More profound changes in the Register of Beneficial Owners coming this autumn

At its meeting on 8 June 2022, the Government discussed an expedited amendment of Act No. 37/2021 Coll., on the Register of Beneficial Owners (the "RBE Act“). Drafting of the amendment was expedited due to complaints raised by the European Commission about the currently effective version of the RBE Act which the European Commission finds non-compliant with the EU Law (as it incorrectly transposes the so-called 5th AML Directive). The European Commission made the release of funds from the National Recovery Plan to the Czech Republic conditional upon urgently amending the RBE Act and, therefore, the Parliament is expected to pass the amendment already in the first reading. 

A key change introduced by the amendment is modification (extension) of the definition of a beneficial owner. Different from the current version of the RBE Act, a new basic criterion for being recognized as a beneficial owner will be the ownership of shares at a predetermined amount. The amendment also changes the rules for identifying the so-called material beneficial owner (as provided in Section 4 of the RBE Act) and narrows down the exceptions / range of entities that have no beneficial owner (as provided in Section 7 of the RBE Act). As a result, some of the persons who have not been regarded as beneficial owners under the current version of the RBE Act will have to get registered as beneficial owners pursuant to the new amendment. Likewise, some of the entities that have not been obliged to register a beneficial owner will become obliged to do so pursuant to the new amendment. In practice, it means that business corporations and other obliged entities will have to check again that their entries in the Register of Beneficial Owners comply with the effective legislation and, if necessary, make the entries again.

he amendment further introduces certain terminological changes and it changes the mechanism of automatic entries of data in the Register of Beneficial Owners. Pursuant to the transitional provisions of the amendment, there will be a "technological outage" of the Register of one month starting from the effective date of the amendment (i.e. probably in October 2022) and during that time, it will not be possible to make any entries in the Register (accordingly, the deadlines for entries will be extended by that time).

The amendment is expected to become effective on 1 October 2022. No later than within six months of that date, legal entities and other obliged entities will have to ensure that the information about their beneficial owner complies with the requirements laid down by the amendment.

We will keep on monitoring the legislative process. If you would like to get more details, please contact the authors of this article Milan Sivy and Illia Antonov.


Milan Sivy
Senior Attorney
Illia Antonov
Senior Attorney