The Czech parliament is adopting a new regulation with respect to the registration of ultimate beneficial owners (i.e. persons with ultimate decisive influence on or with ultimate economic benefit from the company) (“UBO”). Although the obligation of companies to register their UBOs has already existed for some time under the Czech regulatory regime, it has shown to be insufficient in practice as the absence of any penalties or sanctions has led to the vast majority of business corporations still neglecting this obligation to register their UBOs.
The new regulation will maintain the obligation to evidence the UBO in the register, but it will also impose a variety of sanctions on companies not compliant with the new UBO regime. We expect such changes to be adopted in the next few months.