Czech Republic: Amendment to Act on register of beneficial owners
Proposed amendment to change the beneficial owner definition
Proposed amendment to change the beneficial owner definition
Less than a year has passed since the new law on the registration of beneficial owners became effective, and the government is already proposing an amendment to change the beneficial owner definition.
The draft amendment has not yet been submitted to the deputies; the inter-ministerial comment procedure has just been completed. The amendment is proposed to take effect on the day following its promulgation.
This is not just a technical amendment, but a significant change in determining beneficial owners. The proposal drops the terms "person with ultimate influence" and "ultimate beneficiary" and now defines beneficial owner as "any natural person who ultimately owns or controls a legal person or legal arrangement".
According to the newly amended definition, the beneficial owner in a business corporation is any natural person who:
- Is the controlling person pursuant to the Corporations Act
- Owns or controls the corporation by:
- Holding a direct interest or shareholding or voting rights including bearer shares of more than 25%
- Having a direct or indirect right greater than 25% to a share of profits, other own funds, or a liquidation balance
- Controlling a corporation or corporations that individually or collectively hold an interest or bearer shares in the corporation greater than 25%
- Controlling the corporation by other means (control is defined by the criteria set out in the Directive of the European Parliament and of the Council)
The amendment also introduces minor changes to automatic entries into the register of beneficial owners and to the definition of persons who do not have a beneficial owner. Other changes are of a more formal or technical nature. The registration and sanction processes remain essentially unchanged.
Read a May 2022 report prepared by the KPMG member firm in the Czech Republic
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