of Asiana. Therefore, it was sufficient for us to prove only the amount of damage incurred. Even though our procedural situation was significantly simplified by the existing decision of the Competition Authority, the court proceedings took an unreasonably long time and we did not see a final decision until January of last year (2024). Over the years, a total of seven decisions have been issued, which reflects how the courts have leaned one way or the other throughout the proceedings. However, the lengthy litigation had a happy ending for Asiana, as the courts concluded that it was entitled to compensation of over CZK 22,000,000, which could at least financially compensate for the injustice caused by Student Agency’s anti‑competitive behaviour.

Let us conclude with a few remarks for further reflection. The case described above (the first successful follow-on claimant’s damages action in the Czech Republic) shows that enforcement of damages claims arising from competition law infringements remains in its early stages in the Czech Republic and that the courts lack sufficient experience to be able to resolve these claims quickly and effectively. The situation is not helped by the fact that affected competitors cannot join the administrative court proceedings in which the Competition Authority’s decisions are reviewed, which not only complicates their access to relevant information and documents but mainly prevents them from exercising influence on the proceedings, the outcome of which has far-reaching consequences for them. In our view, the current dismal situation may discourage affected competitors from pursuing their claims, which we consider unfortunate. We hope that reaching justice in area of private competition enforcement in the Czech Republic will be significantly accelerated in the coming years, whether through the application of adopted competition damage laws or an increase in the experience of the courts with this type of civil action.

[1] The text of the emails was translated from Czech. Some phrases have been modified to maintain their true meaning.

[2] Act No. 143/2001 Sb., on the Protection of Competition (Act on the Protection of Competition), as amended.

[3] See the judgment of the Supreme Administrative Court, file No. 7 As 7/2014-39 of 14 May 2014.

By Pavel Dejl, Partner, and  Filip Rehak, Intern, Kocian Solc Balastik

Gleiss Lutz has advised EP Global Commerce on foreign investment control and merger control matters related to its public delisting offer for all shares in Metro AG not already held by EPGC.

EPGC is an acquisition entity controlled by Daniel Kretinsky. Established in April 2016, it is headquartered in Prague.

Metro AG, an international food wholesaler, operates in over 30 countries with a store network of 623 locations across 21 countries.

According to Gleiss Lutz, EPGC, which currently holds 49.99% of Metro AG’s ordinary shares and voting rights, has made a public delisting offer at EUR 5.33 per ordinary or preference share. The delisting is intended to support Metro’s long-term transformation strategy.

The Gleiss Lutz team members in Duesseldorf and Munich.

CMS has advised a club of Czech banks including Ceska Sporitelna, Ceskoslovenska Obchodni Banka, Komercni Banka, and Raiffeisenbank, on financing for Smarty Brands Group. 

Smarty is a Czech Republic-based retailer and distributor of consumer electronics and mobile phones.

According to CMS, the financing, designed to refinance existing debt and provide additional funds for operational needs and 2025 investments, consolidates the banks’ bilateral arrangements under one umbrella facilities agreement. Selected lenders continue to provide standalone financing supported by the European Investment Fund, with intercreditor provisions enabling coexistence with senior financing. 

The CMS team included Partner Petra Mysakova, Senior Associate Zuzana Nikodemova, Associate David Bujgl, Lawyer Matej Eberle, and Junior Lawyer Michal Vaclavik.

CMS was unable to provide additional information on the matter.

Clifford Chance has advised Amadeus Real Estate on the sale of a majority shareholding interest in Maj Narodni – the owner of the Maj Narodni shopping and entertainment center in Prague – to Fond Realita. BBH advised Fond Realita. White & Case reportedly advised the financing banks.

Amadeus Real Estate is a family-run developer with over 30 years of experience.

Fond Realita, established by Atris Investicni Spolecnost in 2009, currently manages 17 properties across the Czech 

The Clifford Chance team included Partner Emil Holub, Counsel Milan Rakosnik, Associate Simon Dusek, and Junior Lawyers Simon Pavlas and Petr Rysina. 

The BBH team included Partners Tomas Sedlacek, Tomas Politzer, and Zdenek Hustak, Senior Lawyer Dominik Liska, Associates Jiri Rydl, Magdalena Novakova, and Filip Chrapavy, and Junior Associate Mikulas Zacpal.