Screening of the Foreign Investment and Consultation

Foreign investments requiring approval

If a foreign investor plans to conduct foreign investment to the target person or target object stated in Section 7 of the Foreign Investments Screening Act, he or she must not conduct this investment without prior approval by the Ministry of Industry and Trade.

This includes the following target persons/target objects:

1. a target person, who performs manufacturing, research, development, innovation, or organization of the lifecycle of military material according to legal regulation concerning foreign trade in military material, or into a target object through which the said activity is performed according to the Act no. 130/2002 Coll. on support for research and development from public funds and amending certain related acts (Research and Development Support Act) as amended; Act no. 38/1994 Coll. on foreign trade in military equipment as amended, and Decree no. 210/2012 Coll. on implementation of certain provisions of the Act no. 38/1994 Coll. on foreign trade with military material as amended.
2. a target person, who operates a critical infrastructure element determined by the relevant central administrative authority according to Act no. 240/2000 Coll. on crisis management and on amendments of certain acts (Crisis Act) as amended.
3. a target person, who is an administrator of an information system belonging to the critical information infrastructure, administrator of a communication system belonging to the critical information infrastructure, administrator of an information system belonging to an essential service, or operator of an essential service as defined in Section 3 of Act no. 181/2014 Coll. on cybersecurity and changing the related acts (The Act on Cyber Security) as amended.
4. a target person, who develops or manufactures the goods listed in Annex IV to Council Regulation (EC) 428/2009 setting up a Community Regime for the Control of Exports, Transfer, Brokering and Transit of Dual-use Goods as amended, or target object through which such goods are developed or manufactured.

Model form of the application for the approval of the investment is given by the Government Decree no. 178/2021 Coll.

Screening periods:

• screening of investment, that was not found to pose a risk: 90 days
• screening of investment, that has been identified as risk-prone, including the discussion by the government of the Czech Republic: 135 days

These dates can be prolonged by 30 days in complicated cases. In cases specified by the law (e.g., negotiations about the conditions) the proceeding can be paused.

Proceedings on Foreign Investment Screening Ex Officio

The foreign investments, that do not require permission or conditional permission, and that may cause endangering of the security or internal or public order of the Czech Republic can be screened by the Ministry of Industry and Trade  retrospectively up to five years since the investment. The law does not include a closed list of economic activities of target persons or the character of target objects. When deciding whether the foreign investment endangers the security of the Czech Republic or its internal or public order, it is looked at its potential impact on among other things:

1. infrastructure, including energy, transportation, water management, and medical infrastructure, data processing and storing infrastructure, aviation and cosmic infrastructure, defense, and other infrastructure important for the security of the Czech Republic and its internal or public order, as well as access to land and property essential for the usage of such infrastructure,
2. access to critical technologies and dual-use goods listed in Article 2 Point 1 of Council Regulation (EC) 428/2009, which are not listed in Annex IV, including AI, robotics, semiconductor, and cybersecurity technologies, aviation and rocket technologies, defense technologies, chemical technologies, energy-storing technologies, quantum, and nuclear technologies, as well as nanotechnologies and biotechnologies,
3. access to supplies, which are related to energy, raw material, or food security,
4. security of access to information that is important for the security of the Czech Republic or its internal or public order, including personal data, or ability to control this information,
5. possibility of significant influence over public opinion through information spread by the media,
6. critical information infrastructure, important information systems, and basic services,
7. non-military objects important for state security,
8. other technologies, malicious use of which poses a potential threat to the Czech Republic or its internal or public order, or any other factors important from the perspective of security of the Czech Republic or its internal or public order

Consultations

In the case that the foreign investor has an intention to carry out a foreign investment that does not need approval, he or she may ask the Ministry of Industry and Trade for a consultation, whether this investment might be considered as endangering of security, or the internal or public order of the Czech Republic. In the case that the result of this consultation is negative, the Ministry of Industry and Trade will not screen this investment ex officio.

Consultation is voluntary except for foreign investment directed into target person, who owns a nationwide radio or TV broadcast license, or who is a publisher of periodical, that has an overall minimum average circulation of 100 000 prints per day in the past calendar year.

Consultation period: 45 days

The model consultation proposal is given by the Government Decree no. 178/2021 Coll.