The most notable recent political event in the Czech Republic was the October 2020 regional election, says Jaroslav Havel, Managing Partner at Havel & Partners. However, Havel is quick to point out that, no matter who has been in office in the last ten years, politicians have not had a major impact on business in the Czech Republic. A more tangible effect of the election, he says, is that his former partner, Jan Holasek, who left the former Havel & Holasek law firm six years ago, has become a member of the Czech Senate.
Still, there’s at least one important thing politicians can do - legislate. Havel explains that one of the most important policy changes in the country came in the form of the new Act on Bank Identity. According to him, Havel & Partners worked in cooperation with several other organizations and firms on drafting the piece of legislation designed to amend the Czech Banking Act and introduce reform in the area of personal identification.
Havel reports that the concept of bank identity will allow Czech banks to offer identification services to their clients, who in turn can use this service to authenticate their identity and provide e-signatures when obtaining services from both governmental bodies and private companies. According to Havel, the system contemplated by the act, which entered into effect at the beginning of January 2021, should become more widely implemented in the first half of the year.
“Another significant change,” Havel continues, “is the FDI Act.” According to him, the act, which is to enter into force in April 2021, will bring more stringent rules on investments of companies from outside of the EU. In particular, he says, “foreign investments aimed at obtaining control over Czech companies operating in critical industries such as military materials and energy, among others, will be subject to prior approval by the Czech Ministry of Industry and Trade.”
Moving on to the topic of economy, Havel says that “some industries, like tourism, retail, hotels, have been going through a depression since May or June.” According to him, in the retail and fashion industry some large companies, such as Blazek, Pietro Filipi, and Kara, fell into insolvency. Not all is grim, however, and he points to some larger transactions in the country – among them the merger between the KKCG Group’s IT companies and the Aricoma Group, and the sale of ARETE’s industrial parks portfolio to Cromwell European REIT (as reported by CEE Legal Matters on December 23, 2020). In addition, he says, “venture capital funds and start-ups are also on the upward trajectory.”