New UBOs (Ultimate Benefical Owners) Requirements in the Czech Republic

21 May 2021

The new Ultimate Beneficial Owner Register Act will replace the current legislation as of 1 June 2021. The law aims to achieve better transparency and therefore sets out new obligations and strict sanctions for failure to comply therewith.

 UBO Register

Every legal entity with at least one UBO must register such a person in the UBO Register.  A UBO is an individual entitled to more than 25 % share in the profits of the company or an individual controlling the company in terms of the Czech Business Corporations Act (typically having more than 40 % of voting shares). If no UBO can be identified this way, senior management will be considered UBOs of such company (usually members of the statutory body or other senior executives).


The new law set outs sanctions that are imposed on entities failing to register their UBO or other obligations set out therein. Failure to comply with the statutory obligations has the following consequences:

  • the company is automatically prohibited to pay out profits to an individual who is not registered as a UBO although they should be;
  • an individual who is not registered as a UBO of the company (although they should be) cannot exercise their voting rights;
  • rights and duties from contracts designed to disguise the real UBO (while the real UBO is not registered in the UBO register) cannot be legally enforced; and
  • an administrative fine of up to CZK 500,000 may be imposed.

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Deadline for compliance

Companies are obliged to comply with the requirements of the Act without unnecessary delay after 1 June 2021. Companies that already complied with the current legislation must fulfil their additional obligations under the Act until 1 December 2021.

Obligation to register UBO does not apply to your company if you have already registered your UBO under current legislation and such a registration complies with the requirements of the Act. However, even in such a case, it is necessary to check the entry in the new UBO Register to make sure that the company’s entry is compliant with the law.