The significance of the location of trust fund accounts and assets is specified in the International Private Law Act. Specifically, the trust fund is primarily governed by the law of the Czech Republic.
However, if the governing law is not specified, the trust fund is governed by the law that is most closely connected thereto, taking into account:
- the place from which the fund is managed,
- the place in which the assets making up the fund are predominantly located,
- the location of the trustee’s registered office or usual place of residence,
- the purposes for the establishment of the fund and place where these purposes are to be achieved.
Fund accounts and assets may be located anywhere, and their location is only significant if the statute does not specify the governing law. We thus strongly recommend that the statute also specifies the governing law of the trust fund, specifically to stipulate that it shall be governed by the law of the Czech Republic – especially if fund assets or its administration are located abroad.
If the trust fund is established in compliance with Czech law, then it will also be a tax resident in the Czech Republic.